Firms vie for 38 coal prospects

By: Amy R. Remo
Philippine Daily Inquirer
12:01 am | Saturday, March 31st, 2012


The Department of Energy on Friday received 69 bids for contracts to explore and develop 38 highly prospective coal blocks across the country, considered an “overwhelming” number that proved investors’ unwavering confidence in the Philippines.
At the sidelines of the opening of bid offers Friday, Energy Undersecretary Jose M. Layug Jr. said the Philippine Energy Contracting Round 4 for coal attracted a lot of potential investors, of which about half were new players in the local coal industry.
Among the companies that submitted bids were Benguet Corp., Semirara Mining Corp., PNOC Exploration Corp., South Davao Development Co. Inc., SKI Mining and Empire Asia Mining Corp.
Layug said the DOE was targeting to award contracts within 150 days from the bid opening date yesterday, or by August 2012 at the latest. The coal blocks that had only one bidder will be processed faster than those that had six to eight bidders. For the coal blocks that did not have bidders, the DOE is set to re-offer these areas in future PECRs.
The offered coal blocks were in Quezon, Camarines Norte, Albay, Sorsogon, Masbate, Occidental Mindoro, Oriental Mindoro, Negros Occidental, Cebu, Bohol, Agusan del Norte, Misamis Oriental, Agusan del Sur, Surigao del Sur, Compostela Valley, Davao Oriental, Lanao del Sur, Lanao del Norte, South Cotabato, Sultan Kudarat, Sarangani, Zamboanga del Norte, and Zamboanga Sibugay.
Initially, the DOE offered 30 coal blocks when it launched the PECR 4 for coal in December last year. Should all the 30 contracts be awarded, the DOE is expecting initial investments to run up to P2.4 billion within a two-year exploration period.
The number of areas, however, were increased to 38 blocks in anticipation of a huge number of bidders.
Layug stressed the need for the country to harness its own coal resources given an increasing demand for the commodity, which now stood at about 12 million metric tons a year. Local production averaged 7 million MT, of which 3 million tons are exported to various Asian markets. Coal imports remained huge at 7 million tons a year, he added.
It is expected that over the next 20 years, coal will remain the major fuel for power generation and the government continues to encourage the private sector to explore and develop the country’s prospective coal blocks to find additional reserves that can be used to address growing local demand.
By harnessing its own resources, the government believes that it will be able to push for energy independence that will allow it to reduce its fuel imports as well as lessen its vulnerability to global price fluctuations.