PHILIPPINE MINING ACT OF 1995

Republic Act No. 7942

(An Act Instituting a New System of Mineral Resources Exploration,
Development, Utilization, and Conservation)

GOVERNING LAW
 Section 1. Title.- This Act shall be known as the Philippine Mining Act of 1995.
o Enacted: March 3, 1995

WHAT ARE THE MAIN FEATURES OF THE LAW?

 Enacted as a new system of mineral resources exploration, development,
utilization and conservation
 It defines the modes of mineral agreements for mining operations, outlines the
procedure for their filing and approval, assignment/ transfer and withdrawal and fixes
their terms
 It prescribes the qualification of contractors and grants them certain rights
 It restricts the conditions for the exploration, quarry and other permits
 Regulates the transport, sale and processing of minerals
 It also spells out the government’s share (national and LGU) in the agreements as well
as the taxes imposed
 It likewise specifies the grounds for the cancellation, evocation and termination of
agreements and permits.

WHAT ARE THE ACTIVITIES WHICH MAY BE UNDERTAKEN BY THE STATE IN

CONNECTION WITH ITS FULL CONTROL ANS SUPERVISION?
 It may undertake the exploration and development and utilization using government
funds.
 It may enter to co-production, joint venture or production sharing agreements with
Filipino citizens or qualifies corporations
 It may allow small-scale utilization of natural resources
 For large scale, it may enter into agreements with foreign- owned corporations.

DECLARATION OF POLICY
 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.
SCOPE OF THE ACT
 Section 15. Scope of Application.- This Act shall govern the exploration, development,
utilization and processing of all mineral resources
 EDU and processing of Mineral Resources
o “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. [Section 3(y) of RA 7942]

OWNERSHIP OF MINERALS
 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.
 All mineral resources within private or public land, within 24nm from the baseline are
owned by the State.
 It echoes the concept of Jura Regalia, pursuant to which all lands of the public domain
belong to the state which is the source of any asserted right over the same.
 Jura Regalia does not only pertain to surface rights, it also applies to minerals found within
the bowels of the earth.

MINERALS RESERVATIONS
 Section 5. Mineral Reservations.- When the national interest so require, 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 material reservations and such other reservations as may
thereafter be established, shall be undertaken by the Department or through a contractor.

Q. When can the President declare a site as mineral reservation?

A. 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
- It is upon the recommendation of the Secretary of DENR

 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.
 Government has 10% share in the royalties- go to MGB
 All submerged lands within the contiguous zone and in the exclusive economic zone
of the Philippines are hereby declared to be mineral reservations.
 Prerogative of the President of the Philippines thru the recommendation of the Secretary
of DENR to classify lands of the public domain.
 Corollary thereto, under the Philippine Mining Act, the president is granted the power to
proclaim a mineral land as a mineral reservation regardless of whether such land is also
an existing forest reservation.
Cases in Point: PNOC vs Veneracion and Apex Mining vs Southeast Mindanao Gold Mining

PNOC VS VENERACION (GR No, 129820, November 30, 2006)

 Exploration of minerals in a government reservation is prohibited unless authorized by the
government itself.
 The state itself can even directly undertake the exploration and utilization of the mineral lands.

APEX MINING VS SOUTHEAST MINDANAO GOLD MINING (GR No. 152613, June 13, 2006)
Even if the DENR Secretary is the alter- ego of the President under the Doctrine of Qualified
Political Agency, it is beyond the ambit if the DENR Secretary to withdraw lands from forest reserves
and declare the same as an area open for mining operations.

DEFINITIONS OF TERMS (SECTION 3)

