DOE ready to defend new mining bid rules in court

MANILA, Philippines — The Department of Energy (DOE) is prepared to stand by its proposed framework for awarding mining and other natural resource contracts should it face legal challenges in court, its top official said.

This developed as an inter-agency mining council vowed to refine mining application rules as part of efforts to support better livelihoods, more accountable mining operations and stronger protection for host communities.

Energy Secretary Sharon Garin said the DOE is carefully studying the legal implications of its joint administrative order (JAO) with the Department of Environment and Natural Resources before issuing the final framework.

“What we are just trying to do at the DOE is give everyone a fair chance and eventually maximize the benefits (of the contracts) to the country,” Garin said in a recent interview.

Under the proposed JAO, existing contract holders and operators must surrender covered assets to the government upon the expiration of their contracts.

Dubbed the national interest evaluation framework, the guidelines will also make financial offers the “sole ranking factor” among qualified bidders to ensure that the government receives the highest possible economic benefit from the auction process.

However, the proposed rules have recently drawn opposition from Japanese investors and local mining companies, which warn that the order could create regulatory uncertainty and undermine investor confidence.

Among the most vocal critics is the Consunji Group’s Semirara Mining and Power Corp. (SMPC), the current operator of the country’s largest coal mine on Semirara Island in Antique.

The proposed rules were introduced only after the DOE had launched its coal bidding round, contributing to delays that eventually led to the termination of the Semirara auction.

Garin acknowledged that SMPC and other prospective bidders interested in the Semirara coal mine were “not happy with us.”

But the framework would help ensure that most of the coal extracted from the mine would be used domestically, she emphasized.

“Because of the (Middle East) war, I would rather push for everything that we produce or extract within Philippine jurisdiction to be used here. We use imported coal from Indonesia. That does not help us, that kind of system,” Garin said.

The Philippines imports about 95 percent of its coal supply, with Indonesia as the major supplier. This heavy reliance on imports leaves the country vulnerable to price volatility, particularly during supply chain disruptions or changes in other countries’ export policies.

Garin warned that the Semirara coal auction could face further delays if the JAO is challenged and the court “tells us to stop.”

Meanwhile, the Mining Industry Coordinating Council (MICC) is looking to refine mining regulations to make it easier for small-scale miners to operate legally while ensuring better protection for communities hosting mining projects.

MICC chair and Finance Secretary Frederick Go, together with co-chair and Environment and Natural Resources Secretary Juan Miguel Cuna, agreed to pursue several policy changes during MICC’s 52nd and final meeting of the year on Oct. 27.

“The council agreed to refine mining application rules while maintaining safeguards, strengthen local government notification on consultation concerns, and include provisions to restore Indigenous Peoples’ control of ancestral lands after mining and rehabilitation obligations are met,” the Department of Finance (DOF) said in a statement.

It also said that the council pushed for faster clarification of tax exemptions for registered small-scale miners with interim contracts, helping them operate legally and sell gold through the Bangko Sentral ng Pilipinas.

Former president Rodrigo Duterte signed Republic Act 11256 in 2019, which exempts registered small-scale miners who sell gold to the central bank from paying income and excise taxes.  — Aubrey Rose Inosante