The Department of Energy deserves credit for insisting on a competitive rebidding of the Semirara coal blocks instead of granting an outright extension to Semirara Mining and Power Corporation’s current coal operating contract, which expires in July 2027. The DOE has made clear that the Semirara area will be included in the 2026 coal bid round, and that awards will be based on technical, financial, legal, and work-program qualifications rather than on a simple highest-bid-wins formula.
That is the right policy. But good policy does not guarantee intense competition. The more difficult question is whether many serious players will actually want to commit capital to a coal asset at a time when the economics of coal are no longer what they were just a few years ago. Semirara’s own results suggest the answer may be more complicated than the optics of an open auction imply.
Coal is clearly no longer in the 2022–2024 supercycle conditions. In 2025, Semirara Mining and Power Corporation posted a 33% drop in net income to ₱13.1 billion from ₱19.6 billion, despite achieving record coal production of 19.9 million metric tons and record power sales of 5,296 gigawatt-hours. The company itself attributed the earnings decline mainly to lower coal and electricity prices, reduced shipments, and higher production costs.
The coal segment alone shows why newcomers may think twice. Semirara’s average coal selling price in 2025 fell 19% to ₱2,302 per metric ton from ₱2,853, while benchmark coal prices also softened sharply. The average Newcastle Index declined 22% year on year, and the Indonesian Coal Index 4 fell 15%. By the first nine months of 2025, the company’s coal segment contribution to net income had already dropped 48%, while consolidated revenue fell 13% and cost of sales still rose 4%.
Those are not the numbers that normally inspire a rush of aggressive bidders into a capital-intensive extractive industry. A coal concession is not just a legal award; it is a major industrial undertaking. Any challenger must be prepared to spend heavily on mine development, equipment, logistics, environmental compliance, community obligations, and rehabilitation. Manila Standard reported that operating a 15-million-metric-ton-per-year coal mine in Semirara requires investment running into several billions of pesos.
And Semirara is no ordinary mine. DOE officials themselves have emphasized how technically demanding the operation is. Energy Secretary Sharon Garin said the incumbent enjoys an advantage because it already has the equipment, experience, and operational familiarity to manage what she described as a complicated engineering project. The DOE has also stressed that the award will go to the “most qualified” bidder, not merely the most enthusiastic one.
Yes, there are interested parties. Reports indicate that firms linked to Meralco, San Miguel, Nickel Asia, and some smaller players attended the auction launch, and there have even been discussions about a possible partnership between Semirara and Meralco PowerGen. That shows the asset is important and commercially relevant. But interest is not the same as conviction. Buying bid documents or attending launch events is much easier than justifying billions in fresh coal investment while prices remain subdued.
This is why subdued coal prices may discourage the strongest kind of challenge to the incumbent. In a boom market, a bidder can argue that future pricing upside will justify the cost of entering a difficult and specialized mine. In a softer market, that argument is far harder to sustain. The barriers to entry remain high, but the expected payoff has become less spectacular.
In the end, the government may still award the Semirara coal contract to Semirara Mining and Power Corporation. Not because the process lacks legitimacy, but because market realities may point in that direction. The incumbent already knows the geology, owns the equipment, has the workforce, understands the engineering complexity, and can offer continuity in a strategically important domestic coal operation. In a cooler coal market, those advantages become even more decisive.
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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
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