Strict new bidding conditions established for the Semirara coal mine risk halting operations altogether by next July, threatening both national energy supplies and public revenues, according to current operator Semirara Mining and Power Corporation (SMPC).
Under the government’s newly outlined bidding framework, SMPC faces a unique and highly controversial mandate: it must explicitly inventory and surrender all of its operational assets to the state should it choose to submit a proposal. SMPC strongly criticized this condition, arguing that it targets them exclusively and directly contradicts Presidential Decree 972. The special coal mining law explicitly recognizes SMPC’s legal ownership of its equipment and grants a one-year grace period following contract expiration to dismantle and retrieve those assets. SMPC noted that being forced to give up its property as a pre-condition to compete effectively disqualifies it from entering a proposal.
While the rules impose heavy burdens on the incumbent operator, the terms for outside suitors are strikingly minimal. Competing firms face no pre-qualification requirements, need zero prior experience in complex mining operations, and are evaluated purely on the highest financial offer. SMPC characterized this shift from technical expertise to a single cash metric as deeply problematic, particularly given the extraordinary physical challenges of the Semirara pit. Extracting coal at the site requires deep-water sea mining below sea level and the continuous extraction of massive volumes of water equivalent to twelve Olympic-sized swimming pools every hour.
The corporate and economic consequences of these bid conditions carry far-reaching stakes for both the government and energy consumers. SMPC warned that an inexperienced winner would face insurmountable logistical hurdles before taking over next July, including procuring hundreds of heavy vehicles, hiring and training thousands of specialized workers, and securing billions of pesos in operating capital.
Failure to seamlessly navigate these technical demands will cause local coal output to plummet to zero when the current contract ends. Such a shutdown directly undermines the government’s goal of maximizing state revenues, wiping out substantial public collections; between 2021 and mid-2026 alone, SMPC generated 43.4 billion pesos in government shares alongside 3.7 billion pesos in taxes. Furthermore, because Semirara coal powers crucial baseload electricity generation, a sudden stop in local supply would force reliance on costlier energy sources, inevitably driving up power bills for households and businesses nationwide.
Adding to the controversy, the updated guidelines establish that key figures determining the final award will remain confidential. Expressing serious concern over rules that seem tailored to favor financial bids over operational viability, SMPC confirmed that it is currently reviewing all available legal avenues to defend its corporate assets and rights.
