Republic of the Philippines
Congress of the Philippines
Republic Act No. 7942
AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,
DEVELOPMENT, UTILIZATION AND CONSERVATION
CHAPTER I
Section 1. Title.
- This act shall be known as the
Philippine Mining Act of 1995.
Section 2. Declaration of Policy. -
All mineral resources in public and private lands within the territory
and exclusive economic zone of the Republic of the Philippines are owned by the
State. It shall be the responsibility
of the State to promote their rational exploration, development, utilization
and conservation through the combined efforts of government and the private
sector in order to enhance national growth in a way that effectively safeguards
the environment and protect the rights of affected communities.
Section 3. Definition of Terms. - As used in and for
purposes of this Act, the following terms, whether in singular or plural, shall
mean:
(a) "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 time immemorial, and as may be defined
and delineated by law.
(b) "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).
(c) "Bureau" means the Mines and Geosciences Bureau under
the Department of Environment and Natural Resources.
(d) "Carrying
capacity" refers to the capacity
of natural and human environments to accommodate and absorb change without
experiencing conditions of instability and attendant degradation.
(e) "Contiguous
zone" refers to water, sea bottom
and substratum measured twenty-four nautical miles (24 n.m.) seaward from the
base line of the Philippine archipelago.
(f) "Contract
area" means land or body of water
delineated for purposes of exploration, development, or utilization of the
minerals found therein.
(g) "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.
(h)
"Co-production agreement
(CA)" means an agreement
entered into between the Government and
one or more contractors in accordance with Section 26(b) hereof.
(I) "Department" means the Department of Environment and
Natural Resources.
(j) "Development" means the work undertaken to explore and
prepare an ore body or a mineral deposit for mining, including the construction
of necessary infrastructure and related facilities.
(k) "Director" means the Director of the Mines and
Geosciences Bureau.
(l) "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.
(m) "Environmental
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.
(n) "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.
(o) "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.
(p) "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.
(q) "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.
( r ) "Financial
or technical assistance agreement"
means a contract involving financial or technical assistance for
large-scale exploration, development, and utilization of mineral
resources.
(s) "Force
majeure" means acts or
circumstances beyond the reasonable control of contractor including, but not
limited to, war, rebellion, insurrection, riots, civil disturbance, blockade,
sabotage, embargo, strike, lockout, any dispute with surface owners and other
labor disputes, epidemic, earthquake, storm, flood or other adverse weather
conditions, explosion, fire, adverse action by government or by any
instrumentality or subdivision thereof, act of God or any public enemy and any
cause that herein describe over which the affected party has no reasonable
control.
(t) "Foreign-owned
corporation" means any
corporation, partnerships, 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.
(u) "Government" means the government of the Republic of the
Philippines.
(v) "Gross
output" means the actual market
value of minerals or mineral products from its mining area as defined in the
National Internal Revenue Code.
(w) "Indigenous
cultural community" means a group
or tribe or 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.
(x) "Joint
venture agreement (JV)" means an
agreement entered into between the Government and one or more contractors in
accordance with Section 26(c) hereof.
(y) "Mineral
processing" means the milling,
beneficiation or upgrading of ores or minerals and rocks or by similar means to
convert the same into marketable products.
(z) "Mine
wastes and tailings" shall mean
soil and rock materials from surface or underground mining and milling
operations with no economic value to the generator of the same.
(aa) "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.
(ab) "Mineral
agreement" means a contract
between the government and a contractor, involving mineral production-sharing
agreement, co-production agreement, or joint-venture agreement.
(ac) "Mineral
land" means any area where mineral
resources are found.
(ad) "Mineral
Resource" means any concentration
of minerals/rocks with potential economic value.
(ae) "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.
(af) "Mining
operation" means mining activities
involving exploration, feasibility, development, utilization, and processing.
(ag) "Nongovernmental
organization (NGO)" includes
nonstock, nonprofit organizations involved in activities dealing with resource
and environmental conservation, management and protection.
(ah) "Net
assets" refers to the property,
plant and equipment as reflected in the audited financial statement of the
contractor net of depreciation, as computed for tax purposes, excluding
appraisal increase and construction in progress.
(ai) "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.
