y”>REPUBLIC ACT NO. 7942 March 3, 1995
AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
CHAPTER I
INTRODUCTORY PROVISIONS
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, 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.
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 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.
x. Joint venture agreement (JVA) 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. Non-governmental 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 miring, 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 Review 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 government 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 non-governmental 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 or bureau 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 location 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 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 expressedly 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 areas, 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 Areas 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 pr