(1) Bureau- means the Mines and Geosciences Bureau under the Department of Environment and Natural Resources.
(2) Carrying capacity- refers to the capacity of natural and human environments to accommodate and absorb change
without experiencing conditions of instability and attendant degradation.
(3) Contract area- means land or body of water delineated for purposes of exploration, development, or utilization of
the minerals found therein.
(4) Co- production agreement (CA)- means an agreement entered into between the Government and one or more
contractors in accordance with Section 26(b) hereof.
(5) Department- means the Department of Environment and Natural Resources.
(6) 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.
(7) 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.
(8) 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.
(9) 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.
(10) Financial or technical assistance agreement- means a contract involving financial or technical assistance for large-
scale exploration, development, and utilization of mineral resources.
(11) 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.
(12) Joint venture agreement (JVA)- means an agreement entered into between the Government and one or more
contractors in accordance with Section 26(c) hereof.
(13) 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.
(14) 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.
(15) 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.
(16) Mineral agreement- 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.
(17) Mineral land- means any area where mineral resources are found.
(18) Mineral resource- means any concentration of minerals/rocks with potential economic value.
(19) 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.
(20) Mining operation- means mining activities involving exploration, feasibility, development, utilization, and
processing.
(21) 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.
(22) Onshore- means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and
creeks.
(23) Quarrying- means the process of extracting, removing and disposing quarry resources found on or underneath the
surface of private or public land.
(24) Quarry permit- means a document granted to a qualified person for the extraction and utilization of quarry resources
on public or private lands.

ORGANIZATIONAL STRUCTURE: PRIMARY AGENCY RESPONSIBLE

 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.
 The DENR is the primary agency responsible for the conservation, management,
utilization, and development of the State’s mineral resources.
 DENR Secretary shall have the authority to enter into mineral agreements in behalf of the
government
 He/ She may also promulgate rules as may be deemed necessary to implement the
provisions of the Mining Act.
Cases in Point: Southeast Mindanao Gold Mining Corporation vs Balite, Miners Association of the
Phil. vs Factoran

SOUTHEAST MINDANAO GOLD MINING CORPORATION VS BALITE

 The challenged MO 97-03 did not conclusively adopt “direct state utilization” as a policy in
resolving the Diwalwal dispute. The terms of the memorandum clearly indicate that what was
directed thereunder was merely a study of this option and nothing else.
 The DENR Secretary may also promulgate rules as may be deemed as necessary to
implement the provision of the Mining Act.

MINERS ASSOCIATION OF THE PHIL. VS FACTORAN (GR NO. 98332, JANUARY 16, 1995)
The Secretary of DENR is authorized to negotiate and conclude joint- venture, co- production,
production- sharing agreements for the exploration, development and utilization of mineral resources.

ROLE OF LOCAL GOVERNMENT

 In coordination with the MGB, it may approve applications for small- scale mining, sand
and gravel, quarry
 In connection, it is given a share in the wealth generated from the utilization of mineral
resources
 It is the LGUs responsibility that the community shall reach and informed decision on the
social acceptability of a mining project as a requirement for securing an environmental
compliance certificate.
 Role of LGU under Executive Order 79, July 6, 2012
o The Department if the Interior and Local Government (DILG) and the LGUs are
hereby directed to ensure that the exercise of the latter’s powers and functions
is consistent with and conform to the regulations, decisions, and policies
already promulgated and taken by the National Government relating to the
conservation, management, development, and proper utilization of the
State’s mineral resources, particularly RA No. 7942 and its implementing rules
and regulations, while recognizing the need for social acceptance of proposed
mining projects and activities.
o LGUs shall confine themselves only to the imposition of reasonable
limitations on mining activities conducted within their respective territorial
jurisdictions that are consistent with national laws and regulations.
o LGUs, DENR, and the MGB working together shall strictly implement RA No, 7076,
to ensure the protection of the environment, address various issues in small- scale
mining and ensure that violators thereof are subjected to appropriate
administrative and criminal liability.

ROLE OF MINES AND GEOSCIENCES BUREAU (MGB)

 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.
 Authority of MGB:
o Direct discharge in the administration and disposition of mineral lands and
resources
o Undertake geological, mining, metallurgical, chemical and other researches
o To cancel, or recommend the cancellation mining rights, mining application and
mining claims for failure to comply with pertinent laws
o MGB is conferred with quasi- judicial powers
o MGB has exclusive jurisdiction to hear and decide cases involving the cancellation
and/or enforcement of mining contracts due to failure of the contractor/ operator to
abide by pertinent laws.
 Non- Interference by the Courts on Purely Administrative Matters
Case in Point: Industrial Enterprises Inc vs CA

INDUSTRIAL ENTERPRISES INC VS CA (GR NO. 88550, APRIL 18, 1990)

