By Sheldeen Joy Talavera, Reporter

THE government is planning to offer the contract governing the right to mine on Semirara Island after turning down the request of the Consunji-led mining firm for renewal.

Energy Secretary Sharon S. Garin said that Semirara Mining and Power Corp. (SMPC) cannot further renew its 50-year coal operating contract after seeking a legal opinion from the Department of Justice (DoJ).

“We’ll follow the [DoJ] opinion [that] there cannot be a renewal. There will be a bidding, which everybody can join, including the current [operator],” she told reporters on Friday.

Ms. Garin said that the Department of Energy (DoE) and DoJ have already discussed the matter with the SMPC.

The Energy chief said that the department would have to start the bidding process this year to find “the most qualified” bidder.

“We need to have it ready because you don’t want the current operator to start not doing anything or move out. So, we really need to prepare a few years before the expiration so if there’s a change or no change, at least we know early on,” she said.

Ms. Garin said that SMPC can still to join the bidding, noting its edge as the existing operator of the contract.

“The advantage is they (SMPC) already know what to do. They have the equipment, hundreds of equipment, and they have experience in Semirara,” she said.

The coal operating contract, which was originally set for 35 years, was issued in 1977, granting SMPC the exclusive right to explore, develop, and mine coal on Semirara Island until July 2012.

In 2008, the DoE extended the term by 15 years, giving the company until 2027 to mine.

SMPC had sought an extension of 13 years, according to Ms. Garin.

Under the existing contract, the company enjoys incentives, including exemption from all taxes except income tax, as well relief from tariff duties and compensating tax on importation of machinery and equipment required for the coal operations.

SMPC, in return, is required to pay 30% of net proceeds to the DoE as part of royalties.

SMPC, the power generation and coal-mining unit of the Consunji group, is the Philippines’ largest coal producer, accounting for 97% of domestic production.

For the first nine months of 2025, the company’s total coal shipments reached a record high of 12.9 million metric tons, driven by stronger exports and high deliveries to own power plants.

However, coal revenues fell by 18.7% year on year to P24.73 billion amid lower average selling prices.

Sought for comment, China Bank Capital Corp. Managing Director Juan Paolo E. Colet said that granting SMPC a reasonable extension to operate the coal mine would be “the better solution” given its experience.

“The company knows the asset very well and how to operate it efficiently, and they have invested billions of pesos to ensure its productivity,” Mr. Colet told BusinessWorld.

He said that continuity will prevent any risk of operational delay or disruption.

“Perhaps the government can just negotiate better terms with Semirara so that the parties achieve a win-win outcome,” Mr. Colet said.