(aj) "Onshore" means the landward side from the mean tide
elevation, including submerged lands in lakes, rivers and creeks.
(ak) "Ore" means a naturally occurring substance or
material from which a mineral or element can be mined and/or processed for profit.
(al) "Permittee" means the holder of an exploration permit.
(am) "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 industrial waste and tailings as well as eliminating or
reducing hazardous effects of solid particles, chemicals, liquids or other
harmful byproducts and gases emitted from any facility utilized in mining
operations for their disposal.
(an) "President" means the President of the Republic of the
Philippines.
(ao) "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.
(ap) "Public
land" refers to lands of the
public domain which have been classified as agricultural lands and subject to
management and disposition or concession under existing laws.
(aq) "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 centum (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.
(ar) "Quarrying"
means the process of extracting, removing and disposing quarry resources found
on or underneath the surface of private or public land.
(as) "Quarry
permit" means a document granted
to a qualified person for the extraction and utilization of quarry resources on
public or private lands.
(at) "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, 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 resources.
(au) "Regional
director" means the regional
director of any mines regional office under the Department of Environment and
Natural Resources.
(av) "Regional
office" means any of the mines
regional offices of the Department of Environment and Natural Resources.
(aw) "Secretary" means the Secretary of the Department of
Environment and Natural Resources.
(ax) "Special
allowance" refers to payment to
the claim-owners or surface right-owners particularly during the transition
period from Presidential Decree No. 463 and Executive Order No. 279, series of
1987.
(ay) "State" means the Republic of the Philippines.
(az) "Utilization" means the extraction or disposition of
minerals.
CHAPTER II
GOVERNMENT MANAGEMENT
Section 4. Ownership of Mineral Resources. -
Mineral resources are owned by the State and the exploration,
development, utilization, and processing thereof shall be under its full
control and supervision. The State may
directly undertake such activities or it may enter into mineral agreements with
contractors.
The State
shall recognize and protect the rights of the indigenous cultural communities
to their ancestral lands as provided for by the Constitution.
Section 5. Mineral Reservations. -
When the national interest so requires, such as when there is a need to
preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or ecological value,
the President may establish mineral reservations upon the recommendation of the
Director through the Secretary. Mining
operations in existing mineral reservations and such other reservations as may
thereafter be established, shall be undertaken by the Department or through a
contractor: Provided, That a small scale-mining cooperative
covered by Republic Act No. 7076 shall be given preferential right to apply for
a small-scale mining agreement for a maximum aggregate area of twenty-five
percent (25%) of such mineral reservation, subject to valid existing
mining/quarrying rights as provided under Section 112 Chapter XX hereof. All submerged lands within the contiguous
zone and in the exclusive economic zone of the Philippines are hereby declared
to be mineral reservations.
A ten per
centum (10%) share of all royalties and revenues to be derived by the
government from the development and utilization of the mineral resources within
mineral reservations as provided under this Act shall accrue to the Mines and
Geosciences Bureau to be allotted for special projects and other administrative
expenses related to the exploration and development of other mineral
reservations mentioned in Section 6 hereof.
Section 6. Other Reservations. - Mining operations in
reserved lands other than mineral reservations may be undertaken by the
Department, subject to limitations as herein provided. In the event that the Department cannot
undertake such activities, they may be undertaken by a qualified person in
accordance with the rules and regulations promulgated by the Secretary. The right to develop and utilize the
minerals found therein shall be awarded by the President under such terms and
conditions as recommended by the Director and approved by the Secretary:
Provided, That the party who undertook the exploration of said reservation
shall be given priority. The mineral
land so awarded shall be automatically excluded from the reservation during the
term of the agreement: Provided,
further, That the right of the lessee of a valid mining contract existing
within the reservation at the time of its establishment shall not be prejudiced
or impaired.
Section 7. Periodic Reviews of Existing Mineral
Reservations. - The Secretary shall periodically review
existing mineral reservations for the purpose of determining whether their
continued existence is consistent with the national interest, and upon his
recommendation, the President may, by proclamation, alter or modify the
boundaries thereof or revert the same to the public domain without prejudice to
prior existing rights.
