Manila Electric Co. (Meralco) Chairman and CEO Manuel V. Pangilinan said the coal operating contract on Semirara Island is “on [our] radar,” showcasing interest in competing in the government’s planned auction for the asset.

“Meralco, or specifically, Meralco PowerGen Corp. will take a look at it,” Pangilinan said to reporters, referring to the coal contract currently held by Semirara Mining and Power Corp. (SMPC), according to a report by the Manila Times.

The Department of Energy (DOE) earlier launched a Pre-Determined Area coal bid round offering 18 blocks, which also included areas on Semirara Island covered by Coal Operating Contract No. 5 (COC5). The contract is still valid until July 14, 2027.

Energy Secretary Sharon Garin said the government would conduct the bidding this year after the Department of Justice issued an opinion that SMPC’s contract cannot be renewed outright in line with constitutional provisions.

Pangilinan described the opportunity as a potential “mine mouth kind of auction,” referring to a setup where a power plant is built near or beside a coal mine to allow direct transport of fuel to the facility.

“You secure your supply chain, right? Locally. So that must be the benefit. So you save on freight at least,” he said, noting that such an arrangement would both guarantee a local fuel source and reduce travel logistics.

Under the DOE’s framework, coal operating contracts will be awarded through a competitive process that considers qualifications as well and not solely from the highest bid.

SMPC, in response, said it has not received a formal decision on its request for a term adjustment but confirmed it would participate in the bidding should it happen. The company cited its decades of experience in managing complex engineering projects, along with its established operations, technical expertise and equipment fleet as critical qualifications for consideration.

The development triggered a market reaction, with a 21 percent plunge in SMPC’s share price amidst ongoing concerns over the contract’s future owner. 

With the bidding expected to be conducted ahead of the contract’s 2027 expiration, who will ultimately secure control of one of the country’s key coal assets?

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