Date post: | 14-Apr-2018 |
Category: |
Documents |
Upload: | donvidachiye-liwag-cena |
View: | 224 times |
Download: | 0 times |
of 37
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
1/37
Philippine Mining Act of 1995
(Republic Act No. 7942)AN ACT INSTITUTING A NEW SYSTEM OF MINERAL
RESOURCES EXPLORATION, DEVELOPMENT,
UTILIZATION, AND CONSERVATIONSubmitted by:
Lyndon Cena
Nicole Bondad
Mary Ruth Datario
8/27/2013
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
2/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 1 of36
EVOLUTION OF PERTINENT MINING LAWS
1. ROYAL DECREE OF MAY 14, 1867 OR THE SPANISH MINING LAW
As provided by the Civil Code of Spain (Art. 339), mines and mineral lands could be susceptible of privateappropriation by means of grants from the State. Such being the case, the Regalian Doctrine wasfollowed.
Regalian Doctrine provides that minerals belong to the State wherever they may be found, whether inpublic lands or in private lands.
For the reason of prospecting on private property, the permission of the owner was necessary. In case ofrefusal by the owner, the government might be called upon to intervene.
2. ACT OF CONGRESS OF JULY 1, 1902 OR PHILIPPINE BILL OF 1902
It contained provisions for the open and free exploration, occupation and purchase of mineral depositsand the land where they may be found.
It declared all valuable mineral deposits in public lands in the Philippine Islands, both surveyed andunsurveyed to be free and open to exploration, occupation, and purchase, and the land in which they are
found to occupation and purchase by citizens of the United States, or of Philippine Islands.
The holder of the mineral claims so located is entitled to all the minerals which may lie within his claim,but he may not mine outside the boundary lines of his claims.
One of the continuing requirements for the subsistence of the mining claim is performance of not lessthan one hundred dollars worth oflabour or undertaking of improvements of the same value every year.
The locators failure to comply with which shall operate to open the claim or mine to relocation in thesame manner as if no location of the same had even been made.
3. ACT 624
The Regalian Doctrine was still recognized. The disposition of minerals of the public domain was reserved to the State. They were not open to exploration, occupation, and exploitation except only to citizens of the United
States and of the Philippines.
It prescribed regulations to govern the location and the manner of recording mining claims and theamount of work necessary to hold possession thereof.
Such regulations reinforced the annual work or labour requirement of not less than one hundred dollarsworth.
4. COMMONWEALTH CONSTITUTION
It declared all natural resources of the Philippines, including mineral lands and minerals, to be propertybelonging to the State.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
3/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 2 of36
However, not really all of the Philippines natural resources were considered part of the public domain.5. CA No. 137 or Mining Act
It expressly adopted the Regalian Doctrine following the provisions of the 1935 Constitution. It granted only lease rights to mining claimants who are proscribed from purchasing the mining claim
itself.
The said provisions of Mining Act were expressly inapplicable to mining claimants who had located andrecorded their claims under the Philippine Bill of 1902.
6. EO 141
It established the status of such unpatented mining claims which have not complied with the annual work
requirement, as having been abandoned and open for relocation, their declarations of location being accordingly
cancelled.
7. PD 463
It declared that all mineral deposits in public or private lands belong to the State, inalienable andimprescriptively.
It recognized whatever rights or reservations had already been existing with respect to certain mininglands, apparently alluding to the rights of mining claim holders under the Philippine Bill of 1902.
The possessory rights of mining claim holders under the Philippine Bill of 1902 remained effective for aslong as said holders complied with the actual work requirement.
8. PD 1214
It required all the holders of unpatented mining claims to secure mining lease contracts under PD 463. Holders of subsisting and valid patentable mining claims located under the Philippine Bill of 1902 were to
file mining lease applications therefor within one year from the effectivity of the said decree.
The filing of such mining lease applications was considered a waiver of the holders rights to the issuanceof mining patents for their claims.
Non-filing of applications for mining lease by the holders thereof within one-year period would cause theforfeiture of all their rights to their claims.
1
REPUBLIC ACT No. 7942 OR THE PHILIPPINE MINING ACT OF 1995
It was enacted instituting a new system for the exploration, development, utilization and conservation ofthe natural resources of the country.
It defines the modes of agreements for mining operations, outlines the procedure for the filing andapproval, assignment or transfer and withdrawal and fixes their terms.
1Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, G.R. No. 63528,Sept. 9, 1996,261 SCRA 528
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
4/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 3 of36
DENR ADMINISTRATIVE ORDER 96-40
Revised Implementing Rules and Regulations of Republic Act No. 7942 Otherwise Known as the Philippine Mining Act of
19952
Declaration of Policy
All minerals are owned by the State 3 To promote rational exploration, development, utilization and conservation Role of government and private sector To enhance national growth that effectively safeguards the environment and protect the rights of affected
communities4
Governing principle per DAO 96-40
Sustainable development Improving the total quality of life Principle of sustainable mining Pro-environment and pro-people mining Mining is temporary land use Optimum land use Progressive and engineered mine rehabilitation Current best practices Wealth-generating opportunities Environment-responsible endeavours Mining activities must be in accord with state policies.
IMPORTANT CONCEPTS
ANCESTRAL LANDS refers to all lands, exclusively and actually possessed, occupied, or utilized by indigenous cultural
communities by themselves or through their ancestors in accordance with their customs and traditions since timeimmemorial, and as may be defined and delineated by law.
BLOCK OR MERIDIONAL BLOCK means an area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of
longitude, containing approximately eighty-one hectares (81 has.).
2 La Bugal-Blaan Tribal Association, Inc. v. Ramos, GR No. 127882, Jan. 27,2004, 421 SCRA 148, per J. Carpio-Morales3Sec. 2, RA No. 7942.
4Sec. 1, Chapter 1, Title XIV, EO No. 292
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
5/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 4 of36
CARRYING CAPACITY refers to the capacity of natural and human environments to accommodate and absorb change
without experiencing conditions of instability and attendant degradation.
CONTIGUOUS ZONE refers to water, sea bottom and substratum measured twenty-four nautical miles (24 n.m.) seaward
from base line of the Philippine archipelago.
CONTRACT AREA means land or body of water delineated for purposes of exploration, development, or utilization of the
minerals found therein.
CONTRACTOR means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a
financial or technical assistance agreement.
CO-PRODUCTION AGREEMENT (CA) means an agreement entered into between the Government and one or more
contractors in accordance with Section 26(b) hereof.
ECOLOGICAL PROFILE OR ECO-PROFILE refers to geographic-based instruments for planners and decision-makers which
presents an evaluation of the environmental quality and carrying capacity of an area.
ENVIROMENTAL COMPLIANCE CERTIFICATE (ECC) refers to the document issued by the government agency concerned
certifying that the project under consideration will not bring about an unacceptable environmental impact and that the
proponent has complied with the requirements of the environmental impact statement system.
ENVIRONMENTAL IMPACT STATEMENT (EIS) is the document which aims to identify, predict, interpret, and communicate
information regarding changes in environmental quality associated with a proposed project and which examines the range
of alternatives for the objectives of the proposal and their impact on the environment.
EXCLUSIVE ECONOMIC ZONE means the water, sea bottom and subsurface measured from the baseline of the Philippine
archipelago up to two hundred nautical miles (200 n.m.) offshore.
EXISTING MINING/QUARRYING RIGHT means a valid and subsisting mining claim or permit or quarry permit or any mining
lease contract or agreement covering a mineralized area granted/issued under pertinent mining laws.
EXPLORATION means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys,
remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining
the existence, extent, quantity and quality thereof and the feasibility of mining them for profit.
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT means a contract involving financial or technical assistance for large-
scale exploration, development, and utilization of mineral resources.
FOREIGN-OWNED CORPORATION means any corporation, partnership, association, or cooperative duly registered in
accordance with law in which less than fifty per centum (50%) of the capital is owned by Filipino citizens.
