Semirara to sustain coal output amid energy risks

Title Sustaining Coal Output Semirara's Challenges Amidst Energy Ris
Risks

As the Philippines faces growing energy risks, Semirara Mining and Power Co
Corp., the country's largest domestic coal producer, must navigate challeng
challenges to maintain its coal output. With 97% of the country's coal prod
production, Semirara's continued operation is crucial to meeting the nation
nation's baseload power demands.

The Challenges Ahead

President and Chief Operating Officer Maria Cristina Gotianun emphasized th
that managing water inflows at their below-sea-level operations is particul
particularly critical. Failure to control these could halt operations withi
within days, making it essential for the company to successfully navigate t
this challenge. With Semirara currently supplying approximately 35% of the 
country's domestic baseload power, the situation is indeed very critical r
right now.

Record Coal Production and Profit Drop

Notably, Semirara's operations in 2025 delivered record coal production, al
although profit dropped 33% to P13.060 billion primarily due to lower coal 
and electricity prices, among other factors. Despite this, Gotianun stresse
stressed that the company is working to broaden its markets while keeping i
its mines and power plants running well.

Contract Extension Rejection and Upcoming Auction

In February, the Justice department rejected Semirara's bid to extend its 5
50-year mining concession on Semirara Island by another 13 years. The contr
contract will now be auctioned by the Department of Energy (DOE) within the
the year, with April 28 as the deadline for submission of mine plans. While
While Semirara can still join the bidding process, losing the bid would req
require it to remove equipment within a year, adding urgency to the situati
situation.

Technical Competence and Financial Offers

Gotianun noted that the DOE is likely to focus more on technical competence
competence than financial offers in the bidding process. However, she empha
emphasized that should Semirara lose to another bidder, it has one year to 
adapt, making it essential for the company to be prepared.

Industry Insights

Chairman and President of DMCI Holdings Inc., Isidro Consunji, pointed out 
that it would be difficult for new entrants to match Semirara's experience.
experience. He noted that the bidding process is a legal requirement rather
rather than a reflection of operational deficiencies.

No Joint Bid or Discussions with Metro Pacific Investments Corp.

Gotianun clarified that discussions with Metro Pacific Investments Corp., w
which had expressed interest in Semirara's operations, have not progressed.
progressed. There has been no approach for a joint bid, leaving the company
company to focus on its own efforts to sustain coal output.

Conclusion

As the energy landscape continues to evolve, it is essential for companies 
like Semirara to adapt quickly and maintain their coal output to meet the n
nation's power demands. With the contract approaching its expiration date a
and the company facing heightened challenges, sustaining coal output will r
require innovative solutions and swift decision-making.

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.