The Department of Energy (DOE) is pushing forward with the bidding process for coal development and production areas, including the controversial blocks on Semirara Island.
‘We just have to finish some changes to the rules, which might take a few weeks. I’m hoping that within the month it will be finished,’ said DOE secretary Sharon Garin. She added that the resumption of the bidding process and finalization of enhancements to the rules on how Semirara will be evaluated will most likely take place this month.
Garin recalled that the Semirara auction was put on hold ‘because we are still trying to figure out how (Semirara) should be treated.’
Consunji-led Semirara Mining and Power Corp. (SMPC) currently holds coal operating contract (COC) no. 5, which is among the coal blocks on Semirara Island that will be auctioned. The COC is valid until July 14, 2027.
A pre-bid conference was supposed to take place last month but the DOE deferred the bidding process ‘until further notice’ to address concerns raised over bidding parameters.
Garin said her office is ‘still figuring out’ and working with various government agencies ‘to figure out how to treat brownfield projects, extension or renewals.’
‘Just wait, within the month, we will announce something. We (still) have to deliberate on this,’ she said last week.
However, over the weekend, SMPC petitioned a Makati court for protection against the DOE from sharing the company’s detailed list of assets and propriety information with interested bidders.
In April, the DOE announced five firms have expressed in joining the bidding for coal production and development-Limay Power Inc. (LPI), Malita Power Inc. (MPI), TSR/Sta. Clara, DESCO, and SMPC. According to the DOE, SMPC can still join the bid.
SMPC argued that since it owns these assets by virtue of its COC and the Coal Development Act (PD 972), these assets will not be made available for the use of other bidders and should therefore not be considered in their bid submissions.
The government, it said, can own the assets only if SMPC fails to remove them from the production and exploration area, within one year after the termination of its contract in July 2027.
‘Government ownership of these assets is merely future and conditional. The bidding is supposed to choose a winner that has a viable mine plan and knows how to run one to make sure coal production is seamless to protect the country’s baseload electricity generation. It is not about SMPC and how it runs the mine,’ SMPC added.
SMPC said the DOE directed the company in four separate letters to submit detailed information on its assets, including geological and technical data, and a detailed list of equipment, including those specially reconfigured to manage an intensified river-strength flow of water into the Acacia mine.
DOE contended that once SMPC has recovered its costs, the equipment it acquired become government owned. The company maintains that all assets outside the production and exploration areas, and all equipment removed from the same, within one year from the end of the contract, remain with the company.
SMPC believes the bidding process is best served when each participant undertakes its own technical studies and develops its own approach, rather than relying on information generated through SMPC’s decades of investments and expertise.
This helps ensure that each bidder is evaluated based on its own technical work and proposal, SMPC said.
The petition filed by SMPC, the company said, is not intended to stop or delay the bidding process but merely to get clarity on a legal issue that potentially could harm the company’s legal and financial interests.
SMPC said it remains committed to participating in the bid, cooperating with the DOE, and complying with its regulatory obligations.
The filing has no impact on SMPC’s ongoing mining operations, which will continue as normal until the expiration of Coal Operating Contract No. 5 in July 2027.
According to Garin, her office has yet to receive a copy of the petition. ‘I don’t want to touch on the merits of the case, but I would rather say that it will not delay because we have enough information to bid out the project.’