GROSS OUTPUT means the actual market value of minerals or mineral products from its mining area as defined in the
National Internal Revenue Code.
INDIGENOUS CULTURAL COMMUNITY means a group or tribe of indigenous Filipinos who have continuously lived as
communities on communally-bounded and defined land since time immemorial and have succeeded in preserving,
maintaining, and sharing common bonds of languages, customs, traditions, and other distinctive cultural traits, and as may
be defined and delineated by law.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
6/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 5 of36
JOINT VENTURE AGREEMENT (JVA) means an agreement entered into between the Government and one or more
contractors in accordance with Section 26(c) hereof.
MINERALS refers to all naturally occurring inorganic substance in solid, gas, liquid, or any intermediate state excluding
energy materials such as coal, petroleum, natural gas, radioactive materials, and geothermal energy.
MINERAL AGREEMENT means a contract between the government and a contractor, involving mineral production-sharing
agreement, co-production agreement, or joint-venture agreement.
MINERAL LAND means any area where mineral resources are found.
MINERAL RESOURCE means any concentration of minerals/rocks with potential economic value.
MINING AREA means a portion of the contract area identified by the contractor for purposes of development, mining,
utilization, and sites for support facilities or in the immediate vicinity of the mining operations.
MINING OPERATION means mining activities involving exploration, feasibility, development, utilization, and processing.
OFFSHORE means the water, sea bottom, and subsurface from the shore or coastline reckoned from the mean low tide
level up to the two hundred nautical miles (200 n.m.) exclusive economic zone including the archipelagic sea and
contiguous zone.
ONSHORE means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and creeks.
PERMITTEE means the holder of an exploration permit.
POLLUTION CONTROL AND INFRASTRUCTURE DEVICES refers to infrastructure, machinery, equipment and/or
improvements used for impounding, treating or neutralizing, precipitating, filtering, conveying and cleansing mine industria
waste and tailings as well as eliminating or reducing hazardous effects of solid particles, chemicals, liquids or other harmful
by products and gases emitted from any facility utilized in mining operations for their disposal.
PRIVATE LAND refers to any land belonging to any private person which includes alienable and disposable land being
claimed by a holder, claimant, or occupant who has already acquired a vested right thereto under the law, although the
corresponding certificate or evidence of title or patent has not been actually issued.
QUALIFIED PERSON means any citizen of the Philippines with capacity to contract, or a corporation, partnership,
association, or cooperative organized or authorized for the purpose of engaging in mining, with technical and financial
capability to undertake mineral resources development and duly registered in accordance with law at least sixty per cent
(60%) of the capital of which is owned by citizens of the Philippines: Provided, That a legally organized foreign-owned
corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or technical
assistance agreement or mineral processing permit.
QUARRYING means the process of extracting, removing and disposing quarry resources found on or underneath the surface
of private or public land.
QUARRY PERMIT means a document granted to a qualified person for the extraction and utilization of quarry resources on
public or private lands.
QUARRY RESOURCES refers to any common rock or other mineral substances as the Director of Mines and Geosciences
Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand,
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
7/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 6 of36
diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone, marble, marl, red burning clays for potteries
and bricks, rhyolite, rock phosphate, sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic glass: Provided, That
such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically
workable quantities: Provided, further, That non-metallic minerals such as kaolin, feldspar, bullquartz, quartz or silica, sand
and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious
stones, and other non-metallic minerals that may later be discovered and which the Director declares the same to be ofeconomically workable quantities, shall not be classified under the category of quarry resources.
5
IMPORTANT FEATURES
1. non-impairment of existing mining / quarrying rights 2. recognition of valid and existing mining claims and lease / quarry applications
I. Organisational Structure
a) Primary Agency
The Department of Natural Resources (DENR) shall be the primary agency responsible for the observation,
management, development, and proper use of the States mineral resources including those in reservations,
watershed areas, and lands of public dominion. The Secretary of the DENR shall have the authority to enter in
mineral agreements on behalf of the government upon the recommendation of the Director of the Mines and
Geosciences Bureau (MGB), and promulgate such rules and regulations in order to implement the intent and
provisions of RA 7942.
The Secretary of the DENR has rule-making authority pursuant to RA 7942. Such rule-making power was
sustained by the Supreme Court in the Miners Association of the Philippines v. Factoran (G.R. No. 98332, January
16, 1995, 240 SCRA 100). In the said case, the Supreme Court held that DENR Administrative Order No. 57 (DAO
No. 57) applies to all existing mining leases or agreements which were granted after the effectivity of the 1987
Constitution. The exploration, development and utilisation of the countys natural resources are vital to the public
interest and general welfare of the people. Hence, it is subject to alterations by the State in the exercise of its
police powers. Thus, the constitutional restriction on non-impairment of contracts and obligations cannot
preclude the State from altering, modifying, or amending mining leases or agreements.
b) Authority of the Mines and Geosciences Bureau (MGB)
The MGB shall advise the Secretary of the DENR on matters pertaining to geology and mineral resources
exploration, development, utilisation and conservation.6
Hence, the MGB shall have the following authority,
among others:
a. To have direct charge in the administration and disposition of mineral lands and mineral resources;b. To undertake geological, mining, metallurgical, chemical and other researches, as well as mineral
exploration surveys: provided that, for areas closed to mining applications, the MGB can undertake
studies for purposes of research and development;
c. To confiscate, after due process, surety, performance and guaranty bonds after notice of violation;5Sec. 3, RA No. 7942
6Section 16, Chapter 3, Title XIV, EO No. 292
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
8/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 7 of36
d. To recommend to the Secretary of the DENR the granting of Mineral Agreements or to endorse tothe Secretary of the DENR for action by the President to grant FTAAs and to monitor its compliance
by the contractor;
e. To cancel or to recommend cancellation, after due process, mining rights, mining applications andmining claims, for non-compliance with pertinent laws, rules and regulations;
f. To deputise, when necessary, any member or unit of the Philippine National Police (PNP) andbarangay, duly registered and DENR accredited NGO, or any qualified person to police mining
activities;
g. To assist the Environmental Management Bureau (EMB) under the DENR in the conduct ofenvironmental impact assessment in mining projects; and
h. To exercise such other authority vested by RA 7942 and its IRR.The Director of the MGB may delegate such authority and other powers and functions to the Regional
Director. There shall be as much regional offices in the Philippines as may be established by the Secretary of the
DENR, upon recommendation of the Director of the MGB.
The MGB shall establish a mineral resource database system which will include mineral rights management
system, among others. Also, the MGB shall publish a mineral gazette at least once a year containing a current list
of mineral rights, locations, and other mining information relevant to mineral resources development.
c) Quasi-Judicial Powers of the Mines and Geosciences Bureau (MGB)
The MGB as provided for by PD 2181 has exclusive and original jurisdiction to hear and decide cases
involving the cancellation and/or enforcement of mining contracts due to refusal of the claimowner/operator to
abide by the terms and conditions thereof. The adjudication of mining cases is a purely administrative matter. Thecourts do not have the competence to decide matters concerning activities relative to the exploration, exploitation
development and extraction of mineral resources. Hence, with respect to purely administrative matters, the
courts cannot interfere. However, the determination of whether or not a contract is void or voidable is a judicial
question and decisions on administrative matters falling under executive jurisdiction can be set aside by the courts
if there is proof of grave abuse of discretion, fraud or error of law.