The MGB has the primary jurisdiction where the question is what coal areas should be exploited and
developed and which entity should be granted coal operating contracts over said areas.
Q. What are areas open to Mining operations
A. 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 of financial or technical assistance agreement applications. Any conflict that
may arise under this provision shall be heard and resolved by the panel of arbitrators.
o GR: All mineral resources in public or private lands including timber or forestlands
shall be open to mineral agreements of FTAA
o EXPN: Subject to existing rights or reservations and prior agreements of all parties
o In case of Conflict= jurisdiction falls under the Panel of Arbitrators

 Areas Closed to Mining Applications

- Section 19 of RA 7942
- Executive Order No. 79 (2012)
o Military and other government reservations
o Near or under public or private buildings, cemeteries, archaeological and historic
sites, bridges, waterways, railroads, reservoirs or dams
o Areas covered by valid and existing mining right
o Areas covered by small- scale mines unless with prior consent of all the small scale
miners in which case there is a royalty paid to them
o Old growth and virgin forests watersheds, national, municipal and provincial parks
among others.
 Additional areas closed to Mining Operations under Executive Order 79 (2016)
o Protected areas categorized and established under the National Integrated
Protected Areas System (NIPAS) under RA No. 7586;
o Prime agricultural lands
o Tourism development areas, as identifies in the National Tourism Development
Plan
o Other critical areas, islands ecosystems, and impact areas of mining as
determined by current and existing mapping technologies.

EXPLORATION PERMITS
 Section 20. Exploration Permit.- An exploration permit grants the right to conduct
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.

Q. What is exploration?
A. “Exploration” means the searching or prospecting for mineral resources by
geological, geochemical or geophysical surveys, remote sensing, test pitting, trending,
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.
(Section 3, RA 7942)
o Exploration activities may be directly undertaken by the Department of in the event
the department cannot do so, any qualified person in specified areas as
determined by the Secretary.
o The conduct of mineral exploration by a qualified person in all areas open to mining
shall initially be undertaken through an exploration permit.

Q. Can a foreign contractor apply for and hold an exploration permit?

A. La Bugal B’laan Tribal Association vs Ramos
Petitioner’s Contention: Section 2 Article XII on National Economy and Patrimony
does not allow foreign- owned corporations to undertake mining operations directly. They
may act only as contractors of the state under the FTAA. And the state, as the party directly
undertaking exploitation of its natural resources must hold thru the government all
exploration permits and similar authorizations.
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 authorizations. In fact, there is no prohibition at all
against foreign or local corporations or contractors holding exploration permits.
EXPLORATION IS NOT TANTAMOUNT TO EXTRACTION

A TERM OF EXPLORATION PERMIT

 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. (Philippine Mining Act of 1995, RA No. 7945,
[March 3, 1995])
 IRR
o Two (2) years from the date of issuance thereof renewable for like periods (2 year
interval)
o But will not exceed 4 years (non- metallic); and
o 6 years (metallic exploration)
 Conditions for Renewal
o It has complied with the terms and conditions
o Not found guilty of violation of any provisions of the Act
o There should be a feasibility study undertaken and declaration of mining project
feasibility during the term of the permit.

Q. Is an Exploration Permit Transferrable?

A. 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.

Q. What is the effect if there is no prior approval?

A. The transfer is void and without legal effect. The permit grantee may no longer be allowed
to renew the same.

 In the case of Apex Mining vs Southeast Mindanao Gold Mining Corporation, it was held
that SEM has not acquired any right to the Diwalwal Gold Rush area because the transfer
of EP 133 was not with the prior approval of the DENR Secretary.
Q. What are the rights of a Permit Holder (Section 23)
A. The permit holder, his heirs, successors-in-interest have the right to enter, occupy and
explore the area.
It may undertake exploration work on the area based on the approved work
program. It may apply for MPSA, JVA, Co-production or FTAA over the area.

