The power generation unit of Manila Electric Co. (Meralco) is stepping back from the direct bidding process for a prized coal concession in Antique province.

Emmanuel V. Rubio, Meralco PowerGen Corp. president, said they will instead wait for the Consunji family’s mining unit to secure the contract before potentially buying a minority stake.

MGen is holding ongoing talks with the Consunji family regarding a partnership for coal production, according to Rubio. However, the initial bid for the 10,000-hectare Semirara coal block will be made solely by the incumbent operator, Semirara Mining and Power Corp.

The strategy allows MGen to bypass the upfront bidding risks while positioning itself to secure fuel supplies if the terms are favorable.

Rubio said that if the Consunjis proceed and bid, and MGen finds the subsequent offer acceptable with a strong business case, the company will then discuss coming into the venture.

The Department of Energy (DOE) is opening up the site in Caluya, Antique, to competitive bidding because Semirara Mining’s current 50-year operating contract is scheduled to expire in July 2027. While the government has indefinitely deferred the submission of bids to address stakeholder concerns, Semirara Mining remains confident that its three decades of operations on the island make it the most viable candidate to continue.

MGen's decision to partner rather than compete reflects the high technical barriers of the site. Rubio noted that Semirara Mining is the only partner MGen has approached because of the company’s clear operational advantages, including possessing all the specialized equipment needed to extract coal on the island.

The deposits are located below sea level, requiring complex engineering solutions to manage severe water seepage.

The high cost of maintaining these complex operations has already forced Semirara Mining to manage its capital prudently amid the contract uncertainty. The company slashed its capital expenditure budget for this year to ₱1.9 billion, down 68 percent from ₱5.9 billion in 2025, as it deferred major equipment re-fleeting until the outcome of the government auction is clear.

If the partnership succeeds, it would provide Meralco's generation fleet with a physical hedge against volatile global fuel prices, while allowing the Consunjis to retain technical control of the country's largest coal reserve.