d) Role of the Local Government
The local government shall have the following roles in mining projects within their respective jurisdictions
which are subject to RA 7942, pursuant to the Local Government Code and other pertinent laws:
a. Ensure public consultation and participation;b. Approve applications for small-scale mining in coordination with Bureau/Regional Office(s);c. Receive shares from the wealth generated by mineral resources;d. Facilitate community decision-making on social acceptability of the project;e. Participate as a member of the Multipartite Monitoring Team;
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
9/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 8 of36
f. Participate as a member of the Mine Rehabilitation Fund (MRF) Committee;g. Receive social infrastructure and community development projects for the host and neighboring
communities;
h. Mediate between Indigenous Cultural Centers and Contractor(s) as may be requested;i. Coordinate with the Department and Bureau in implementing the Act and IRR, except that in areas
covered by the Southern Philippines Council for Peace and Development, Autonomous Region of
Muslim Mindanao and future similar units, their appropriate offices shall coordinate with the
Department and Bureau; and
j. Perform other powers and functions under applicable laws, rules, and regulations.7II. Scope of Application
a) Areas Open to Mining
Subject to any mining rights or reservations and prior agreements of all parties, all mineral resources in
public or private lands shall be open to mineral agreements or financial or technical assistance agreement
applications. Any conflict that may arise shall be heard and resolved by the panel of arbitrators.
b) Areas Closed to Mining
Mineral agreement or Financial or Technical Assistance Agreement Applications (FTAA) that shall not be
allowed:
i. In military and other government reservations, except upon prior written clearance by the governmentagency concerned;
ii. Near or under public or private buildings, commentaries, archaeological and historic sites, bridges,highways, waterways, railroads, reservoirs, dams or other infrastructure projects, private or public works
including plantations or valuable crops, except upon written consent of the government agency or private
entity concerned and upon validation of the MGB;
iii. In areas covered by valid and existing mining rights;iv. In areas expressly provided for by law;v. In areas covered by small-scale mining as defined by law unless prior consent of the small-scale miners, in
which case a royalty payment upon utilisation of minerals shall be agreed upon by the parties, and said
royalty forming a trust fund for the socioeconomic development of the community concerned;
vi. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness area, mangrove forests,mossy forests, national parks, provincial/municipal forests, parks, greenbelts, game refuge and bird
7Section 8, DAO No. 96-40
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
10/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 9 of36
sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected
Area System (NIPAS).
The following areas may be opened for mining applications, the approval of which is subject to certain
conditions which are as follows:
i. Areas covered by FTAA which shall be opened for quarry resources mining applications pursuant to RA7942, Section 53
8upon written consent of the FTAA applicants provided that, sand and gravel permit
applications shall not require consent from the FTAA, Exploration Permit, or Mineral Agreement applicant
except for Mineral agreement or Exploration Permit applications covering sand, gravel, or alluvial gold
and that the Director of the MGB shall formulate necessary guidelines to govern aforementioned
provision;
ii. DENR Project Areas upon prior consent from the concerned agency9; andiii. No ancestral land shall be opened for mining operations without prior consent of the indigenous cultural
community concerned.
III. Concept of Exploration
a) Exploration Permit
As exploration permit grants the right to conduct exploration for all minerals in specified areas. The MGB
shall have the authority to grant an exploration permit to a qualified person.10
Exploration activities may be directly undertaken by the DENR or by a qualified person in specified areas
as determined by the Secretary of the DENR. However, the conduct of mineral exploration by a qualified person in
all areas open to mining shall be initially undertaken through an exploration permit, subject to the provisions onthe FTAA.
In case an immediate technical study of an area is necessary, the DENR or any of its authorised
agencies/instrumentalities, and exploration permit applicant may enter into a memorandum of agreement to
jointly undertake the study.
b) Section 3(aq) of RA No. 7942 is not Unconstitutional
An exploration permit merely grants a qualified person the right to conduct exploration for all minerals in
specified areas. As such, the permit does not amount to an authorisation to extract and carry off the mineral
resources that may be discovered. Thus, the State risks nothing and loses nothing by granting the exploration
8A permit specifying the origin and quantity of non-processed mineral ores or minerals shall be required for their transport. Transport permits shall be
issued by the mines regional director who has jurisdiction over the area where the ores were extracted. In the case of mineral ores or minerals being
transported from the small-scale mining areas to the custom mills or processing plants, the Provincial Mining Regulatory Board (PMRB) concerned shall
formulate their own policies to govern such transport of ores produced by small-scale miners. The absence of a permit shall be considered asprimafacie
evidence of illegal mining and shall be sufficient cause for the Government to confiscate the ores or minerals being transported, the tools and equipment
utilized, and the vehicle containing the same. Ore samples not exceeding two metric tons (2 m.t.) to be used exclusively for assay or p ilot test purposes
shall be exempted from such requirement.9Section 15, Consolidated Implementing Rules and Regulations of RA No. 7942 (CIRR)
10Section 20, RA No.7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
11/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 10 of36
permits to local or foreign firms. In fact, the State stands to gain from the data gathered in the exploration
activities.
In La Bugal-Blaan Tribal Association v. Ramos11
, the Supreme Coured held that while the Constitution
mandates the State to exercise full control and supervision over the exploitation of mineral resources, nowhere
does it require the government to hold all exploration permits and similar authorisations. In fact, there is no
prohibition at all against foreign or local corporations or contractors to hold exploration permits.
c) Persons Qualified to Apply for a Exploration Permit
The qualifications are as follows:
i. Any Filipino citizen of legal age and with capacity to contract;ii. A Filipino-owned Corporation, Partnership, Association or Cooperative, at least sixty percent
(60%) of the capital is owned by Filipino citizens, organized or authorized for the purpose of
engaging in mining with technical and financial capability to undertake mineral resourcesdevelopment and duly registered in accordance with the law; or
iii. A foreign-owned Corporation, Partnership, Association or Cooperative duly registered inaccordance with law and in which less than fifty percent (50%) of the capital is owned by Filipino
citizens.
d) Term of Exploration Permit
The term of an exploration permit shall be for two (2) years from date of issuance, renewable for like
periods but not exceeding a total term of four (4) years for non-metallic mineral exploration or six (6) years for
metallic mineral exploration, provided that the permitee has complied with the terms and conditions of the
exploration permit and that the permitee has not been found guilty of violating the provisions of RA 7942 includingits CIRR. Furthermore, the conduct of a feasibility study and filing of the declaration of mining project feasibility
shall be undertaken during the term of the exploration permit.
e) Transfer of Exploration Permit
The exploration permit may to transferred or assigned to another person or entity who is qualified but
subject to the approval of the Secretary of the DENR as provided for in Section 25, RA No.7942. Said provision is a
safeguard from the permit from being transferred to another person or entity that might not be qualified and as
such prevents the circumvention of the law.
11GR No. 127882, December 1, 2004, 445 SCRA 1
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
12/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 11 of36
f) Maximum Area
The maximum area that a qualified person or entity may hold at any time shall be:
g) Rights and Obligations of the Permitee
The permittee, his heirs or successors-in-interest shall have the right to enter, occupy and explore the
permit area. If private or other parties are affected, the permittee shall first discuss with the said parties the
extent, necessity, and manner of his entry, occupation and exploration and in case of disagreement, a panel of
arbitrators shall resolve the conflict or disagreement.
The permittee shall undertake an exploration work on the area as specified by its permit based on an
approved work program.
