Semirara Mining and Power Corp. is tightening its belt by cutting jobs at its minesite and sharply reducing investments, even as global coal prices recover, amid operational challenges and uncertainty over its mining contract.
The company’s board has approved a minesite workforce redundancy program, authorizing management to implement the layoffs in accordance with labor laws. While Semirara did not disclose how many employees would be affected or when the retrenchment would begin, its coal operations currently support around 5,500 workers, including more than 4,300 direct employees and approximately 1,100 indirect workers.
At the same time, Semirara slashed its 2026 capital expenditure budget by 68% to P1.9 billion from P5.9 billion a year earlier. Capital spending during the first half also dropped 80% to just P900 million.
Management said several investments in its coal business have been deferred while awaiting the results of the government's bidding for its Coal Operating Contract (COC). Only P800 million has been allocated for coal operations this year, with the remaining budget earmarked for ICT upgrades, maintenance of Semirara Island’s power facilities, and support equipment.
Mining Contract, Operational Issues Weigh on Coal Business
Semirara’s Coal Operating Contract No. 5 is set to expire on July 14, 2027. Instead of granting an extension, the Department of Energy opened the Semirara coal blocks for competitive bidding under the Philippine Conventional Energy Contracting Program. However, the bidding schedule has since been postponed, leaving the company waiting for a revised timeline.
Despite stronger coal prices in the first half of the year, Semirara was unable to fully benefit from the market recovery. Coal segment earnings fell 38% to P2.62 billion after production was hampered by water seepage at the Acacia mine and intensified stripping activities at the aging Narra mine. Rising fuel costs, contracted services, and higher production expenses also squeezed margins despite improved selling prices.
Power Business Emerges as Main Profit Driver
While coal struggled, Semirara’s power business delivered strong results. First-half earnings from the power segment rose 35% to P5.86 billion, accounting for roughly 70% of the company’s consolidated earnings.
Improved plant availability, higher electricity prices, and stronger operating performance helped offset the weakness in mining, allowing the group to post a 2% increase in first-half net income to P8.58 billion.
The company also approved a capital increase for its wholly owned subsidiary, St. Raphael Power Generation Corp., boosting its authorized capital to P3.1 billion from P1.1 billion. The move reflects Semirara’s growing focus on expanding its power business as uncertainty surrounding its coal operations continues.