Section 8. Authority of the Department. - The
Department shall be the primary agency responsible for the conservation,
management, development, and proper use of the State's mineral resources
including those in reservations, watershed areas, and lands of the public
domain. The Secretary shall have the
authority to enter into mineral agreements on behalf of the Government upon the
recommendation of the Director, promulgate such rules and regulations as may be
necessary to implement the intent and provisions of this Act.
Section 9. Authority of the Bureau. -
The Bureau shall have direct
charge in the administration and disposition of mineral lands and mineral
resources and shall undertake geological, mining, metallurgical, chemical, and
other researches as well as geological and mineral exploration surveys. The Director shall recommend to the
Secretary the granting of mineral agreements to duly qualified persons and
shall monitor the compliance by the contractor of the terms and conditions of
the mineral agreements. The Bureau may
confiscate surety, performance and guaranty bonds posted through an order to be
promulgated by the Director. The
Director may deputize, when necessary, any member or unit of the Philippine
National Police, barangay, duly registered nongovernmental organization (NGO) or
any qualified person to police all mining activities.
Section 10. Regional Offices. -
There shall be as many regional offices in the country as may be
established by the Secretary, upon the recommendation of the Director.
Section 11. Processing of Applications. -
The system of processing applications for mining rights shall be
prescribed in the rules and regulations of this Act.
Section 12. Survey, Charting and Delineation of
Mining Areas. - A sketch plan or map of the contract or
mining area prepared by a deputized geodetic engineer suitable for publication
purposes shall be required during the filing of a mineral agreement or
financial or technical assistance agreement application. Thereafter, the contract or mining area
shall be surveyed and monumented by a deputized geodetic engineer and the
survey plan shall be approved by the Director before the approval of the mining
feasibility.
Section 13. Meridional Blocks. -
For purposes of the delineation of the contract or mining areas under this
Act, the Philippine territory and its exclusive economic zone shall be divided
into meridional blocks of one-half (1/2) minute of latitude and one-half (1/2)
minute of longitude.
Section 14. Recording System. -
There shall be established a national and regional filing and recording
system. A mineral resource database
system shall be set up in the Bureau which shall include, among others, a
mineral rights management system. The
Bureau shall publish at least annually, a mineral gazette of nationwide
circulation containing among others, a current list of mineral rights, their
locations in the map, mining rules and regulations, other official acts
affecting mining, and other information relevant to mineral resources
development. A system and publication
fund shall be included in the regular budget of the Bureau.
CHAPTER III
SCOPE OF APPLICATION
Section 15. Scope of Application. -
This Act shall govern the exploration, development, utilization and
processing of all mineral resources.
Section 16. Opening of Ancestral Lands for Mining
Operations. - No ancestral land shall be opened for mining operations without
the prior consent of the indigenous cultural community concerned.
Section 17. Royalty Payments for Indigenous
Cultural Communities. - In the event of an agreement with an
indigenous cultural community pursuant to the preceding section, the royalty
payment, upon utilization of the minerals shall be agreed upon by the parties. The said royalty shall form part of a trust
fund for the socioeconomic well-being of the indigenous cultural community.
Section 18. Areas Open to Mining Operations. -
Subject to any existing rights or reservations and prior agreements of
all parties, all mineral resources in public or private lands, including timber
or forestlands as defined in existing laws, shall be open to mineral agreements
or financial or technical assistance agreement applications. Any conflict that may arise under this
provision shall be heard and resolved by the panel of arbitrators.
Section 19. Areas Closed to Mining
Applications. - Mineral agreement or financial or technical
assistance agreement applications shall not be allowed:
(a) In
military and other government reservations, except upon prior written clearance
by the government agency concerned;
(b) Near
or under public or private buildings, cemeteries, archeological and historic
sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure
projects, public or private works including plantations or valuable crops,
except upon written consent of the government agency or private entity
concerned;
(c) In
areas covered by valid and existing mining rights;
(d) In
areas expressly prohibited by law;
(e) In
areas covered by small-scale miners as defined by law unless with prior consent
of the small-scale miners, in which case a royalty payment upon the utilization
of minerals shall be agreed upon by the parties, said royalty forming a trust
fund for the socioeconomic development of the community concerned; and
(f) 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 sanctuaries as defined by law
and in areas expressly prohibited under the National Integrated Protected Area
System (NIPAS) under Republic Act No. 7586, Department Administrative Order No.