The permittee may apply for a mineral production sharing agreement, joint venture agreement, co-
production agreement or financial or technical assistance agreement over the permit area, which application shall
be granted if the permittee meets the necessary qualifications and the terms and conditions of any suchagreement. However the exploration period covered by the exploration permit shall be included as part of the
exploration period of the mineral agreement or financial or technical assistance agreement.12
h) Terms and Conditions of Exploration Permit
An exploration permit shall contain the following terms and conditions:
i. The right to explore shall be subject to valid, prior and existing rights of any party(ies) withinthe subject area;
ii. The Permit shall be for the exclusive use and benefit of the permittee or its duly authorizedrepresentative and, shall under no circumstances, be used by the permittee for purposes other
than exploration;iii. The term of the Permit shall be for a period of two (2) years from date of issuance thereof,
renewable for like periods but not to exceed a total term of six (6) years for nonmetallic
minerals exploration or eight (8) years for metallic minerals exploration: Provided, that no
renewal of Permit shall be allowed unless the permittee has complied with the terms and
conditions of the Permit and has not been found guilty of violation of any provision of the Act
and these implementing rules and regulations: Provided, further, that in cases where further
12Section 23, RA 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
13/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 12 of36
exploration is warranted and on condition that the permittee has substantially implemented
the Exploration and Environmental Work Programs as verified by the Bureau/concerned
Regional Office, the Secretary may further grant renewal of the Exploration Permit: Provided,
furthermore, that the permittee shall be required to set up a performance surety equivalent to
the expenditure requirement of the Exploration and Environmental Work Programs: Provided,finally, That the conduct of feasibility studies shall be included during the term of the
Exploration Permit;
iv. The permittee shall submit to the Bureau/concerned Regional Office within thirty (30) calendardays after the end of each semester a report under oath of the Exploration Work Program
implementation and expenditures showing discrepancies/deviations including the results of
the survey, labouratory reports, geological reports/maps subject to semi-annual inspection and
verification by the Bureau/concerned Regional Office at the expense of the permittee:
Provided, That any expenditure in excess of the yearly budget of the approved Exploration
Work Program may be carried forward and credited to the succeeding years covering the
duration of the Permit;
v. The permittee shall submit to the Bureau/concerned Regional Office within thirty (30) calendardays from the end of six (6) months after the approval of the Environmental Work Program
(EWP) and every six (6) months thereafter a status report on its compliance with the said EWP;
vi. The permittee shall annually relinquish at least 20% of the permit area during the first two (2)years of exploration and at least 10% of the remaining permit area annually during the
extended exploration period. However, if the permit area is less than five thousand (5,000)
hectares, the permittee need not relinquish any part thereof. A separate report of
relinquishment shall be submitted to the Bureau/concerned Regional Office with a detailed
geologic report of the relinquished area accompanied by maps at a scale of 1:50,000 and
results of analyses and corresponding expenditures, among others. The minimum exploration
expenditures for the remaining area after relinquishment shall be based on the approved
Exploration Work Program;vii. The Secretary of the DENR or his/her duly authorized representative shall annually review the
performance of the permittee;
viii. The permittee shall submit to the Bureau/concerned Regional Office a final report upon theexpiration or relinquishment of the Permit or its conversion into Mineral Agreement or FTAA in
a form and substance comparable to published reports of respected international
organizations and shall incorporate all the findings in the permit area, including locations of
samples, assays, chemical analyses and assessment of the mineral potential. Such report shall
include complete detailed expenditures incurred during the exploration;
ix. In case of diamond drilling, the permittee shall, upon request of the Director/concernedRegional Director, submit to the Bureau/concerned Regional Office a quarter of the core
samples which shall be deposited in the Bureau/concerned Regional Office Core Library forreference and safekeeping;
x. Offshore exploration activities shall be carried out in accordance with the United NationsConvention on the Law of the Sea (UNCLOS) and in a manner that will not adversely affect the
safety of navigation at sea and will ensure accommodation with other marine activities such as
fishing, aquaculture, transportation, etc.;
xi. Onshore exploration activities shall be carried out in a manner that will, at all times, safeguardthe environment;
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
14/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 13 of36
xii. If the permittee applies for a Mineral Agreement or FTAA over the permit area, the explorationperiod covered by the Exploration Permit shall be considered as the exploration period of the
Mineral Agreement or FTAA;
xiii. The permittee shall comply with pertinent provisions of the Act and these implementing rulesand regulations; and
xiv. Other terms and conditions which the Bureau/concerned Regional Office may deemappropriate.
13
i) Registration of Exploration Permit
Upon evaluation that all the terms and conditions and all pertinent requirements are in order and that the
subject area has been cleared from any conflict, the Director shall approve and issue the Exploration Permit, and
the permittee shall cause the registration of the same to the Bureau/Regional Office concerned within fifteen (15)
working days from receipt of the written notice and upon payment of the required fees provided, that if all the
mandatory and otherrequirements have been complied with and the Exploration Permit application is still
awaiting approval five (5) months after its date of filing, the said Exploration Permit application, upon submission
of an affidavit by the applicant attesting to the full compliance with all the pertinent requirements, shall be
deemed approved and the Director of the MGB shall issue the Exploration Permit within five (5) working days from
receipt of said affidavit, for registration and release. This is without prejudice to the DENR undertaking the
necessary investigation to determine any liability as to the non-issuance of the Exploration Permit within the
prescribed period. Furthermore, the permittee shall comply with the required consultation with the Sanggunian
concerned pursuant to the pertinent provisions of RA No. 7160, The Local Government Code, prior to the
implementation of the Exploration Work Program.14
j) Exploration Permit Revokable
The exploration, development and utilization of the countrys natural mineral resources are matters
impressed with great public interest. Like timber permits, mining exploration permits do not vest in the grantee
any permanent or irrevocable right within the purview of the non-impairment of contract and due process clauses
of the Constitution, since the State, under its all-encompassing police power, may alter, modify or amend the same
in accordance with the demands of the general welfare.15
A mining license, being a mere privilege, does not vest absolute rights in the holder. Thus, without
offending the due process and the non-impairment clauses of the Constitution, it can be revoked by the State in
the public interest.16
MINERAL AGREEMENT
What is a Mineral Agreement?
A Mineral Agreement is an agreement between a Contractor and the Government wherein the Government grants
to the Contractor the exclusive right to conduct mining operations within, but not title over, the contract area. Mining
13Section 22, CIRR, as amended by Section 4, DAO No. 99-57, Section 3, DAO No. 2003-46 and further by Sections 5 and 6, DAO No. 2005-15
14Section 23, CIRR, as amended by Section 7, DAO No. 2005--15
15Southeast Mindanao Gold Mining Corporation v. Balite Portal Mining Cooperative, G.R. No. 135190, April 3, 2002, 380 SCRA 145
16Republic of the Philippines v. Rosemoor Mining and Development Corporation, G.R. No. 149927, March 30, 2004, 426 SCRA 517
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
15/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 14 of36
operations that are allowed under Mineral Agreements include development/construction and utilization of minera
resources including the continuance of exploration works during the conduct of development/construction/utilization
activities. Mineral Agreements are classified into:
1) Mineral Production Sharing Agreement (MPSA) - a mineral agreement wherein Government shares in theproduction of the Contractor, whether in kind or in value, as owner of the minerals. In return, the Contractorshall provide the necessary financing, technology, management and personnel for the mining project.
2) Co-Production Agreement (CA) - a mineral agreement wherein the Government provides inputs to the miningoperations other than the mineral resources; and
3) Joint Venture Agreement (JVA) - a mineral agreement wherein the Government and the Contractor organize ajoint venture company with both parties having equity shares. For its share, the Government is entitled to a
share in the gross output of the mining project aside from its earnings in the equity of the company.
Who is qualified to apply for a Mineral Agreement?
The following Qualified Person may apply for a Mineral Agreement:
(1) Individual - a Filipino citizen of legal age and with capacity to contract; or(2) Corporation, Partnership, Association or Cooperative - organized or authorized for the purpose of
engaging in mining, duly registered in accordance with law, at least sixty percent (60%) of the capital
of which is owned by Filipino citizens.
How much area is granted for a Mineral Agreement?
Each Qualified Person is limited to the following maximum size of area17
to apply for or hold at any one time under
a Mineral Agreement:
I. Onshore
2. For metallic minerals Individual - Eight Hundred Ten (810) hectares Corporation/ Partnership/ Association/Cooperative - Five Thousand (5,000) hectares
3. For non-metallic minerals except for those in item nos. 3, 4, and 5 Individual - Eight Hundred Ten (810) hectares Corporation/ Partnership/ Association/Cooperative - Two Thousand (2,000) hectares
4. For sand and gravel Individual - Twenty (20) hectares Corporation/ Partnership/ Association/Cooperative - Fifty (50) hectares
17Section 28, Chapter V, RA 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
16/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 15 of36
4. For marble, granite and construction aggregates Individual - Fifty (50) hectares Corporation/ Partnership/ Association/Cooperative - One Hundred (100) hectares
5. For cement raw materials such as limestone, shale and limestone Individual - Five Hundred (500) hectares Corporation/ Partnership/ Association/Cooperative - One Thousand (1000) hectares
II. Offshore
1. For metallic minerals - Five Thousand (5,000) hectares2. For non-metallic minerals - Two Thousand (2,000) hectares
What is the term of a Mineral Agreement?
