DMCI Warns New Mining Rules Could Face Legal Challenge Over Contract Conflicts

 

DMCI Holdings Inc. chairman Isidro Consunji has warned that the government’s revised rules for awarding natural resource contracts could face legal challenges if inconsistencies with existing laws and agreements remain unresolved.

Speaking on the sidelines of the 2026 International Mining Conference and Exhibition, Consunji said the government should clarify the relationship between the new regulatory framework and contracts already signed with mining companies before enforcing the policy. He indicated that DMCI could consider legal action if the changes adversely affect its interests.

At the center of the dispute is Joint Administrative Order (JAO) 2026-01, issued by the Department of Energy and the Department of Environment and Natural Resources. The order establishes new procedures and assessment criteria for awarding contracts covering natural resource projects, including coal and mineral extraction.

Consunji questioned whether the administrative order could impose requirements that conflict with existing legislation or alter contractual arrangements already established between companies and the government. He argued that regulatory changes should not undermine agreements that operators entered into under the previous framework.

The implications extend beyond contract interpretation. Mining companies are also concerned about provisions that could require operational assets to be transferred when contracts expire. The proposed rules have raised questions about whether businesses would retain ownership of equipment and other assets acquired during their operations.

Consunji also criticized the consultation process, describing it as rushed. Industry groups have similarly raised concerns that the new framework could introduce uncertainty into investment decisions by changing the conditions under which mining projects operate.

The Chamber of Mines of the Philippines (COMP) and the Philippine Nickel Industry Association have questioned several provisions, including bidding requirements that they believe could place existing operators at a disadvantage. They have also challenged evaluation criteria that, in their view, do not adequately recognize technical capabilities, operational experience and environmental performance.

These concerns could have significant implications for companies that have already committed capital to long-term mining projects. Resource extraction requires substantial spending on equipment, infrastructure and site development, often with returns spread over many years. Changes to contract conditions can therefore affect not only future investment plans but also the financial assumptions underpinning existing operations.

DMCI has direct exposure to the sector through DMCI Mining Corp., which produces nickel, chromite and iron laterite, and Semirara Mining and Power Corp., its coal mining and power generation business.

COMP chairman Michael Toledo said the Philippines must pursue investment while strengthening public confidence in the mining industry. He emphasized that investors need consistent regulations, communities deserve meaningful participation and tangible benefits, and the government must ensure compliance with environmental and other requirements.

The debate over JAO 2026-01 highlights the challenge of balancing regulatory reform with contractual stability. The government must establish clear standards for managing the country’s mineral resources, but the way those standards interact with existing agreements will be critical to their implementation.

For the mining sector, the central issue is whether the new rules can provide stronger oversight without creating uncertainty over previously established obligations. Resolving those questions before implementation could help reduce the risk of litigation and preserve investor confidence while addressing public concerns about how the country’s natural wealth is developed.