 Terms and Conditions of the Exploration Permit

o Right to explore is subject to valid, prior and existing rights of the parties. In case
of conflict, the panel of arbitrators will resolve it.
o Permit is for the exclusive use and benefit of the holder or any authorized
representative and it is exclusively for exploration only.
o The period is for two (2) years and renewable for like terms but not to exceed 4
years in case of non-metallic and 6 years in case of metallic minerals.
o The permit holder shall submit to the MGB or RO within 30 days after the end of
each semester a report of the exploration work program.
o The permit holder shall relinquish at least 20% of the permit area during the first 2
years of exploration except if the area is less than 5,000 hectares.
o The DENR Secretary shall annually review the performance of the grantee.
o The permittee shall submit a report to the MGB. RO a final report upon the
expiration of the permit.
o In cases of offshore exploration, it shall be carried out in accordance with the
UNCLOS
o On shore exploration activities shall be carried out in a manner that will, at all times,
safeguard the environment.
 Exploration Permit is Revocable When demanded by Police Power
o Southeast Mindanao Gold Mining vs Balite Portal Mining, the SC held that a
mining license, being a mere privilege does not vest absolute rights of the
holder. It can be revoked by the state in the interest of the public.

MINERAL AGREEMENTS (SECTION 26)

 Mineral Agreements- these agreements grant to the contractor the exclusive right to
conduct mining operations and to extract all mineral resources found in the contract area.

Q. Where do you file?

A. 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 filled with the Bureau.

 Term:
o Section 32. Terms.- Mineral agreements shall have a term not exceeding 25 years
to start from the date of execution thereof, and renewable for another term not
exceeding 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.
 Different modes of Mineral Agreements
(1) Mineral production sharing agreement
- is an agreement where the Government grants to the contractor the exclusive
right to conduct mining operations within a contract are and shares in the gross
output. The contractor shall provide the financing, technology, management and
personnel necessary for the implementation of this agreement.
 Mineral Production Sharing Agreement= Share in Gross Output
Government Qualified Person
Financing /
Technology /
Management /
Personnel /
Gross Output / /

(2) 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.
(3) 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.

Q. Eligibility: Who may apply for Mineral Agreements?

A. Section 27. Eligibility.- A qualified person may enter into any of the 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.
o “Qualified Person” (Section 3)
 Any citizen of the Philippines with capacity to contract, or
 A corporation, partnership, association, or cooperative organized or
authorized for the purposes of engaging in mining, with technical and
financial capability to undertake mineral resources development and
duly registered in accordance with law at 60% of the capital of which is
owned by the citizens of the Philippines:
 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.
EXPLORATION PERMIT VS MINERAL AGREEMENT
EXPLORATION PERMIT MINERAL PERMIT
Exploration only and does not include extraction Exploration and extraction
Wholly foreign owned corporations may be granted Corporations- 60% capital stock is owned by
exploration permit Filipinos
2 years (renewable; 4 yrs- non metallic; 6 yrs- 25 years renewable for another 25 years
metallic)
Must be registered within 15 days from notice Must be registered within 15 days from notice
Can be transferred with prior approval of DENR Can be transferred with approval of Secretary
Secretary

Q. Who has the authority to cancel Mineral Agreements?

A. The DENR Secretary and not the Panel of Arbitrators based on his administrative
authority, supervision, management and control over mineral resources under the Revised
Administrative Code.

FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT (FTAA)

 It means a contract involving financial or technical assistance for large- scale
exploration, development, and utilization of mineral resources. (Sec 3, Paragraph R)

Q. Who may apply for FTAA?

A. 1. Any Filipino citizen of legal age with capacity to contract;
2. A Filipino- owned Corporation, Partnership, Association or Cooperative, at least 60%
of the capital is owned by Filipino citizens, organized or authorized for the purposes of
engaging in mining with technical and financial capability to undertake mineral resources
development and duly registered in accordance with the law; or
3. A foreign- owned Corporation, Partnership, Association or Cooperative duly
registered in accordance with law and in which less than 50% of the capital is owned
by the Filipino citizens.

Q. Who will approve and negotiate FTAA? (Section 36)

A. Negotiated by the DENR and executed/ approved by the President

Q. Where do you file your FTAA Application? (Section 37)

A. File it with MGB after payment of required processing fees.

 Term of FTAA
o Section 38. Term of Financial or Technical Assistance Agreement.- A financial or
technical assistance agreement shall have a term not exceeding 25 years to
start from the execution thereof, renewable for not more than 25 years under
such terms and conditions as may be provided by law. (Philippine Mining Act of
1995, RA No. 7942 [March 3, 1995])

Q. Can an FTAA be transferred? (Section 40)

A. May be transferred to a qualified person with prior approval of the President.
Reportorial Requirement: President to Congress within 30 days from sate of approval of
President of the transfer.
Q. Can you withdraw from an FTAA? (Section 41)
A. Withdrawal is allowed.
Grounds: Mining project is no longer economically feasible, even after he has
exerted reasonable diligence to remedy the cause or the situation.

