Investors swamp DOE bid for coal contracts

MANILA, Philippines - Investors flocked yesterday to the Department of Energy’s bidding for service contracts for coal projects across the country.

The DOE said projects that will proceed to commercial production will help supply the coal demand of the country, a net importer of coal.

DOE Undersecretary Jose M. Layug Jr. said the Philippine Energy Contracting Round 4 (PECR 4) generated 69 bids for 38 blocks of coal projects.

“It is a good indicator. We have not attracted only old players but also new ones,” he said.

“You are seeing a lot of new parties in the list, half of that we do not know of,” he added.

Some of the coal blocks offered are located in Panukalan in Quezon, Rapu-Rapu Island in Albay, Bulalacao in Oriental Mindoro, Calatrava in Negros Occidental, Toledo in Cebu, Inabanga in Bohol, Magsaysay in Misamis Oriental, Bislig in Surigao del Sur, Nabunturan in Compostela Valley and Trento in Agusan del Sur.

Among the firms that submitted bids include existing players Philippine National Oil Co.-Exploration Corp. and (PNOC-EC), Semirara Mining Corp., and Benguet Corp., while new players include Superfine Mines and Minerals, Mega Philippines Inc. and Green Quezon Prime.

Layug said the benchmark investment is about $2.5 million for the two-year exploration of a coal block. The exploration permit is renewable for another two years.

He said the country’s coal output is only seven million metric tons (MT) per year, which is not enough to support the nation’s annual demand of 12 million MT.

Of the country’s production, three million MT are sold abroad, prompting power generators and cement plants to buy coal in countries like Indonesia.

The DOE has cut off the submission of pre-qualification documents for the PECR 4 last Feb. 29. Layug said coal blocks that did not receive offers will be offered in the next PECR.