Semirara Mining and Power Corp. (SMPC) is slashing its planned capital spending for the year as the energy unit of the Consunji family’s DMCI Holdings Inc. awaits clarity on the future of its flagship coal operations in Antique province.

According to SMPC, the integrated energy producer expects its capital expenditure to drop to ₱1.9 billion this year, a sharp decline from the ₱6.9 billion spent in the previous period.

The company attributed the reduction to its decision to scale down major equipment re-fleeting programs. SMPC has deferred these investments in the coal segment pending the outcome of the bidding for the Coal Operating Contract, or COC, covering Semirara Island.

The Department of Energy (DOE) earlier ruled that Semirara Mining’s 50-year operational license, which expires in July 2027, cannot be renewed through a simple extension. Instead, the agency has initiated a competitive bidding process for the rights to the country’s largest coal reserve.

While the auction is underway, SMPC noted that the timeline has been delayed as regulators address outstanding technical and administrative issues.

In the interim, the firm is maintaining what it describes as capital prudence. Of the total budget, the coal segment is allocated approximately ₱800 million. These funds are earmarked for network and infrastructure upgrades, mobile equipment support, and the maintenance of its 15-megawatt power plant on the island.

Meanwhile, the power division’s expenditure is projected to rise to ₱1.1 billion to cover plant maintenance, the procurement of critical spare parts, and information technology investments.

The company is navigating a complex global coal market. Semirara anticipates that seasonal demand and fuel switching will provide a floor for prices, particularly for Indonesian benchmarks.

Although increased domestic production in major global markets and shifting Indonesian trade policies may pressure the Indonesia Coal Index in the near term, the firm expects prices to remain stable before an anticipated seasonal softening toward the end of the year.

Semirara projects that benchmark prices will average approximately $130 per metric ton for the Newcastle index and $55 per metric ton for the ICI4. To mitigate volatility, the company is maintaining a flexible contracting strategy.

It noted that the addition of 350 megawatts of new baseload capacity and 3,400 megawatts of renewable energy to the Philippine grid should help insulate the domestic market from price shocks linked to geopolitical tensions in the Middle East.