25, series of 1992 and other laws.
CHAPTER IV
EXPLORATION PERMIT
Section 20. Exploration Permit. -
An exploration permit grants the right to conduct exploration for all
minerals in specified areas. The Bureau
shall have the authority to grant an exploration permit to a qualified person.
Section 21. Terms and Conditions of the
Exploration Permit. - An exploration permit shall be for a period
of two (2) years, subject to annual review and relinquishment or renewal upon
the recommendation of the Director.
Section 22. Maximum Areas for Exploration
Permit. The maximum area that a
qualified person may hold at any one time shall be:
(a) Onshore, in any one province -
(1) For individuals, twenty (20) blocks; and
(2) For partnerships, corporations, cooperatives, or associations,
two hundred (200) blocks.
(b) Onshore, in the entire Philippines -
(1) For individuals, forty (40) blocks; and
(2) For partnerships, corporations, cooperatives, or associations,
four hundred (400) blocks.
(c) Offshore,
beyond five hundred meters (500m) from the mean low tide level -
(1) For individuals, one hundred (100) blocks; and
(2) For partnerships, corporations, cooperatives, or associations,
one thousand (1,000) blocks.
Section 23. Rights and Obligations of the
Permittee. - An exploration permit shall grant to the permittee, his heirs or
successors-in-interest, the right to enter, occupy and explore the area: Provided, That 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.
Any
expenditure in excess of the yearly budget of the approved work program may be
carried forward and credited to the succeeding years covering the duration of
the permit. The Secretary, through the
Director, shall promulgate rules and regulations governing the terms and
conditions of the permit.
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 such
agreement: Provided, That 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.
Section 24. Declaration of Mining Project
Feasibility. - A holder of an exploration permit who
determines the commercial viability of a project covering a mining area may,
within the term of the permit, file with the Bureau a declaration of mining
project feasibility accompanied by a work program for development. The approval of the mining project
feasibility and compliance with other requirements provided in this Act shall
entitle the holder to an exclusive right to a mineral production sharing
agreement or other mineral agreements or financial or technical assistance
agreement.
Section 25. Transfer or Assignment. - An
exploration permit may be transferred or assigned to a qualified person subject
to the approval of the Secretary upon the recommendation of the Director.
CHAPTER V
MINERAL AGREEMENTS
Section 26. Modes of Mineral Agreement. -
For purposes of mining operations, a mineral agreement may take the
following forms as herein defined:
(a) Mineral
production sharing agreement - is an agreement where the Government grants to
the contractor the exclusive right to conduct mining operations within a
contract area and shares in the gross output.
The contractor shall provide the financing, technology, management and
personnel necessary for the implementation of this agreement.
(b) Co-production
agreement - is an agreement between the Government and the contractor wherein
the Government shall provide inputs to the mining operations other than the
mineral resource.
(c) Joint-venture
agreement - is an agreement where a joint-venture company is organized by the
Government and the contractor with both parties having equity shares. Aside from earnings in equity, the
Government shall be entitled to a share in the gross output.
A mineral
agreement shall grant to the contractor the exclusive right to conduct mining
operations and to extract all mineral resources found in the contract
area. In addition, the contractor may
be allowed to convert his agreement into any of the modes of mineral agreements
or financial or technical assistance agreement covering the remaining period of
the original agreement subject to the approval of the Secretary.
Section 27. Eligibility. - A qualified person may
enter into any of the three (3) modes of mineral agreement with the government
for the exploration, development and utilization of mineral resources: Provided, That in case the applicant has
been in the mining industry for any length of time, he should possess a
satisfactory environmental track record as determined by the Mines and
Geosciences Bureau and in consultation with the Environmental Management Bureau
of the Department.
Section 28. Maximum Areas for Mineral
Agreement. - The maximum area that a qualified person may hold at any time
under a mineral agreement shall be:
(a) Onshore, in any one province -
(1) For individuals, ten (10) blocks; and
(2) For partnerships, cooperatives, associations,
or corporations,
one
hundred (100) blocks.
(b) Onshore, in the entire Philippines -
(1) For individuals, twenty (20) blocks; and
(2) For partnerships, cooperatives,
associations, or corporations,
two
hundred (200) blocks.