MINERAL AGREEMENT FTAA

Individual or corpo 60% is owned by Filipinos Corpo, 60% or less than 50% is owned by Filipinos
(as the case may be)
In case of transfer, the consent is given by the In case of transfer, the consent is given by the
Secretary of DENR President
No notification to congress is required Congress is notified in case of transfer

Q. Can an FTAA be validly revoked, rescinded, or withdrawn by Executive Action whenever

dictated by Public Interest or Public Welfare? (La Bugal B’laan Case)
A. In the case of La Bugal B’laan Case, the SC held that unlike a timber license agreement
which may be validly revoked whenever dictated by public interest or pubic service, an
FTAA for large scale EDU of mineral resources is a contract property right which
merits protection of the Constitution. The cancellation of the mining contract will
utterly deprive the contractor of its investment most of which cannot be pulled out.

Q. Can a fully- foreign owned mining corporation extend more than mere financial or technical
assistant to the state? Under the FTAA, will it be allowed to manage and operate every aspect of
the mining activity? (La Bugal B’laan Case)
A. The SC declared unconstitutional the FTAA to WMCP for being similar to a service
contract. The FTAA in this case was akin to a service contract which is antithetical to the
concept of sovereignty over the natural resources to the prejudice of the Filipino Nation.
In the resolution of the MR, the SC upheld the entering into the FTAAs provided
that the state has full control over the mineral resources. The foreign assistor or contractor
assumes all the technical and financial risks hence it may be given reasonable
management to protect its investment. However, in all case, the STATE MUST HAVE
FULL CONTROL, CONTROL MEANING, it may enable the state to direct, restrain,
regulate and govern the affairs of the enterprises.

ENVIRONMENTAL PROTECTION AND REHABILITATION (SECTIONS 69, 70, 71)

 All contractors and permittees shall strictly comply with all the mine safety rules and
regulations as may be promulgated by the Secretary concerning the safe and sanitary
upkeep of mining operations and achieve waste free and efficient mine development.

MINE LABOR: EMPLOYMENT OF PERSONS BELOW AGE OF MAJORITY (SECTION 64)

 No person under 16 years of age shall be employed in any phase of mining.
 No person under 18 years old shall be employed underground in a mine
RIGHTS OF A LOCATOR TO A PERFECTED MINING CLAIM
Cases in Point: Yinlu Bicol Mining vs Trans- Asia Oil, and Atok Big Wedge vs IAC

YINLU BICOL MINING VS TRANS- ASIA OIL (GR No. 207942, January 12, 2015)
Mining rights acquired under the Philippine Bill of 1902 and prior to the effectivity of the 1935
Constitution were vested rights that cannot be impaired even by the government.

ATOK BIG WEDGE CO VS IAC

The SC held that mere recording of a mining claim, without performing annual work obligation does
not convert the land into a mineral land.

AUXILIARY MINING RIGHTS (SECTIONS 72- 76)

 Timber Rights (Section 72)
Any provision of law to the contrary notwithstanding, 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: Provided, That if the land covered
by the mining area is already covered by existing timber concessions, the volume of timber
needed and the manner of cutting and removal thereof shall be determined by the mines
regional director, upon consultation with the contractor, the timber concessionaire/permittee
and the Forest Management Bureau of the Department: Provided, further, That in case of
disagreement 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.
 Water Rights (Section 73)
A contractor shall have water rights for mining operations upon approval of application
with the appropriate government agency in accordance with existing water laws, rules and
regulations promulgated thereunder: Provided, That water rights already granted or vested
through long use, recognized and acknowledged by local customs, laws, and decisions of
courts shall not thereby be impaired: Provided, further, That the Government reserves the
right to regulate water rights and the reasonable and equitable distribution of water supply so
as to prevent the monopoly of the use thereof.
 Right to Possess Explosives (Section 74)
A contractor/exploration permittee shall have the right to possess and use explosives
within his contract/permit area as may be necessary for his mining operations upon
approval of application with the appropriate government agency in accordance with
existing laws, rules and regulations promulgated thereunder: Provided, That the
Government reserves the right to regulate and control the explosive accessories to ensure
safe mining operations.
 Easement Rights (Section 75)
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 areas or lands owned,
occupied or leased by other persons, such infrastructure as roads, railroads, mills, waste
dump sites, tailings 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.
 Entry Into Private Land and Concession Areas (Section 76)
o Subject to prior notification, holders of mining rights shall not be prevented from
entry into private lands and concession areas by surface owners when conducting
mining operations therein.
o In case of damage to the property during the operations, there shall be proper
compensation. To guarantee the compensation, before undertaking the
operations, the contractors are required to post a bond with the RD.

