Consunji-led Semirara Mining and Power Corp. (SMPC) sought to calm investors who have been selling down its stock, as well as that of parent company DMCI Holdings Inc., by expressing confidence it will win the bid for a new coal operating contract (COC) after the government said it will not extend the existing mining permit.

COL Financial Group Inc. senior research manager George Ching said the firm’s management expressed confidence in winning the bid during an emergency briefing with analysts and investors following reports that the Department of Energy (DOE) is not extending its COC.

“This is mainly due to the company’s technical capabilities in operating large-scale coal operations. Furthermore, the remaining mine life of the Semirara coal mine might not be sufficient to justify the huge financial investment required for new entrants,” he explained.

Ching said SMPC management believes that the technical capabilities it has developed from nearly three decades of experience operating its coal mine on Semirara Island might be difficult to replicate.

“Management said it is not aware of any local conglomerate that has such capabilities at the moment. While foreign companies might have similar technical capabilities, [the company] is not aware of any foreign firms that have shown interest in bidding for the new COC,” he added.

SMPC management also noted that the investment required to operate a 15-million-metric-ton (MT) annual coal mining operation is about ₱3 billion per MT, or at least ₱45 billion, in addition to the financial requirement of the bid.

“Given that the estimated remaining mine life of Semirara Island is only about 10 years, the potential return might not justify the amount of investment required for new entrants,” Ching said.

While the DOE said that the bidding process would be based more on bidders’ technical qualifications and would not solely be determined by bid price, SMPC management said it still has no indication of the bid level required for it to win.

Meanwhile, in a disclosure to the Philippine Stock Exchange (PSE), SMPC said, “To date, the company respectfully clarifies that it has not received any formal response from the DOE regarding a final decision on its request for term adjustment under COC No. 5.”

SMPC said it continues to operate under its existing COC, which remains valid until July 14, 2027. Mining, shipments, and power generation activities are ongoing and are not affected.

“The company intends to fulfill the remainder of its current COC while preparing the appropriate mine plan and documentation should the DOE proceed with a formal bidding process, subject to the issuance of the relevant notices and guidelines,” it added.