Local coal miners to block DOE supply deal with Indonesia

The Philippine Chamber of Coal Mines Inc. (Philcoal) is opposing the proposed signing of a coal contract between the government of Indonesia and the Department of Energy (DOE).

Philcoal is a non-stock, non-profit organization which promotes the interest of the local coal mining industry.

In a press statement, Philcoal claimed the government will unduly interfere in the coal mining industry which should properly be left to the private sector and let market forces dictate the outcome of the coal industry.

According to Philcoal, the DOE is expected to sign a long-term coal supply agreement or a memorandum of understanding with Indonesia on Dec. 11 to meet the coal requirements of the National Power Corp. (Napocor).

The agreement is expected to be signed during the ASEAN Summit scheduled in Cebu City.

"The rationale behind such agreement or understanding is to secure stable supply and equally stable prices of coal," it said.

But the group argued that there is an abundant supply of coal in the world market and prices have been going down due to oversupply.

The timing to get into such a deal by the government makes the private sector apprehensive, as this will create undue and unfair competition, Philcoal said.

The group said RA 9136 or the Electric Power Industry Reform Act of 2001 is passed to promote the utilization of indigenous and new and renewable energy sources in power generation in order to reduce dependence on imported energy.

"Philcoal then would like to seek reconsideration of the government’s plan to enter into an agreement or understanding considering the oversupply of coal in the world market," it said.

Energy Undersecretary Guillermo Balce admitted that they are working on a contract with the Indonesian government but "we have not yet firmed that up."

"We are just talking with the Indonesian government on the coal supply to protect national interest," Balce said.

Balce also noted that they only plan to source, in case they will enter into an agreement with Indonesian government, a measly 500,000 tons of the seven-million ton requirement of Napocor.

"They should consider this stance of the government as we consider their request to increase the share of local coal in the blending mix of Napocor from 10 percent to 20 percent," the DOE official said.