Q. IS SECTION 76 UNCONSTITUTIONAL FOR BEING UNLAWFUL AND UNJUST TAKING OF

PRIVATE PROPERTY FOR PRIVATE PURPOSE IN CONTRAVENTION OF THE BILL OF
RIGHTS?
A. Didipio Earth- Savers’ Multi- Purpose Association, Inc. vs. Gozun, GR No. 157882, [March 30,
2006], 520 Phil 457-502
- Section 76 is a taking provision and not an exercise of police power
- While it is a taking provision, this does not mean that it is unconstitutional on the ground
that it allows taking of private property without the determination of public use and the payment
of just compensation.

Q. DOES THE DETERMINATION OF COMPENSATION BY THE PANEL OF ARBITRATORS

VIOLATIVE OF THE CONSTITUTION?
A. No. It does not encroach on the power of the trial courts to determine just compensation in
eminent domain cases. The determination of compensation by the Panel of Arbitrators is only
preliminary.

Q. IN CASE OF CONFLICTS INVOLVING MINING CLAIMS, WHO HAS JURISDICTION IN THE

SETTLEMENT OF CONFLICTS?
A. (1) Panel of Arbitrators
 Disputes on rights to mining areas
 Disputes involving mineral agreements or permits
 Involving surface owners, occupants, claimholders/ concessionaries.
o PA has exclusive and original jurisdiction to hear and decide these mining
disputes but their jurisdiction pertain only to questions of fact or matters requiring
the application of technological knowledge and experience.

(2) Mines Adjudication Board (MAB)

o It is composed of DENR Secretary, Director of MGB and undersecretary for
Operations of DENR.
o Its jurisdiction covers the settlement of conflicts involving mining claims.
o Re: Validity of Mining Contracts
 A mining dispute is within the jurisdiction of the MAB
 But it is devoid of jurisdiction to determine the validity of mining contracts
or disputes

Note: POLLUTION CASES
- Pollution as a result of mining activities fall under the jurisdiction of the
Pollution Adjudication Board and not the MAB.

o Appeal Decision of MAB

 Petition for Review on Certiorari under Rule 43, to the CA (Carpio vs Sulu
Resources Development Corporation)
 Questions of fact and law

PENAL PROVISIONS
 Section 102. Illegal Exploration.- Any person undertaking exploration work without the
necessary exploration permit shall, upon conviction, be penalized by fine of not exceeding
P50,000.00 (Philippine Mining Act of 1995, RA No. 7942, [March 3, 1995])
 Theft of Minerals (Section 103)
o Extract minerals and disposing the same without mining agreement, lease, permit,
license or steals minerals or ores from mines- imprisonment of 6 months to 6 years
or pay a fine from P10,000- P20,000, or both.
 Other Punishable Acts:
o Mines arson
o Willful damage to a mine
o Illegal obstruction to permittees or contractors
o Violation of the terms and conditions of the environmental compliance certificate
o Obstruction of government officials

“PEOPLES SMALL-SCALE MINING ACTOF 1991”

RA 7076 (JUNE 27, 1991)

GOVERNING LAW
 Section 1. Title. This Act small be known as the "People's Small-scale Mining Act of 1991

IMPLEMENTING RULES AND REGULATIONS

 DENR ADMINISTRATIVE ORDER NO. 033-15 (People’s Small Scale Mining Act of 1991, DENR Administrative
Order 003-15

DECLARATION OF POLICY
 Section 2. Declaration of Policy. It is hereby declared the policy of the State to promote, develop,
Protect an rationalize viable small-scale mining activities in order to generate more employment opportunities and provide
a equitable sharing of the nation's wealth and natural resources, giving due regard to existing rights as herein provided.

