DOE sees too few takers of gov’t coal projects

The Department of Energy (DOE) reported a low turnout of private firms looking to seal coal and oil exploration deals with the government.

Energy officials last Friday opened bids for the coal exploration areas under the Philippine Energy Contracting Round V (PECR 5) on Friday with just five companies vying for seven sites. They were TQGT Minerals Resources, Coalblack Mining Corp., SAHI Mining Corp., Boston Minerals Mining Corp., and Philsaga Mining Corp. The bidding for the petroleum exploration sites has been pushed back from February 2015 to May 2015.

PECR 5 is part of a government effort to tap other energy sources and curb the country’s reliance on imported fuel.

Nenito Jariel Jr., division chief of the DOE’s Coal and Nuclear Management division, said that the low turnout of applications for coal exploration areas reflected the low prices of coal in the market. Coal prices now range from P1,978 to P2,384 per metric ton (MT).

Compared with the last contracting round, (PECR 4 in 2012), the agency “received a total of 69 coal applications since prices were higher, with amounts ranging from P1,783 to P2,451 per MT in 2013,” Jariel said.

According to accounting firm Ernst & Young, the drop in international prices may lead to the shutdown of several mining firms that provide drilling, transport, and logistics services to end-users. Commodities tracker Platts also noted the decline of coal prices in the United States, one of the world’s top consumers. Also, China has restricted coal imports.

Initially there were nine applications submitted. Two bidders vied for the Area 2 coal exploration site in Tago and Tandag, Surigao del Sur province; one for Area 4 in Butuan City, Agusan del Norte and Sibagat in Agusan del Sur (SAHI Mining); two for Area 5, which is in the same area as Area 4; one for Area 6 in Bunawan, Agusan del Sur; one for Area 7 in Bunawan and Trento, Agusan del Sur; one for Area 10 in Godod, Zamboanga del Norte and Kabasalan, Zamboanga Sibugay; and one for Area 11, which is located in the same site as Area 10.

However, only eight applications were accepted for processing after Boston Minerals was disqualified during the preliminary assessment.

During the opening of applications, Undersecretary Zenaida Monsada informed the bidders of the criteria in assessing the bidding documents, which is 40 percent for the work program, 20 percent for the technical requirements, and another 40 percent for the financial requirements.