Japanese investors flag new mining auction rules

MANILA, Philippines — A group of Japanese businesses has raised red flags over the Philippines’ new framework for awarding mining and other natural resource contracts, warning that it could undermine investor confidence.

The Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) pushed back against the proposed joint administrative order (JAO) of the Department of Energy (DOE) and the Department of Environment and Natural Resources.

In particular, JCCIPI expressed concern over Section 6.10 of the JAO, which requires existing contract holders and operators to surrender covered assets to the government upon the expiration of their contracts.

“This raises questions regarding the legal basis for the requirement, its consistency with existing contractual arrangements and its implications for private asset ownership and investor confidence,” the group said in a position paper submitted to the DOE on Friday.

The requirement, JCCIPI stressed, could weaken companies’ balance sheets, restrict their borrowing capacity and undermine their ability to finance future operations.

For publicly listed companies, the provision could also erode shareholder value, it said.

“The apparent introduction of a different requirement raises concerns about regulatory predictability and the consistent treatment of existing operators,” JCCIPI said.

The group also called on the government to establish clear and transparent bidding rules that apply equally to all qualified participants.

While contract renewals should not be automatic, JCCIPI said existing operators should not be placed at a disadvantage simply because of investments they made under their current contracts.

It likewise urged the government to clarify how the JAO would interact with the laws and contractual arrangements governing different resource agreements, including Presidential Decree 972 or the Coal Development Act of 1976.

“Uncertainty over the ownership and treatment of operational assets at contract expiration can affect corporate valuation, financing arrangements and decisions on future investments,” JCCIPI said.

The JAO has emerged as a stumbling block in the DOE’s 2026 coal bid round, which covers the country’s largest coal mine on Semirara Island in Antique.

The DOE introduced the new framework after launching the auction, drawing pushback from several stakeholders, including Consunji led Semirara Mining and Power Corp.

The bidding process has since stalled as the government continues to work on finalizing the guidelines, further delaying the auction of the Semirara coal mine.

“JCCIPI is concerned that unclear requirements could discourage qualified operators from participating in future auctions and affect the decisions of prospective investors considering the Philippine mining industry,” it said.

“As the Philippines seeks to attract foreign investments into strategic industries and emerging supply chains, bidding requirements should be consistent with the government’s investment-attraction objectives and provide clarity to businesses that have already committed capital to the country,” it added.