SALIENT FEATURES OF RA 7076

 Generate more employment opportunities in small scale mining
 Implemented by the Secretary of DENR
 It created the Provincial/City Mining Regulatory Board
 It authorize the board to declare and set aside small scale mining areas

DEFINITION OF TERMS

(1) Small-scale mining

 rely heavily on manual labor using simple implements and methods
 do not use explosives or heavy mining equipment;

Q. Can Corporations engage in Small Scale Mining?

(2) Small scale miners- refer to Filipino citizens who, individually or in the company of other Filipino citizens voluntarily
form a cooperative duly licensed by the Department of Environment and Natural Resources to engage, under the terms
and conditions of a contract, in the extraction or removal of minerals or ore-bearing materials from the ground

(3) Small-scale minIng contractor- refers to an individual or a cooperative of small-scale miners, registered with the
Securities and Exchange Commission or other appropriate government agency, which has entered into an agreement with
the State for the small-scale utilization of a plot of mineral land within a people's small-scale mining area;
“PEOPLES SMALL-SCALE MINING ACTOF 1991”
RA 7076 (JUNE 27, 1991)

(3) Small-scale mining contract- refers to co-production, joint venture or mineral production sharing agreement, between
the State and small-scale mining contractor for the small-scale utilization of a plot of mineral land;

(4) License- refers to the privileges granted to a person to legitimately pursue his occupation as a small-scale mill or
processor under this Act;

SMALL SCALE MINING UNDER PD 1899

 Under this law, small scale mining was defined as any single unit of mining operation having an annual production
of not more than 50,000 metric tons of ore

Q. IS THERE A SUBSTATIAL DISTINCTION BETWEEN THE MINERS COVERED BY RA 7076 WHO CAN EXTRACT
MUCH MORE THAN AS THEY CAN, AND THOSE COVERED UNDER 1899 WHO WERE IMPOSED AN EXTRACTION
LIMIT OF 50,000 MT?
A. The 50,000 MT applies also to small scale miners under RA 7076. There is no conflict between PD 1899 and RA 7076.
The DENR is mandated by law to regulate the country’s natural resources under EO 192. Both PD 1899 and RA 7076
delegated to the DENR Secretary the power to promulgate necessary implementing rules and regulations to give effect to
the said laws.

DMC 2007-07
 Imposing the annual production limit of 50, 000 MT to both small scale mining permits issued under PD 1899 and
RA 7076

PEOPLES SMALL SCALE MINING PROGRAM (SECTION 4)

 The purpose is to achieve the declared policy of the state under Section 2 (State Policies)

PURPOSE OF SMALL SCALE MINING PROGRAM

 To achieve an orderly, systematic and rational scheme for the small scale development and utilization of mineral
resources in certain mineral areas in order to address social, economic, technical and environmental connected
with small scale mining activities.

FEATURES OF SMALL SCALE MINING PROGRAM:

a) The identification, segregation and reservation of certain mineral lands as people's small-scale mining areas;
b) The recognition of prior existing rights and productivity;
c) The encouragemel1t of the formation of cooperatives;
d) The extension of technical and financial assistance, and other social services;
e) The extension of assistance in processing and marketing;
f) The generation of ancillary livelihood activities;
g) The regulation of the small-scale mining industry with the view to encourage growth and productivity; and
h) The efficient collection of government revenue,

DECLARATION OF POLICY
Declaration of People's Small-scale Mining Areas. - The Board is hereby authorized to declare and set aside people's
small-scale mining areas in sites onshore suitable for small-scale mining subject to review by the Secretary, immediately
giving priority to areas already occupied and actively mined by small-scale miners before August I, 1987; Provided, That
such areas are not considered as active mining areas; Provided further, That the minerals found therein are technically
and commercially suitable for small-scale mining activities: Provided, finally, That the areas are not covered by existing
forest rights or
Reservations and have not been declared as tourist or marine reserves, parks and wildlife reservations,
unless their status as such is withdrawn by competent authority.

