SMPC cries foul over Semirara bid rules, warns of July coal shutdown

Insider Spotlight

• SMPC is weighing legal options over bid rules it says effectively prevent the incumbent from competing for Semirara.
• The highest financial bid could decide the winner, while SMPC says rival bidders do not need previous mining experience.
• SMPC warns coal output could fall to zero by July next year if a new operator is unable to take over the complex mine on time.

Consunji-led Semirara Mining and Power Corp. (SMPC) warned that new bidding rules for the country’s biggest coal mine could bring production to a halt by July 2027, potentially cutting government revenues and putting pressure on electricity prices.

SMPC said the auction favors the highest financial bid without requiring mining experience, while imposing conditions on the incumbent that it claims effectively prevent it from competing.

The Department of Energy is bidding out the right to operate the Semirara coal mine after SMPC’s existing contract expires next year, opening the possibility of a new operator taking over the massive operation.

Isidro Consunji 

​SMPC ​chair and CEO 

SMPC weighs legal options

SMPC said it is studying all options to protect its legal interests, taking particular issue with a requirement for the company to list and surrender its mining assets to the government if it joins the bidding.

“We are the only company covered by this rule. This is unfair and basically bars us from bidding. To require us to surrender ownership of our assets as a condition to bid is against Presidential Decree 972, a special law on coal mining, which clearly says that such assets are ours and we can remove them within one year from the expiration of our operating contract,” SMPC said.

Rival bidders, meanwhile, are not required to have mining experience, with the highest financial offer determining the winner and the proposed mining plan treated as a pass-or-fail requirement, according to the company.

July deadline

SMPC argued that the rules underestimate the difficulty of handing over an operation where a new operator would need hundreds of pieces of heavy equipment, thousands of trained workers and billions of pesos in operating funds by July.

“Semirara is no ordinary mine. We are mining in the sea, deeper than the height of the highest building in Makati. We have to pump out the equivalent of 12 Olympic-size swimming pools or Pasig River’s torrent every hour just to get to the coal,” it said.

SMPC warned that an unsuccessful transition could mean zero coal production by July, eliminating royalty payments during the disruption and potentially pushing up electricity prices given Semirara coal’s use in baseload power generation.

The company said it paid P43.4 billion in government share and P3.7 billion in taxes from 2021 through the first half of 2026.

—Edited by Miguel R. Camus