Japanese investors flag new mining auction rules
A group of Japanese businesses has raised red flags over the Philippines’ new framework for awarding mining and other natural resource contracts, warning that it could undermine investor confidence.
Japanese businesses have expressed concern over the Philippines' new framework for mining and natural resource contracts, warning it could damage investor confidence. The Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) criticized a proposed joint administrative order (JAO) by the Department of Energy (DOE) and Department of Environment and Natural Resources (DENR), specifically Section 6.10.
This section mandates that existing contract holders and operators surrender assets to the government upon contract expiration. JCCIPI questioned the legal basis for this requirement, its consistency with existing contracts, and its impact on private asset ownership and investor confidence. They stated that the provision could weaken companies' balance sheets, reduce borrowing capacity, and hinder future financing.
For publicly listed companies, it could also diminish shareholder value. JCCIPI urged the government to establish clear and transparent bidding rules applicable to all qualified participants, emphasizing that existing operators should not face disadvantages merely due to their investments under current contracts. The group also requested clarification on how the JAO would interact with laws and contractual arrangements governing various resource agreements, such as the Coal Development Act of 1976.
The JAO has become a hurdle in the DOE's 2026 coal bidding round, which includes the Semirara Island coal mine. The DOE introduced the new framework after launching the auction, but pushback from stakeholders, including Semirara Mining and Power Corp., has stalled the bidding process. JCCIPI fears unclear requirements could deter qualified operators from future auctions and impact investment decisions in the Philippine mining industry.
They emphasized that favorable bidding conditions should align with the government's goals of attracting foreign investments and provide clarity to businesses that have already invested capital in the country.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