A Mineral Agreement shall have a term not exceeding twenty-five (25) years from the date of its execution, and
renewable for another term not exceeding twenty-five (25) years under the same terms and conditions, without prejudice
to changes mutually agreed upon by the Government and the Contractor.
After the 50 year term of the Mineral Agreement, the operation of the mine may be undertaken by the
Government or through a Contractor. The contract for the operation of a mine will be awarded to the highest bidder in a
public bidding after due publication of the notice thereof. However, the original Contractor shall have the right to equal the
highest bid upon reimbursement of all reasonable expenses of the highest bidder18
.
What are the mandatory requirements19
in the acceptance of an MPSA application?
An MPSA application shall be filed in the Mines and Geosciences Bureau (MGB) Regional Office (RO) concerned, for
mineral and non-mineral reservation areas, using the prescribed form (MGB Form No. 06-1) through payment of the filing
fee and submission of five (5) sets of the following mandatory requirements:
a. For an individual Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s)
and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map
in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer;
Three-year Development/Utilization Work Program (MGB Form No. 6-2) duly prepared, signed and sealed by alicensed Mining Engineer or Geologist;
Proof of technical competence, including, among others, curricula vitae and track records in mining operations andenvironmental management of the technical personnel who shall undertake the activities in accordance with the
submitted Development/Utilization Work Program;
18Section 32, Chapter V, RA 7942
19Primer on Application for Mineral Agreements (http://www.mgb.gov.ph)
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
17/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 16 of36
Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program,such as a copy of the income tax return for the preceding year and proof of bank deposit or credit line in the
amount of at least Two Million Five Hundred Thousand Pesos (PhP2,500,000.00);
Mining Project Feasibility Study (MGB Form No. 5-3); and Complete and final exploration report pertaining to the area.
b) For a corporation, partnership, association or cooperative - Duly certified Certificate of Registration, Articles of Incorporation/Partnership/Association and By-Laws issued by
the Securities and Exchange Commission or authorized Government agency concerned, or Certification from the
Bureau/Regional Office concerned that the said documents are duly registered in that Office;
Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s)and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map
in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer;
Three-year Development/Utilization Work Program (MGB Form No. 6-2) duly prepared, signed and sealed by alicensed Mining Engineer or Geologist;
Proof of technical competence, including, among others, curricula vitae and track records in mining operations andenvironmental management of the technical personnel who shall undertake the activities in accordance with the
submitted Development/Utilization Work Program;
Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program,such as latest audited financial statement and, where applicable, Annual Report for the preceding year, credit
line(s), bank guarantee(s) and/or similar negotiable instruments;
Affidavit of Undertaking for corporation, partnership, association or cooperatives (Annex A of DENR MemorandumOrder No. 99-10) declaring:
5. The list of applications filed and the Mining Permit(s)/Contract(s) granted to the applicants, including thecorresponding hectarage and location of the areas, disaggregated on a per province basis; and
6. The list of other Applicant(s)/Contractor(s)/Permittee(s) in which more than seventy percent (70%) of theauthorized capital stock is held by stockholders of the applicant, including the corresponding hectarage,
disaggregated on a per province basis.
Mining Project Feasibility Study (MGB Form No. 5-3); and Complete and final exploration report pertaining to the area.
c. For holders of valid and existing mining lease contracts, operating agreements, Quarry Permits/licenses or unperfected
mining/quarry claims, the following are additional requirements to the above requirements, whenever applicable:
Certification from the Regional Office concerned that the mining/quarry claims are valid and subsisting; Appropriate environmental report on the rehabilitation of mined-out and/or mine waste/tailings-covered areas
and anti-pollution measures undertaken during the mining operations;
Environmental Compliance Certificate (ECC) for any new phase outside of the originally approved operation underthe mining project;
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
18/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 17 of36
Mining Project Feasibility Study (MGB Form No. 5-3): Provided, That a Mineral Agreement applicant with existingmining operation may submit, in lieu of the Mining Project Feasibility Study, a Project Description and a detailed
financial statement of its operations incorporating therein the social and environmental expenditures, taxes and
fees paid (MGB Form No. 5-3A); and
Approved survey plan of the mining area.Please note that any application with incomplete mandatory requirements shall not be accepted.
What are the other additional requirements after an MPSA application is filed?
The following additional requirements shall be submitted after the acceptance of the application but prior to the
issuance of the Mineral Agreement:
Environmental Compliance Certificate (ECC); Environmental Protection and Enhancement Program(MGB Form No. 16-2); Certificate of Environmental Management and Community Relations Record (CEMCRR)/Certificate of Exemption
and Approved survey plan;
Certification Precondition from the National Commission on Indigenous Peoples attesting that a. The proposed permit area does not overlap any ancestral land/domain claim in case of non-
Indigenous People (IP) area; or
b. The Free and Prior Informed Consent (FPIC) has been issued by the Indigenous CulturaCommunity (ICC)/IP concerned.
For OFFSHORE applications, the following additional requirements shall be submitted:
Name, port of registry, tonnage, type and class of survey vessel(s) or platform(s). If a foreign vessel is to be used,the expected date of first entry or appearance and final departure of the survey vessel shall be provided and the
necessary clearances obtained
A certification from the Coast and Geodetic Survey Department of NAMRIA that the proposed Exploration WorkProgram was duly registered to provide update in the publication of Notice to Mariners together with a list of
safety measures to be regularly undertaken to ensure the safety of navigation at sea and prevent accident
An agreement to:1. Properly identify all installations, vessels and other crafts involved in exploration recognizable to
all vessels within reasonable distance;
2. Notify the Bureau 30 calendar days prior to the intention to remove all scientific installations oequipment and apparatus; and
3. Allow the Bureaus authorized personnel, the Philippine Coast Guard and other authorizedpersons during reasonable hours to board the vessel(s) while within the Exclusive Economic
Zone.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
19/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 18 of36
Other supporting documents that may be required by the Mines and Geosciences Bureau.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
20/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 19 of36
MINERAL AGREEMENT PROCESS FLOWCHART
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
21/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 20 of36
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT (FTAA)
What is a financial or technical assistance agreement (FTAA)?
A Financial or Technical Assistance Agreement may be entered into between a Contractor and the Government fo
the large-scale exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other mineralsexcept for cement raw materials, marble, granite, sand and gravel and construction aggregates.
Who is qualified to apply for an FTAA?
The following Qualified Person may apply for an FTAA:
(a) Any Filipino citizen of legal age and with capacity to contract;(b) A Filipino-owned Corporation, Partnership, Association or Cooperative, at least sixty percent (60%) of the
capital is owned by Filipino citizens, organized or authorized for the purpose of engaging in mining with
technical and financial capability to undertake mineral resources development and duly registered in
accordance with the law; or
(c) A Foreign-owned Corporation, Partnership, Association or Cooperative duly registered in accordance with lawand in which less than fifty percent (50%) of the capital is owned by Filipino citizens.
How much area is granted for an FTAA?
The maximum FTAA contract areas20
that may be applied for or granted per Qualified Person in the entire Philippines are
the following:
a. One thousand (1,000) meridional blocks or approximately eighty-one thousand (81,000) hectares onshore,b. Four thousand (4,000) meridional blocks or approximately three hundred twenty-four thousand (324,000
hectares offshore or
c. Combination of one thousand (1,000) meridional blocks onshore and four thousand (4,000) meridional blocksoffshore.
What is the term of an FTAA?