(c) Offshore, in the entire Philippines -
(1) For individuals, fifty (50) blocks;
(2) For partnerships, cooperatives,
associations, or corporations,
five
hundred (500) blocks; and
(3) For the exclusive economic zone, a larger area to be determined
by the Secretary.
The maximum
areas mentioned above that a contractor may hold under a mineral agreement
shall not include mining/quarry areas under operating agreements between the
contractor and a claimowner/lessee/permittee/licensee entered into under
Presidential Decree No. 463.
Section 29. Filing and Approval of Mineral
Agreements. - All proposed mineral agreements shall be filed in the region
where the areas of interest are located, except in mineral reservations which
shall be filed with the Bureau.
The filing of
a proposal for a mineral agreement shall give the proponent the prior right to
areas covered by the same. The proposed
mineral agreement will be approved by the Secretary and copies thereof shall be
submitted to the President. Thereafter,
the President shall provide a list to Congress of every approved mineral
agreement within thirty (30) days from its approval by the Secretary.
Section 30. Assignment/Transfer. -
Any assignment or transfer of rights and obligations under any mineral
agreement except a financial or technical assistance agreement shall be subject
to the prior approval of the Secretary.
Such assignment or transfer shall be deemed automatically approved if
not acted upon by the Secretary within thirty (30) working days from official
receipt thereof, unless patently unconstitutional or illegal.
Section 31. Withdrawal from Mineral
Agreements. - The contractor may, by giving due notice at any time during the
term of the agreement, apply for the cancellation of the mineral agreement due
to causes which, in the opinion of the contractor, make continued mining
operations no longer feasible or viable.
The Secretary shall consider the notice and issue its decision within a
period of thirty (30) days:
Provided, That the contractor
has met all its financial, fiscal and legal obligations.
Section 32. Terms. - Mineral agreements
shall have a term not exceeding twenty-five (25) years to start from the date
of execution thereof, and renewable for another term not exceeding twenty-five (25)
years under the same terms and conditions thereof, without prejudice to changes
mutually agreed upon by the parties.
After the renewal period, the operation of the mine may be undertaken by
the Government or through a contractor.
The contract for the operation of a mine shall be awarded to the highest
bidder in a public bidding after due publication of the notice thereof: Provided,
That the contractor shall have the right to equal the highest bid upon
reimbursement of all reasonable expenses of the highest bidder.
CHAPTER VI
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT
Section 33. Eligibility. - Any qualified person
with technical and financial capability to undertake large-scale exploration,
development, and utilization of mineral resources in the Philippines may enter
into a financial or technical assistance agreement directly with the Government
through the Department.
Section 34. Maximum Contract Area. -
The maximum contract area that may be granted per qualified person,
subject to relinquishment shall be:
(a) 1,000 meridional blocks onshore;
(b) 4,000 meridional blocks offshore; or
(c) Combinations
of (a) and (b) provided that it shall not exceed the maximum limits for onshore
and offshore areas.
Section 35. Terms and Conditions. -
The following terms, conditions, and warranties shall be incorporated in
the financial or technical assistance agreement, to wit:
(a) A
firm commitment in the form of a sworn statement, of an amount corresponding to
the expenditure obligation that will be invested in the contract area: Provided,
That such amount shall be subject to changes as may be provided for in
the rules and regulations of this Act;
(b) A
financial guarantee bond shall be posted in favor of the Government in an
amount equivalent to the expenditure obligation of the applicant for any year;
(c) Submission
of proof of technical competence, such as, but not limited to, its track record
in mineral resource exploration, development, and utilization; details of
technology to be employed in the proposed operation; and details of technical
personnel to undertake the operation;
(d) Representations
and warranties that the applicant has all the qualifications and none of the
disqualifications for entering into the agreement;
(e) Representation
and warranties that the contractor has or has access to all the financing,
managerial and technical expertise and, if circumstances demand, the technology
required to promptly and effectively carry out the objectives of the agreement
with the understanding to timely deploy these resources under its supervision
pursuant to the periodic work programs and related budgets, when proper,
providing an exploration period up to two (2) years, extendible for another two
(2) years but subject to annual review by the Secretary in accordance with the
implementing rules and regulations of this Act, and further, subject to the
relinquishment obligations;
(f) Representations
