The Philippines' Semirara Mining and Power Corp. (SMPC) has warned the government that awarding future development rights based solely on the highest financial bid poses significant risks to coal output and state revenue, as the Department of Energy finalizes terms for an upcoming auction, Manila Bulletin reported.

The miner, which operates the flagship Semirara mine in Antique, urged the department to set stringent prequalification standards covering technical expertise, operational history and financial backing ahead of the tender for 18 pre-determined coal blocks.

SMPC said selecting an operator strictly on financial offers could create severe operational vulnerabilities, warning that granting rights to an inexperienced company could result in zero production and deprive the state of royalties, undermining the purpose of the auction itself.

The company noted that operating the Semirara mine involves complex engineering, including extraction activities extending below sea level to depths comparable to a tall building. It said any new framework must prioritize operational continuity and mitigate disruption to the local economy, host communities and dependent workforces.

Uncertainty over the bidding timetable remains high. Energy Secretary Sharon Garin has reportedly scheduled the auction for early October, reversing an agency decision weeks earlier to postpone bidding to next year. That initial cancellation followed industry feedback that existing rules could threaten steady coal extraction on Semirara Island.

The government is seeking to balance revenue generation with energy security, aiming to maximize state returns while prioritizing domestic coal supply. Semirara's intervention highlights growing friction between the state's revenue goals and the operational realities of heavy extractive infrastructure.

The Semirara coal mine is the largest and only major open-pit surface coal mine in the Philippines, accounting for over 90% of the country's domestic coal production.