MANILA, Philippines — The Consunji family may have the strongest operational advantage in the battle for the Semirara coal contract—but experience alone may not be enough to secure the country’s biggest coal-producing area.
The Marcos administration is weighing whether the government should demand a larger share of the financial benefits from the next contract covering the Semirara coal mine in Antique, potentially raising the stakes for longtime operator Semirara Mining and Power Corp. (SMPC).
Energy Secretary Sharon Garin has said the government is considering a revenue-sharing arrangement that would provide greater benefits to the State. She said additional collections could eventually return to the energy sector and the public.
That creates a potentially difficult equation for the Consunji-led company: SMPC could enter the bidding with decades of experience, existing infrastructure and specialized equipment—but it may have to make a stronger financial offer to retain control of the mine.
Government wants more from Semirara
Under SMPC’s existing Coal Operating Contract No. 5, the company remits 30 percent of its net proceeds as royalties to the government.
But the next contract could look different.
The Department of Energy and other agencies are working on revised bidding rules that could require bidders to offer measurable economic benefits to the government. A proposed national-interest evaluation framework would prioritize the economic returns generated for the State among bidders that first pass technical, financial, legal and other qualification requirements.
Importantly, the rules have not yet been finalized.
That means it would be premature to say that SMPC has already been required to pay a higher royalty or that a higher payment will definitely determine the winner.
What is clear is that the government is studying how to maximize the value of the Semirara resource before awarding a new contract.
Experience gives the Consunjis a major advantage
SMPC has operated the Semirara coal mines for decades and is already equipped with the infrastructure, workforce, logistics network and specialized machinery required for the challenging operation.
The company has also emphasized its technical expertise in operating the Acacia mine, a deep mine requiring extensive water-management systems and specialized equipment.
SMPC has said its long experience, established infrastructure and technical capabilities give it a strong competitive position in the auction. Its own disclosures also identify technical competence, financial capability, resource efficiency and regulatory compliance as central considerations in the bidding process.
But the government has made clear that the auction is not simply about rewarding the incumbent.
Other major companies have expressed interest in the coal area, including units of San Miguel Global Power and other energy players. Meralco PowerGen had also shown interest earlier in the process before later backing away, with MGEN chief Emmanuel Rubio describing SMPC as the “logical winner” because of its existing equipment and experience.
The biggest question: How much will the winner give the government?
This is where the Semirara contest could become particularly interesting.
Earlier this year, Energy Undersecretary Alessandro Sales said the government’s existing share was legally defined and indicated that the royalty arrangement would remain at 30 percent of net proceeds under the existing framework.
But in August, Garin said the government was considering a larger revenue share for the new arrangement.
The apparent shift does not necessarily mean the government has already decided on a higher royalty. Rather, officials are still working with the Department of Finance, the Department of Economy, Planning and Development and the Department of Environment and Natural Resources to finalize the terms of the new auction.
For SMPC, however, the implications are significant.
If the final bidding system places substantial weight on financial offers, the company could face a choice between offering the government more to retain the mine or accepting potentially lower returns under the new contract.
Auction delayed as government rewrites the rules
The Semirara auction has already been delayed.
The DOE initially launched the competitive bidding process in February 2026. The bidding schedule was subsequently postponed as the government worked through questions involving the terms of reference, domestic coal requirements, government revenue and the treatment of an already-producing mine.
The latest reports indicate that the auction could be pushed toward the latter part of 2026, with November previously mentioned as a possible timeline.
The government is also considering requiring a much larger portion of Semirara’s coal output to be directed to the domestic market.
Garin has said officials want to reverse the current situation in which much of the coal is exported, potentially directing 80 percent to 90 percent of production toward local power generation, although the final requirement remains subject to the revised auction terms.
That would make the next Semirara contract important not only for government revenues but also for the country’s energy-security strategy.
A legal battle is adding another layer
SMPC is also challenging the DOE over demands that it disclose detailed information about its mine assets and equipment to prospective bidders.
In a petition filed before the Makati Regional Trial Court in July, SMPC argued that ownership of its assets does not automatically transfer to the government simply because the company has recovered their costs.
The company said government ownership of certain assets would be conditional and tied to provisions of its existing contract.
The dispute remains pending, and SMPC has said the case is intended to clarify its legal rights rather than stop the auction. Its July 16 disclosure to the Philippine Stock Exchange also stated that the filing had no impact on its ongoing operations under COC No. 5.
Semirara’s deadline is getting closer
SMPC’s current Coal Operating Contract No. 5 expires on July 14, 2027.
The contract dates back decades, and the government rejected SMPC’s request for a further 13-year extension after seeking a legal opinion, leading to the decision to put the coal area up for competitive bidding.
That leaves the Consunji-led company competing for the same operation it has spent decades developing.
And that may be the central question of the entire auction:
Will SMPC’s unparalleled experience and existing infrastructure outweigh a rival bidder willing to offer the government a more attractive financial package?
For now, there is no final answer.
The DOE is still rewriting the rules, the auction has been delayed, and the final government revenue-sharing terms have yet to be settled.
But one thing is increasingly clear: the next Semirara contract will not simply be about who knows how to operate the mine. It could also come down to who is willing to give the Philippine government the better deal.
WWC ONE MEDIA J.M.S
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