An FTAA has a term of twenty-five (25) years from the date of its issuance, and renewable for another term not
exceeding twenty-five (25) years. The following are the phase of mining operations of an FTAA:
a. Exploration - up to two (2) years from date of FTAA execution, extendible for another two (2) years;b. Pre-feasibility study, if warranted - up to two (2) years from expiration of the exploration period;c. Feasibility study - up to two (2) years from the expiration of the exploration/prefeasibility study period or from
declaration of mining project feasibility; and
d. Development, construction and utilization - remaining years of FTAA.
20Section 34, Chapter 6, RA 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
22/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 21 of36
What are the mandatory requirements21 in the acceptance of an FTAA application?
An FTAA application shall be filed in the Mines and Geosciences Bureau (MGB)
Regional Office (RO) concerned, for mineral and non-mineral reservation areas, using the prescribed form (MGB Form No
07-1) through payment of the filing fee and submission of eight (8) sets of the FTAA proposal and five (5) sets of the
following:
a. Upon filing of the application, the following mandatory requirements Duly certified Certificate of Registration, Articles of Incorporation and By-Laws issued by the Securities and
Exchange Commission or authorized Government agency(ies) concerned, or Certification from the
Bureau/Regional Office concerned that the said documents are duly registered in that Office;
Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(sand boundaries in relation to major environmental features and other projects using a NAMRIA topographic map
in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer;
Two-year Exploration Work Program (MGB Form No. 5-4) duly prepared, signed and sealed by a licensed MiningEngineer or Geologist;
Proof of technical competence, including, among others, curricula vitae and track records in mining operations andenvironmental management of the technical personnel who shall undertake the activities in accordance with the
submitted Exploration Work Program;
Proof of financial capability to undertake the activities pursuant to the Exploration Work Program, such as latestaudited financial statement and, where applicable, Annual Report for the preceding year, credit line(s), bank
guarantee(s) and/or similar negotiable instruments; and
Affidavit of Undertaking pursuant to DMO No. 99-10, as amended, declaring:1. The list of applications he/she/it has filed and the Mining Permit(s)/Contract(s) granted to him/her/it
including the corresponding hectarage and location of the areas, disaggregated on a per province basis;
and
2. The list of other Applicant(s)/Contractor(s)/Permittee(s) in which more than seventy percent (70%) ofthe authorized capital stock is held by stockholders of the applicant, including the corresponding
hectarage, disaggregated on a per province basis.
Note: Any application with incomplete mandatory requirements shall not be accepted.
b. After the acceptance of the application but prior to the approval of the FTAA: Posting of financial guarantee/performance bond and letter of credit or other forms of negotiable instruments
from any Government-accredited bonding company or financial institution, in favor of the Government upon
notification by the Secretary, which shall be in any foreign currency negotiable with the Bangko Sentral ng Pilipinas
or in Philippine Peso in such amount equivalent to the expenditure obligations of the applicant for any year;
Certificate of Environmental Management and Community Relations Record (CEMCRR)/Certificate of Exemption;21
Primer on Application for Financial and Technical Assistance Agreement (http://www.mgb.gov.ph)
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
23/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 22 of36
Environmental Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A); Approved survey plan; Environmental Compliance Certificate (ECC); Environmental Protection and Enhancement Program(MGB Form No. 16-2); Social Development and Management Program;
For OFFSHORE applications, the following additional requirements shall be submitted:
Name, port of registry, tonnage, type and class of survey vessel(s) or platform(s) . If a foreign vessel is to be used,the expected date of first entry or appearance and final departure of the survey vessel shall be provided and the
necessary clearances obtained;
A certification from the Coast and Geodetic Survey Department of NAMRIA that the proposed Exploration WorkProgram was duly registered to provide update in the publication of Notice to Mariners together with a list ofsafety measures to regularly undertaken to ensure the safety of navigation at sea and prevent accident;
An agreement to:1. Properly identify all installations, vessels and other crafts involved in exploration recognizable to
all vessels within reasonable distance;
2. Notify the Bureau 30 calendar days prior to the intention to remove all scientific installations oequipment and apparatus; and
3. Allow the Bureaus authorized personnel, the Philippine Coast Guard and other authorizedpersons during reasonable hours to board the vessel(s) while within the Exclusive Economic
Zone.
Certification Precondition from the National Commission on Indigenous Peoples attesting that a. The proposed permit area does not overlap any ancestral land/domain claim in case of non-
Indigenous People (IP) area; or
b. The Free and Prior Informed Consent (FPIC) has been issued by the Indigenous CulturaCommunity (ICC)/IP concerned.
Other supporting documents that may be required by the Mines and Geosciences Bureau.c. After the approval of the FTAA but prior to registration - An authorized capital of at least Four Million U.S. Dollars(US$4,000,000.00) or its Philippine Peso equivalent; andd. In support of the application for approval of the declaration of mining project feasibility
Mining Project Feasibility Study; Three (3)-Year Development/Utilization Work Program;
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
24/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 23 of36
Proof of technical competence, including, among others, curricula vitae and track records in mining operations andenvironmental management of the technical personnel who shall undertake the activities in accordance with the
submitted Development/Utilization Work Program; and;
Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program,such as latest audited financial statement and where applicable, Annual Report for the preceding year, creditline(s), bank guarantee(s) and/or similar negotiable instruments.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
25/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 24 of36
FTAA PROCESS FLOWCHART
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
26/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 25 of36
QUARRYING RESOURCES
What are quarrying resources?
Quarrying resources are any common rock or other mineral substances as the Director of Mines and Geosciences
Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand
diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone, marble, marl, red burning clays for potteries
and bricks, rhyolite, rock phosphate, sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic glass: Provided, that
such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically
workable quantities: Provided, further, That non-metallic minerals such as kaolin, feldspar, bull quartz, quartz or silica, sand
and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious
stones, and other non-metallic minerals that may later be discovered and which the Director declares the same to be of
economically workable quantities, shall not be classified under the category of quarry resources22
.
What is a Quarrying Permit?
A quarry permit is a document granted to a qualified person for the extraction and utilization of quarry resources
on public or private lands23
.
Who is qualified to apply for a Quarrying Permit?
Any qualified person may apply.
22Section 3(at) Chapter 1, RA 7942
23Section 3(as) Chapter 1, RA 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
27/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 26 of36
How much area is granted for a Quarrying Permit?
The maximum area which a qualified person may hold at any one time shall be five hectares (5 has).
A large-scale quarry operation, including a sand and gravel operation, during the
development/construction/operating period under the mineral agreement, shall involve a mechanized operation and a fina
mining area not exceeding the following:
a. For sand and gravel Individual Twenty (20) hectares Corporation/ Partnership/ Association/Cooperative Fifty (50) hectares
b. For marble, granite, and/or construction aggregates Individual Eighty-one (81) hectares Corporation/ Partnership/ Association/Cooperative Two-hundred forty-three (243) hectares
c. For cement raw materials such as limestone, shale and silica Individual Four-hundred eighty-six (486) hectares Corporation/ Partnership/ Association/Cooperative One thousand four hundred fifty-eight (1,458
hectares
What is the term of a Quarrying Permit?
A quarry permit shall have a term of five (5) years, renewable for like periods but not to exceed a total term otwenty-five (25) years.
* No quarry permit shall be issued or granted on any area covered by a mineral agreement, or financial or
technical assistance agreement.
TRANSPORT, SALE, AND PROCESSING OF MINERALS ORE TRANSPORT PERMIT
A permit specifying the origin and quantity of non-processed mineral ores or minerals shall be required fortheir transport.
The mines regional director, who has jurisdiction over the area where the ores were extracted, has theauthority to issue transport permits.
The Provincial Mining Regulatory Board concerned shall formulate their own policies to govern such transportof ores produced by small-scale miners, in the case of mineral ores or minerals being transported from the
small-scale mining acres to the custom mills or processing plants.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
28/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 27 of36
The absence of a permit shall be aprima facie evidence of illegal mining and shall be sufficient cause for thegovernment to confiscate the ores or minerals being transported, the tools, and equipment utilized, and the
vehicle containing the same.
