Government mulls higher profit share in Semirara coal deal

The Marcos administration is considering a higher revenue share in the upcoming contract for the Semirara coal mine, as auction proceedings encounter further delays. Energy Secretary Sharon Garin indicated the government is "contemplating" a larger percentage of earnings from the Philippines' principal coal mine, which generates most of the nation's coal output.

In an interview, she stated that the government could seek an arrangement that delivers more advantages, as these funds would ultimately return to the industry or the general populace. The present arrangement obligates the existing operator, Semirara Mining and Power Corp. (run by the Consunji family), to pay 30 percent of its net gains to the Energy Department (DOE) as royalties.

Rumors of potential higher royalty requests emerged earlier this year when the DOE decided to auction the Semirara contract rather than granting SMPC's extension request. However, Energy Undersecretary Alessandro Sales had previously told The STAR that the government was inclined to maintain its stake in the earnings, emphasizing that the revenue-sharing framework was already established by law.

SMPC's existing agreement is slated to terminate in July 2027. With the auction for the new contract still facing setbacks, it remains unclear whether SMPC will renew its prolonged operations at the mine or if another firm will assume control once the present contract expires. Garin revealed that the auction might be postponed by at least two more months, potentially extending the schedule to November, as the DOE finalizes the terms of reference.

"We're attempting to collaborate with the Department of Finance (DOF), as well as the Department of Economy, Planning and Development (DEPDev) and even the Department of Environment and Natural Resources (DENR)," she stressed. As initially reported by The STAR, the bidding was suspended in April to address queries raised by potential bidders.