Coal mine operators will be required to set aside funds for emergency response, rehabilitation, and mine decommissioning, according to the Department of Energy (DOE).

In a new circular, the DOE highlighted the need to mitigate risks associated with coal operations. It now requires operators to allocate at least three percent of their approved exploration or operating cost for rehabilitation activities, and to establish a coal mine contingency and decommissioning fund (CMCDF).

CMCDF includes a coal mine contingency fund (CMCF), which would be utilized for coal operation emergencies that may damage the environment or affect nearby communities.

The DOE stated that operators must have a ₱5-million budget for surface mining, on top of ₱1 million for underground mining.

“In case of disbursement from the CMCF, the operator shall replenish the same in an amount equal to the disbursed amount, within 60 days from such disbursement,” the agency said.

Aside from emergency funds, the final mine decommissioning fund (FMDF) will cover expenses for the coal mine’s end of operations, ensuring its safe closure and cleanup.

“The FMDP shall include a management plan for the remediation of contaminated soil and water resources, land restoration, proper dismantling abandonment of facilities and equipment, and other necessary activities,” the DOE explained, citing operators’ duties to restore the area used for their operations.

This fund will be computed as a percentage of the total estimated cost of the mine’s decommissioning plan.

Moreover, coal mine companies are required to have a progressive rehabilitation plan within the next 60 days after the circular was issued by the DOE, while those with existing coal operating contracts would need to submit their FMDP within the next six months.

The DOE issued these financial allocations to ensure coal mining practices adhere to safety and environmental standards, as well as enable maximum economic production. To make sure operators strictly follow the new mandate, any non-compliance with the work program and budget would lead to cancellation of their operating contracts.