Ore samples not exceeding two metric tons to be used exclusively for assay or pilot test purposes shall beexempted from such requirement.
24
MINERAL TRADING REGISTRATION
No person shall engage in the trading of mineral products, either locally or internationally, unless registered with
the Department of Trade and Industry and accredited by the Department, with a copy of said registration submitted to the
Bureau.25
MINERALS PROCESSING PERMIT
No person shall engage in the processing of minerals without first securing a minerals processing permit fromthe Secretary,
Minerals processing permit shall be for a period of five (5) years renewable for same periods but not to exceeda total term of twenty-five (25) years.
A foreign-owned or controlled corporation may be granted a mineral processing permit.26SAFETY AND ENVIRONMENTAL PROTECTION
All contractors and permittees shall strictly comply with all the mines safety rules and regulations concerning thesafe and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development
9
Mine Labour: No person under 16 years of age shall be employed in any phase of mining operations and no personunder 18 years of age shall be employed underground in a mine
27
Powers of the Regional Director:4. Conduct mines inspection5. Issue orders requiring the contractor to remedy any practice connected with mining or
quarrying operations which is not in accordance with safety and anti-pollution laws and
regulations
6. Power to summarily suspend the mining or quarrying operations in case of imminentdanger to life or property
28
24Sec. 53, RA No. 7942
25Sec. 54, RA No. 7942
26Sec. 55, RA No. 7942
27Sec. 64, RA No. 7942
28Sec. 67, RA No. 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
29/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 28 of36
Every contractor shall undertake an environmental protection and enhancement program covering the period ofthe mineral agreement or permit. Such environmental program shall be incorporated in the work program which
the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement
or permit.
Contents of the Work Program
3. plans relative to mining operations4. rehabilitation, regeneration, revegetation and reforestation of mineralized
areas
5. slope stabilization of mined-out and tailings covered areas, aquaculture,watershed development and water conservation; and,
6. socioeconomic development Need to procure an ECC, after submission of an EIA, except during the exploration period of a mineral agreement
or FTAA
Requirement of rehabilitation. AUXILIARY MINING RIGHTS
the grant of auxiliary mining rights is merely incidental or necessary for the mining operation of a contractor. Itis, however, subject to forestry and water laws, rules and regulations. Under RA 7942 such auxiliary mining
rights are timber and water rights.
Timber rights A contractor may be granted a right to cut trees or timber within his mining area as may be necessary for his
mining operations subject to forestry laws, rules and regulations. The mines regional director has the authority
to determine the volume of the timber needed and the manner of cutting and removal thereof if in an
instance where the land covered by the mining area is already covered by existing timber concessions. Such
authority vested with the mines regional director should be coupled with consultation with the contractor, the
timber concessionaire/permittee and the Forest Management of the Bureau of the Department. Furthermore,
when disagreement arises between the contractor and the timber concessionaire, the matter shall be
submitted to the Secretary whose decision shall be final. The contractor shall perform reforestation work
within his mining area in accordance with forestry laws, rules and regulations.29
Water rights
A contractor shall be granted water rights for mining operations upon approval of the application thereof withthe appropriate government agency in accordance with existing water laws, rules, and regulations. Those
water rights which were already granted or vested through long use, recognized and acknowledge by local
customs, laws, and decisions f courts shall not be impaired. The Government reserves the right to regulate
29Sec. 72, RA No. 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
30/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 29 of36
water rights and the reasonable and equitable distribution of water supply so as to prevent the monopoly of
the use thereof.30
Right to possess explosives A contractor or exploration permittee shall have the right to possess and use explosives within his contract or
permit area as maybe necessary for his mining operations upon approval of the application thereof with the
appropriate government agency. The Government reserves the right to regulate and control the explosive
accessories to ensure safe mining operations.31
Easement rights When mining areas are so situated that for purposes of more convenient mining operations it is necessary to
build, construct or install on the mining area or lands owned, occupied or leased by other persons, such as
infrastructure as roads, railroads, mills, waste dump sites, tailing ponds, warehouses, staging or storage areas
and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and
their normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines,
flumes, cuts, shafts, tunnels, or mills, the contractor upon payment of just compensation shall be entitled to
enter and occupy said mining areas or lands.32
Entry into Private Lands and Concession Areas Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and
concession areas by surface owners, occupant, or concessionaires when conducting mining operations therein
Any damage done to the property of the surface owner, occupant, or concessionaire as a consequence of such
operations shall be properly compensated as may be provided for in the implementing rules and regulations.
In order to guarantee such compensation, the person authorized to conduct mining operation shall, prior
thereto, post a bond with the regional director based on the type of properties, the prevailing prices in and
around the area where the mining operations are to be conducted, with surety satisfactory to the regional
directors.33
I. Government Share
a. Government Share in Mineral Production Sharing Agreement
The total government share in a mineral production sharing agreement shall be the excise tax on
mineral products as provided in Republic Act No. 7729, amending Section 151(a) of the National Internal
Revenue Code, as amended.
b. Government Share in Other Mineral Agreements
The share of the government in co-production and joint-venture agreements shall be negotiated
by the government and the contractor taking into consideration the following:
30Sec. 73, RA No. 7942
31Sec. 74, RA No. 7942
32Sec. 75, RA No. 7942
33Sec. 76, RA No. 7942
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
31/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 30 of36
i. Capital investment of the project;ii. Risks involved;iii. Contribution of the project to the economy; andiv. Other factors that will provide for a fair and equitable sharing between the government
and the contractor.
The government shall also be entitled to compensations for its other contributions which shall be
agreed uponby the parties, and shall consist, among other things, the contractor's foreign stockholders
arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national,
and all such other taxes, duties and fees as provided for under existing laws.
The Government shares in financial or technical assistance agreement shall consist of, among
other things, the contractor's corporate income tax, excise tax, special allowance, withholding tax due
from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign
stockholder in case of a foreign nation al and all such other taxes, duties and fees as provided for under
existing laws.
The collection of Government share in financial or technical assistance agreement shall
commence after the financial or technical assistance agreement contractor has fully recovered its pre-
operating expenses, exploration, and development expenditures, inclusive.
II. Incentives
a. Fiscal and Non-Fiscal Incentives
The contractors in Mineral Agreements and FTAAs shall be entitled to the applicable fiscal and
non-fiscal incentives as provided for under Executive Order No. 226, otherwise known as the Omnibus
Investments Code of 1987, provided that, holders of exploration permits may register with the Board of
Investments and be entitled to the fiscal incentives granted under the said Code for the duration of the
permits or extensions thereof. Provided, further, that mining activities shall always be included in the
investment priorities plan.
b. Incentives for Pollution Control Devices
Pollution control devices acquired, constructed or installed by contractors shall not be
considered as improvements on the land or building where they are placed, and shall not be subject to
real property and other taxes or assessments, provided however that, payment of mine wastes and
tailings fees is not exempted.
c. Investment Guarantees
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
32/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 31 of36
The contractor shall be entitled to the basic rights and guarantees provided in the Constitution
and such other rights recognised by the government as enumerated hereunder:
i. Repatriation of investments - The right to repatriate the entire proceeds of theliquidation of the foreign investment in the currency in which the investment was
originally made and at the exchange rate prevailing at the time of repatriation.
ii. Remittance of earnings - The right to remit earnings from the investment in the currencyin which the foreign investment was originally made and at the exchange rate prevailing
at the time of remittance.
iii. Foreign loans and contracts - The right to remit at the exchange rate prevailing at thetime of remittance such sums as may be necessary to meet the payments of interest
and principal on foreign loans and foreign obligations arising from financial or technical
assistance contracts.
iv.