and warranties that, except for payments for disposition for its equity,
foreign investments in local enterprises which are qualified for repatriation,
and local supplier's credits and such other generally accepted and permissible
financial schemes for raising funds for valid business purposes, the contractor
shall not raise any form of financing from domestic sources of funds, whether
in Philippine or foreign currency, for conducting its mining operations for and
in the contract area;
(g) The
mining operations shall be conducted in accordance with the provisions of this
Act and its implementing rules and regulations;
(h) Work programs and minimum expenditures
commitments;
(I) Preferential
use of local goods and services to the maximum extent practicable;
(j) A
stipulation that the contractors are obligated to give preference to Filipinos
in all types of mining employment for which they are qualified and that
technology shall be transferred to the same;
(k) Requiring
the proponent to effectively use appropriate anti-pollution technology and
facilities to protect the environment and to restore or rehabilitate mined out
areas and other areas affected by mine tailings and other forms of pollution or
destruction;
(l) The
contractors shall furnish the Government records of geologic, accounting, and other
relevant data for its mining operations, and that book of accounts and records
shall be open for inspection by the government;
(m) Requiring
the proponent to dispose of the minerals and byproducts produced under a
financial or technical assistance agreement at the highest price and more
advantageous terms and conditions as provided for under the rules and
regulations of this Act;
(n) Provide
for consultation and arbitration with respect to the interpretation and
implementation of the terms and conditions of the agreements; and
(o) Such
other terms and conditions consistent with the Constitution and with this Act
as the Secretary may deem to be for the best interest of the State and the
welfare of the Filipino people.
Section 36. Negotiations. - A
financial or technical assistance agreement shall be negotiated by the
Department and executed and approved by the President. The President shall notify Congress of all
financial or technical assistance agreements within thirty (30) days from
execution and approval thereof.
Section 37. Filing and Evaluation of Financial or
Technical Assistance Agreement Proposals.
- All financial or technical
assistance agreement proposals shall be filed with the Bureau after payment of
the required processing fees. If the
proposal is found to be sufficient and meritorious in form and substance after
evaluation, it shall be recorded with the appropriate government agency to give
the proponent the prior right to the area covered by such proposal: Provided, That existing mineral agreements,
financial or technical assistance agreements and other mining rights are not
impaired or prejudiced thereby. The
Secretary shall recommend its approval to the President.
Section 38. Term of Financial or Technical
Assistance Agreement. - A financial or technical assistance
agreement shall have a term not exceeding twenty-five (25) years to start from
the execution thereof, renewable for not more than twenty-five (25) years under
such terms and conditions as may be provided by law.
Section 39. Option to Convert into a Mineral
Agreement. - The contractor has the option to convert the financial or
technical assistance agreement to a mineral agreement at any time during the
term of the agreement, if the economic viability of the contract area is found
to be inadequate to justify large-scale mining operations, after proper notice
to the Secretary as provided for under the implementing rules and
regulations: Provided, That the mineral
agreement shall only be for the remaining period of the original agreement.
In case of a
foreign contractor, it shall reduce its equity to forty percent (40%) in the
corporation, partnership, association, or cooperative. Upon compliance with this requirement by the
contractor, the Secretary shall approve the conversion and execute the mineral
production-sharing agreement.
Section 40. Assignment/Transfer. - A
financial or technical assistance agreement may be assigned or transferred, in
whole or in part, to a qualified person subject to the prior approval of the
President: Provided, That the President
shall notify Congress of every financial or technical assistance agreement
assigned or converted in accordance with this provision within thirty (30) days
from the date of the approval thereof.
Section 41. Withdrawal from Financial or Technical
Assistance Agreement. - The contractor shall manifest in writing to
the Secretary his intentions to withdraw from the agreement, if in his judgment
the mining project is no longer economically feasible, even after he has
exerted reasonable diligence to remedy the cause or the situation. The Secretary may accept the
withdrawal: Provided, That the
contractor has complied or satisfied all his financial, fiscal or legal
obligations.
CHAPTER VII
SMALL-SCALE MINING
Section 42. Small-scale Mining. -
Small-scale mining shall continue to be governed by Republic Act No.
7076 and other pertinent laws.
