DOE, Bangsamoro energy ministry award 1st coal contract in BARMM

The Department of (DOE) and the Bangsamoro Ministry of Environment, Natural Resources, and Energy (MENRE) on Thursday awarded the very first coal operating contract (COC) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

In a statement, the DOE said the COC was awarded to Filipinas Systems, Inc. (FSI) for coal exploration in Kapai and Tagoloan II, Lanao del Sur, represents a significant milestone in BARMM’s energy development.

The Energy Department said the awarding of the first COC in the BARMM highlights the national government’s continued support for Bangsamoro Region’s economic growth and energy self-sufficiency.

“The awarding of the first COC in BARMM is a landmark moment for both governments. It reflects our collective commitment to advancing energy development and resource management in the region, empowering the BARMM to play a key role in the country’s energy future. This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” said Energy Secretary Raphael Lotilla.

The DOE said that any domestic sources of coal will lessen dependence on foreign sources as “ore than 80% of the country’s coal requirements are imported from abroad.“

Currently, 98% of the country’s coal imports are from Indonesia.

Under the terms of the coal service contract, FSI has committed to investing around P19 million in its two-year exploration work program.

Additionally, once converted to development and production stage, FSI will provide P150,000 annually in scholarships to qualified individuals from the contract area, supporting local communities.

The company has also pledged to pay the following to be shared equally between the DOE and the MENRE: 

• P250,000.00 signature bonus
• P250,000.00 development assistance
• P75,000.00 annually for training during the exploration period increasing to P200,000.00 annually when converted to development and production stage

The DOE said that the coal contract would increase autonomy for the BARMM over its energy resources, greater economic opportunities, improved geological knowledge, and the potential for community uplift through job creation and development programs. 

FSI is a division in the construction company FF Cruz & Co. Inc., which previously had COCs in 1987 and 1989 located in Payao and Siay, Zamboanga Sibugay coal districts. 

F.F. Cruz & Co. Inc. later assigned its rights over the aforementioned coal blocks to FSI.
—Ted Cordero/RF, GMA Integrated News