Freedom from expropriation - The right to be free from expropriation by theGovernment of the property represented by investments or loans, or of the property of
the enterprise except for public use or in the interest of national welfare or defense and
upon payment of just compensation. In such cases, foreign investors or enterprises shall
have the right to remit sums received as compensation for the expropriated property in
the currency in which the investment was originally made and at the exchange rate
prevailing at the time of remittance.
v. Confidentiality - Any confidential information supplied by the contractor pursuant tothis Act and its implementing rules and regulations shall be treated as such by the
Department and the Government, and during the term of the project to which it relates.
III. Grounds for Cancellation, Revocation and Termination
a. Late or non-filing of requirements
Failure of the permittee or contractor to comply with any of the requirements provided in this RA
7941 or in its implementing rules and regulations, without a valid reason, shall be sufficient ground from
the suspension of any permit or agreement provided under this RA 7942.
b. Violation of the terms and conditions of permits or agreements
Violations of the terms and conditions of the permits or agreements shall be a sufficient ground
for cancellation of the same.
c. Non-payment of taxes and fees
Failure to pay the taxes and fees due the Government for two (2) consecutive years shall cause
the cancellation of the exploration permit, mineral agreement, financial or technical assistance agreement
and other agreements and the re-opening of the area subject thereof to new applicants.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
33/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 32 of36
d. Suspension or Cancellation of Tax Incentives and Credits
Failure to abide by the terms and conditions of tax incentives and credits shall cause the
suspension or cancellation of said incentives and credits.
e. Falsehood or Omission of Facts in the Statement
All statements made in the exploration permit, mining agreement and financial or technical
assistance shall be considered as conditions and essential parts thereof and any falsehood in said
statements or omission of facts therein which may alter, change or affect substantially the facts set forth
in said statements may cause the revocation and termination of the exploration permit, mining
agreement and financial or technical assistance agreement.
IV. Settlement of Conflicts
a. Panel of Arbitrators
There shall be a panel of arbitrators in the regional office of the DENR composed of three (3)
members, two (2) of whom must be members of the Philippine Bar in good standing and one a licensed
mining engineer or a professional in a related field, and duly designated by the Secretary of the DENR as
recommended by the MGB Director. Those designated as members of the panel shall serve as such in
addition to their work in the DENR without receiving any additional compensation. As much as
practicable, said members shall come from the different bureaus of the DENR in the region. The presiding
officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly
basis. The members of the panel shall perform their duties and obligations in hearing and deciding cases
until their designation is withdrawn or revoked by the Secretary. Within thirty (30) working days, after
the submission of the case by the parties for decision, the panel shall have exclusive and original
jurisdiction to hear and decide on the following:
i. Disputes involving rights to mining areas;ii. Disputes involving mineral agreements or permits;iii. Disputes involving surface owners, occupants and claimholders/concessionaires; andiv. Disputes pending before the MAB and the DENR at the date of the effectivity of RA 7942
1. Mining Dispute
The settlement of conflicts referred in the provisions in RA 7942 involves rights to
mining areas, mineral agreements, FTAAs, or permits, and those involving surface owners,
occupants and claim-holders/concessionaires. The panel of arbitrators has exclusive and
original jurisdiction to hear and decide on aforementioned disputes. However, the panels
jurisdiction is limited only to mining disputes which raise a question of fact or matters
requiring the application of technological knowledge and experience.
2. Appellate Jurisdiction
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
34/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 33 of36
The decision or order of the panel of arbitrators may be appealed by the party not
satisfied thereto to the Mines Adjudication Board within fifteen (15) days from receipt
thereof which must decide the case within thirty (30) days from submission thereof for
decision.
b. Mines Adjudication Board (MAB)
The MAB shall be composed of three (3) members. The Secretary of the DENR shall be the
chairman with the Director of MGB and the Undersecretary for Operations of the DENR as members
thereof. The Board shall have the following powers and functions:
i. To promulgate rules and regulations governing the hearing and disposition of cases before it, aswell as those pertaining to its internal functions, and such rules and regulations as may be
necessary to carry out its functions;
ii. To administer oaths, summon the parties to a controversy, issue subpoenas requiring theattendance and testimony of witnesses or the production of such books, papers, contracts,records, statement of accounts, agreements, and other documents as may be material to a just
determination of the matter under investigation, and to testify in any investigation or hearing
conducted in pursuance of this RA 7942;
iii. To conduct hearings on all matters within its jurisdiction, proceed to hear and determine thedisputes in the absence of any party thereto who has been summoned or served with notice to
appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings at
any time and place, refer technical matters or accounts to an expert and to accept his report as
evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded
from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in
substance or in form, give all such directions as it may deem necessary or expedient in the
determination of the dispute before it, and dismiss the mining dispute as part thereof, where it is
trivial or where further proceedings by the Board are not necessary or desirable:
1. To hold any person in contempt, directly or indirectly, and imposeappropriate penalties therefor; and
2. To enjoin any or all acts involving or arising from any case pendingbefore it which, if not restrained forthwith, may cause grave or
irreparable damage to any of the parties to the case or seriously affect
social and economic stability.
In any proceeding before the Board, the rules of evidence prevailing in courts of law or equityshall not be controlling and it is the spirit and intention of this Act that shall govern. The MAB shall use all
reasonable means to ascertain the facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process. In any proceeding before the MAB,
the parties may be represented by legal counsel. The findings of fact of the MAB shall be conclusive and
binding on the parties and its decision or order shall be final and executory.
A petition for review by certiorari and question of law may be filed by the aggrieved party with
the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
35/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 34 of36
1. Adjudication of Mining Cases an Administrative Matter
The Supreme Court has recognised a distinction between the primary powers
granted by pertinent provisions of law of an executive or administrative nature, such as
granting of license, permits, lease, or approving, rejecting, reinstating or cancelling
applications, or deciding conflicting applications and controversies or disagreements of civil
or contractual nature between litigants which are questions of a judicial nature that may be
adjudicated only by courts of justice. Hence, findings of fact by the MAB, which exercises
appellate jurisdiction over decisions or orders of the panel of arbitrators, shall be conclusive
and binding on parties, and its decision or order shall be final and executor. However, resort
to the appropriate court, through a petition for review by certiorari, involving questions of
law may be made within thirty (30) days from receipt of the order or decision of the MAB.
2. MAB has no Jurisdiction Over Pollution Cases
The scope of the authority of the panel of arbitrators and the MAB conferred by RA
No. 7942 clearly excludes adjudicative responsibility over pollution cases. They have no
authority to adjudicate cases involving violations of pollution laws and regulations in general
3. MAB Decisions are Appealable to the Court of Appeals
MAB, being a quasi-judicial body, its decisions should be appealed before the Court
of Appeals under Rule 43 of the Rules of Court notwithstanding the provision in Section 79 of
RA 7942 that petition for review can be brought directly to the Supreme Court. The
hierarchy of courts must be followed.
4. DENR is Devoid of Jurisdiction to Determine the Validity of Mining Contracts or
Disputes
A mining dispute is within the jurisdiction of the DENR, and authority to exercise its
technical knowledge or expertise over any mining operations dispute. However, it is devoid
of jurisdiction where the issue involves the validity of mining contracts as such is a judicial
question.. a judicial question is raised when determination of the question involves exercise
of a judicial function. The question involves the determination of what law and what legal
rights of the parties are applicable in relation to the controversy.
V. Penal Provisions
a. False Statements
Any person who knowingly presents any false application, declaration, or evidence to the
Government or publishes or causes to be published any prospectus or other information containing any
false statement relating to mines, mining operations or mineral agreements, financial or technical
assistance agreements and permits shall, upon conviction, be penalized by a fine of not exceeding Ten
Thousand Pesos (10,000.00).
7/29/2019 Philippine Mining Act of 1995 -Report Consolidated
36/37
Philippine Mining Act of 1995 (Republic Act No. 7942)
Page 35 of36
b. Illegal Exploration
Any person undertaking exploration work without the necessary exploration permit
shall, upon conviction, be penalized by a fine of not exceeding Fifty thousand pesos (50,000.00
c. Theft of Minerals
Any person e