CHAPTER VIII
QUARRY RESOURCES
Section 43. Quarry Permit. - Any
qualified person may apply to the provincial/city mining regulatory board for a
quarry permit on privately-owned lands and/or public lands for building and
construction materials such as marble, basalt, andesite, conglomerate, tuff,
adobe, granite, gabbro, serpentine, inset filling materials, clay for ceramic
tiles and building bricks, pumice, perlite and other similar materials that are
extracted by quarrying from the ground.
The provincial governor shall grant the permit after the applicant has
complied with all the requirements as prescribed by the rules and regulations.
The maximum
area which a qualified person may hold at any one time shall be five hectares
(5 has): Provided, That in large-scale
quarry operations involving cement raw materials, marble, granite, sand and
gravel and construction aggregates, a qualified person and the government may
enter into a mineral agreement as defined herein.
A quarry
permit shall have a term of five (5) years, renewable for like periods but not
to exceed a total term of twenty-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.
Section 44. Quarry Fee and Taxes. - A
permittee shall, during the term of his permit, pay a quarry fee as provided
for under the implementing rules and regulations. The permittee shall also pay the excise tax as provided by
pertinent laws.
Section 45. Cancellation of Quarry Permit. - A
quarry permit may be canceled by the provincial governor for violations of the
provisions of this Act or its implementing rules and regulations or the terms
and conditions of said permit:
Provided, That before the cancellation
of such permit, the holder thereof shall be given the opportunity to be heard
in an investigation conducted for the purpose.
Section 46. Commercial Sand and Gravel
Permit. - Any qualified person may be granted a permit by the provincial
governor to extract and remove sand and gravel or other loose or unconsolidated
materials which are used in their natural state, without undergoing processing
from an area of not more than five hectares (5 has) and in such quantities as
may be specified in the permit.
Section 47. Industrial Sand and Gravel
Permit. - Any qualified person may be granted an industrial sand and gravel
permit by the Bureau for the extraction of sand and gravel and other loose or
unconsolidated materials that necessitate the use of mechanical processing
covering an area of more than five hectares (5 has.) at any one time. The permit shall have a term of five (5)
years, renewable for a like period but not to exceed a total term of
twenty-five (25) years.
Section 48. Exclusive Sand and Gravel Permit. -
Any qualified person may be granted an exclusive sand and gravel permit
by the provincial governor to quarry and utilize sand and gravel or other loose
or unconsolidated materials from public lands for his use, provided that there
will be no commercial disposition thereof.
A mineral
agreement or a financial technical assistance agreement contractor shall,
however, have the right to extract and remove sand and gravel and other loose
unconsolidated materials without need of a permit within the area covered by
the mining agreement for the exclusive use in the mining operations: Provided, That monthly reports of the
quantity of materials extracted therefrom shall be submitted to the mines
regional office concerned: Provided,
further, That said right shall be
coterminous with the expiration of the agreement.
Holders of
existing mining leases shall likewise have the same rights as that of a
contractor: Provided, That said right
shall be coterminous with the expiry dates of the lease.
Section 49. Government Gratuitous Permit. -
Any government entity or instrumentality may be granted a gratuitous
permit by the provincial governor to extract sand and gravel, quarry or loose
unconsolidated materials needed in the construction of building and/or
infrastructure for public use or other purposes over an area of not more than
two hectares (2 has.) for a period coterminous with said construction.
Section 50. Private Gratuitous Permit. -
Any owner of land may be granted
a private gratuitous permit by the provincial governor.
Section 51. Guano Permit. -
Any qualified person may be granted a guano permit by the provincial
governor to extract and utilize loose unconsolidated guano and other organic
fertilizer materials in any portion of a municipality where he has established
domicile. The permit shall be for specific
caves and/or for confined sites with locations verified by the Department's
field officer in accordance with existing rules and regulations.
Section 52. Gemstone Gathering Permit. -
Any qualified person may be granted a non-exclusive gemstone gathering
permit by the provincial governor to gather loose stones useful as gemstones in
rivers and other locations.
CHAPTER IX
TRANSPORT, SALE AND PROCESSING OF MINERALS
Section 53. Ore Transport Permit. - A 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 as prima facie 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 pilot test purposes shall be exempted from such requirement.
