Consunji-led Semirara Mining and Power Corp. (SMPC) has denounced government rules requiring it to surrender its assets to participate in the highly anticipated coal bidding, saying they violate an existing law.
The group dismissed the rule as ‘unfair,’ claiming it ‘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,’ the company said in a statement on Wednesday.
Other firms seeking to secure the Semirara mine site are ‘not pre-qualified’ and do not need to prove their mining expertise, it said. This is because the government is looking to choose the highest financial offer.
‘Semirara is no ordinary mine. We are mining in the sea, deeper than the tallest building in Makati. We have to pump out the equivalent of 12 Olympic-size swimming pools or Pasig River’s torrent every hour to get to the coal,’ SMPC said.
‘The shift to the highest bidder from the most capable mining outfit as the main award criterion early this year is puzzling… because nobody stands to benefit from the new bid rules except the potential winner, which only has to submit a financial bid to win,’ SMPC added.
Additionally, the new operator would also need to cough up billions of pesos to purchase hundreds of heavy equipment and huge mining trucks, and employ and train thousands of workers.
If the government leans on an inexperienced company, SMPC warned that the country may see ‘zero’ coal production by July of next year. It would also translate to ‘zero royalty payment’ to the government, defeating the objective of the bidding to raise fresh funds.