Manila Eyes Larger Coal Revenue Cut as Semirara Mine Tender Stalls

Revenue Terms Under Review

The Philippine government is exploring whether to extract a larger financial return from the Semirara coal deposit in Antique province, even as the competitive tender to award a new operating contract continues to drift past original deadlines.

Energy Secretary Sharon Garin confirmed that officials are examining options to increase the royalty formula. "The government can ask for a revenue-sharing arrangement that would provide more benefits, since those same collections would go back to the industry or to the general public," Garin said.

Semirara Mining and Power Corp., controlled by the Consunji family conglomerate, currently remits 30 percent of net proceeds to the Department of Energy under terms that govern the nation's largest coal operation. The site supplies the majority of domestic coal output and feeds thermal generation capacity across the archipelago.

Auction Timeline Slides Again

The tender process, already postponed once in April to address bidder queries, now faces a fresh delay of at least two months. Garin indicated the auction could slip to November as the energy ministry coordinates final terms with the Department of Finance, the Department of Economy, Planning and Development, and the Department of Environment and Natural Resources.

"It's not that simple," she noted, pointing to the multi-agency coordination required to finalize bidding documents.

The existing contract held by Semirara Mining expires in July 2027, leaving a narrowing window to complete the selection process and ensure operational continuity. Whether the incumbent operator will retain control or cede the asset to a rival bidder remains an open question as the clock runs down.

Legal Framework Versus Policy Ambition

Energy Undersecretary Alessandro Sales previously indicated that the government would likely maintain existing royalty levels, observing that revenue-sharing parameters are defined by statute. That position, however, now appears subject to reconsideration as the Marcos administration weighs the fiscal merits of a revised deal structure.

Speculation about higher royalty demands first surfaced earlier this year when the Department of Energy opted to hold a competitive auction rather than grant an extension to the current operator. The decision signaled a willingness to test market appetite and potentially reset commercial terms.

Strategic Stakes

The Semirara mine plays an outsized role in Philippine energy security, anchoring baseload power supply in a grid that remains heavily reliant on coal despite policy commitments to expand renewable capacity. Any disruption to output or change in operational control carries implications for electricity costs and supply stability across Luzon and the Visayas.

For the government, a renegotiated royalty structure offers a chance to capture additional resource rents at a time when fiscal consolidation remains a priority. For prospective bidders, clarity on final terms is essential to model project economics and commit capital to what would be a multi-decade concession.

The interplay between auction mechanics, regulatory coordination, and contract expiry timing will determine whether the transition unfolds smoothly or introduces uncertainty into a critical segment of the nation's energy infrastructure. As November approaches, stakeholders on all sides are waiting to see whether the revised tender documents finally materialize and what royalty figure they will contain.