SMC mobilizes 4 firms for coal mine auction

MANILA, Philippines — After signifying interest in taking over the country’s largest coal mine, tycoon Ramon Ang has fielded four companies under his conglomerate, San Miguel Corp. (SMC), to lead preparations for the auction.

But incumbent operator Semirara Mining and Power Corp. (SMPC) is not backing down just yet, despite new auction rules requiring it to turn over its mining assets to the government.

In a pre-bid conference yesterday, SMC units Malita Power Inc., Limay Power Inc., SMC Powergen Inc. and San Miguel Global Power Holdings Corp. (SMGP) were among the prospective bidders seeking clarification on the requirements and provisions governing the coal bid round.

Ang, who chairs both SMC and SMGP, earlier confirmed to The STAR the group’s intent to join the closely watched bidding round.

Ang, however, said he has yet to study the auction’s Terms of Reference.

One SMGP representative, during the pre-bid conference, commended the Department of Energy (DOE) for requiring current operators to surrender their assets.

At the same time, the representative sought clarification on whether the provision would cover immovable assets, including the pier and dewatering system that are essential to the continuity of mining operations.

The representative also urged the DOE to verify the inventory of assets to be turned over by current operators, saying the agency should not simply rely on their list as “final and conclusive.”

Presiding over the pre-bid conference, Energy Undersecretary Alessandro Sales said the asset turnover requirement was intended to ensure that all bidders would compete on “equal footing.”

The exchange, however, was cut short for members of the media covering the proceedings virtually, as the DOE repeatedly revoked their access to the pre-bid conference even before Sales could finish addressing the prospective bidders’ questions.

The STAR has sought an explanation from the DOE on why media access was restricted despite the public interest surrounding the auction, but the agency has yet to respond.

The coal bid round, launched on Wednesday, covers three predetermined areas comprising 18 coal blocks across Antique, Cagayan and Isabela.

At the center of the auction is the Semirara mine, which accounts for the majority of domestic coal production.

The bidding will determine whether the mine will have a new operator or remain under SMPC, whose 50-year contract is set to expire on July 14, 2027.

SMPC was also among the companies present at the pre-bid conference.

Also present were Eurodite, an international operating consultancy firm, and Desco, a Filipino-owned drilling company.

The DOE held the pre-bid conference ahead of next month’s bid submission deadline, with the winning bidder to be named in January.

Under the DOE’s instructions to bidders (ITB), companies vying for the Semirara coal blocks are required to pay a non-refundable signature bonus of P1 billion.

They must also commit to producing at least 60 million metric tons of coal over a five-year work program, in line with their proposed mine development, manpower and infrastructure plans.

Of the committed coal output, at least 35 percent must be allocated for sale or supply to domestic off-takers, according to the ITB.