Section 54. 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.
Section 55. Minerals Processing Permit. - No
person shall engage in the processing of minerals without first securing a
minerals processing permit from the Secretary.
Minerals processing permit shall be for a period of five (5) years
renewable for like periods but not to exceed a total term of twenty-five (25)
years. In the case of mineral ores or
minerals produced by the small-scale miners, the processing thereof as well as
the licensing of their custom mills, or processing plants shall continue to be
governed by the provisions of Republic Act No. 7076.
Section 56. Eligibility of
Foreign-owned/-controlled Corporation.
- A foreign-owned/-controlled
corporation may be granted a mineral processing permit.
CHAPTER X
DEVELOPMENT OF MINING COMMUNITIES,
SCIENCE AND MINING TECHNOLOGY
Section 57. Expenditure for Community Development
and Science and Mining Technology.
- A contractor shall assist in the development of its
mining community, the promotion of the general welfare of its inhabitants, and
the development of science and mining technology.
Section 58. Credited Activities. -
Activities that may be credited as expenditures for development of
mining communities, and science and mining technology are the following:
(a) Any
activity or expenditure intended to enhance the development of the mining and
neighboring communities of a mining operation other than those required or
provided for under existing laws, or collective bargaining agreements, and the
like; and
(b) Any
activity or expenditure directed towards the development of geosciences and
mining technology such as, but not limited to, institutional and manpower
development, and basic and applied researches.
Appropriate supervision and control mechanisms shall be prescribed in the
implementing rules and regulations of this Act.
Section 59. Training and Development. - A
contractor shall maintain an effective program of manpower training and
development throughout the term of the mineral agreement and shall encourage
and train Filipinos to participate in all aspects of the mining operations,
including the management thereof. For
highly-technical and specialized mining operations, the contractor may, subject
to the necessary government clearances, employ qualified foreigners.
Section 60. Use of Indigenous Goods, Services and
Technologies. - A contractor shall give preference to the
use of local goods, services and scientific and technical resources in the
mining operations, where the same are of equivalent quality, and are available
on equivalent terms as their imported counterparts.
Section 61. Donations/Turn Over of
Facilities. - Prior to cessation of mining operations occasioned by abandonment
or withdrawal of operations, on public lands by the contractor, the latter
shall have a period of one (1) year therefrom within which to remove his
improvements; otherwise, all the social infrastructure and facilities shall be
turned over or donated tax-free to the proper government authorities, national
or local, to ensure that said infrastructure and facilities are continuously
maintained and utilized by the host and neighboring communities.
Section 62. Employment of Filipinos. - A
contractor shall give preference to Filipino citizens in all types of mining employment
within the country insofar as such citizens are qualified to perform the
corresponding work with reasonable efficiency and without hazard to the safety
of the operations. The contractor,
however, shall not be hindered from hiring employees of his own selection,
subject to the provisions of Commonwealth Act No. 613, as amended, for
technical and specialized work which, in his judgment and with the approval of
the Director, requires highly-specialized training or long experience in
exploration, development or utilization of mineral resources: Provided, That in no case shall each
employment exceed five (5) years or the payback period as represented in
original project study, whichever is longer:
Provided, further, That each foreigner employed as mine manager,
vice-president for operations or in an equivalent managerial position in charge
of mining, milling, quarrying or drilling operation shall:
(a) Present evidence of his qualification and
work experience; or
(b) Shall pass the appropriate government
licensure examination; or
(c) In
special cases, may be permitted to work by the Director for a period not
exceeding one (1) year: Provided,
however, That if reciprocal privileges are extended to Filipino nationals in
the country of domicile, the Director may grant waivers or exemptions.
CHAPTER XI
SAFETY AND ENVIRONMENTAL PROTECTION
Section 63. Mines Safety and Environmental
Protection. - All contractors and permittees shall strictly comply with all the
mines safety rules and regulations as may be promulgated by the Secretary
concerning the safe and sanitary upkeep of the mining operations and achieve
waste-free and efficient mine development.
Personnel of the Department involved in the implementation of mines
safety, health and environmental rules and regulations shall be covered under
Republic Act No. 7305.
Section 64. Mine Labor. - No person under sixteen (16) years of age shall be employed