MGEN drops plan to join Semirara mine auction

MERALCO PowerGen Corp. (MGEN), the power generation arm of Manila Electric Co. (Meralco), said it will no longer directly participate in the upcoming auction for the Semirara coal operating contract.

“We are still discussing with DMCI. We do not have the time to do the due diligence. So, the discussion is, they will go ahead, they will bid… We are not going to join the auction,” MGEN President and Chief Executive Officer Emmanuel V. Rubio told reporters on the sidelines of Meralco’s financial briefing on Monday.

He said MGEN remains open to a potential partnership with Semirara Mining and Power Corp. (SMPC), but only after the Consunji-led company secures the contract.

“If we see the offer to be acceptable and we see that there’s a business case for it, then we will discuss us coming in,” he said.

The Department of Energy is expected to open bidding this year for the coal operating contract covering Semirara Island.

SMPC has held the contract since 1977, allowing it to explore, develop, and mine coal on Semirara Island. The original 35-year contract was later extended by 15 years and is set to expire in 2027.

The company has sought approval from the Department of Energy to renew the contract for another 13 years.

SMPC earlier said it intends to participate in the auction once the government formally launches the bidding process.

“We are in talks with them. We believe that they have the advantage. They have all the equipment needed to extract coal in Semirara. The logical winner, with the rational bid, I think, is still Semirara,” Mr. Rubio said.

MGEN operates a portfolio of thermal and renewable energy assets under the Meralco group.

At the stock exchange on Wednesday, Meralco shares declined P6, or 0.91%, to close at P650 apiece. — Ashley Erika O. Jose