DECLARATION OF PEOPLES SMALL SCALE MINING AREAS

 A.k.a MINAHANG BAYAN
 Provincial/ City Mining Regulatory Board

REQUIREMENTS OF MINAHANG BAYAN

 Areas are active mining areas
 Minerals found therein are technically and commercially suitable for small scale mining activities

AREAS OPEN FOR MINAHANG BAYAN

 Already occupied and actively mined by small miners before August 1, 1987
 Public lands covered by mining areas
 Public lands covered by existing mining rights which are not active mining areas: and
 Private lands subject to the consent of the land owners and a royalty that is maximum 1% of the gross value of the
minerals recovered

GENERAL RULE:
No ancestral land may be declared as a people's small-scale mining area without the prior consent of the cultural
communities concerned: Provided, That, if ancestral lands are declared as people's small-scale mining areas, the
members of the cultural communities therein shall be given priority in the awarding of small-scale mining
contracts.
“PEOPLES SMALL-SCALE MINING ACTOF 1991”
RA 7076 (JUNE 27, 1991)

REGISTRATION OF SMALL SCALE MINERS

 All persons undertaking small-scale mining activities shall register as miners with the Board and may organize
themselves into cooperatives in order to qualify for the awarding of a people's small-scale mining contract.
 Section 5: General Provisions:
o No small scale mining shall be undertaken outside a Minahang Bayan and that no entity shall engage in
small scale mining without a small scale mining contract. Likewise, no person shall work or be hired to
work in small scale mining and other similar operations unless registered with the Board.
 Peoples Small Scale Mining Act of 1991, DENER AO NO. 003-15 (March 16, 2015)

AWARDS OF PEOPLES SMALL SCALE MINING CONTRACTS

 Award of People's Small-scale Mining Contracts. - A people's small-scale mining contract may be awarded, by the
Board to small-scale miners who have voluntarily organized and have duly registered with the appropriate
government agency as an individual miner or cooperative: Provided, That only one (I) people's small-scale mining
contract may be awarded at anyone time to a small-scale mining contractor who shall start mining operations within
one (I) year from the date of award: Provided. Further that priority shall be given to small-scale miners residing in
the province or city where the small-scale mining area is located.
 Applications for a contract shall be subject to a reasonable fee to be paid to the Department of Environment and
Natural Resources regional office having jurisdiction over the area.

CONDITIONS:
 Miners have voluntarily organized and have been registered as an individual miner or cooperative
 Only one mining contract may be awarded at any one time within one year from the date of the award

CANCELLATION OF SMALL SCALE MINING CONTRACTS

 Failure to comply with the terms and conditions of the small scale mining contract/ mineral processing license
 Violation of any provision of RA7076 and this AO and other applicable laws, rules and regulation
 Non-payment of fees, taxes, royalties and/ or government production share in accordance with the AO and other
applicable laws, rules and regulation for two (2) consecutive years
 Abandonement of the small scale mining contract area or mineral processing plant by the small scale miners or
mineral processing respectively
 Any misrepresentation in any statement made in the application or those made later in support thereof
 Commiting acts constituting unfair competition when antional interest and public welfare so require of for
environmentaal protection or ecological reason
 When the minahang bayan has been reverted pursuan to Section 12 thereof

Q.WHAT SHALL BE THE EXTENT OF THE CONTRACT AREA?

A. The Board shall determine the reasonable size and shape of the contract area following the meridional block system
established under Presidential Decree No. 463, as amended, otherwise known as the Mineral Resources Development
Decree of 1974, but in no case shall the area exceed twenty hectares (20 has.) per contractor and the depth or length or
length of the tunnel or adit not exceeding that recommended by the director taking into account the following circumstances:
 Size of membership and capitalization of the cooperative;
 Size of mineralized area;
 Quantity of mineral deposits;
 Safety of miners;
 Environmental impact and other considerations; and
 Other related circumstances.

EASEMENT RIGHTS
Upon the declaration of a people's small-scale mining area, the director, in. consultation with the operator, claimowner,
landowner or lessor of an affected area, shall determine the right of the small-scale miners to existing facilities such as
mining and logging roads, private roads, port and communication facilities, processing plant which are necessary for the
effective implementation of the People's Small-scale Mining Program, subject: to payment of reasonable fees to
theoperator, claimowner, landowner or lessor.

THE SMALL SCALE MINERS MAY BE GRANTED EASEMENTS TO EXISTING FACILITIES:

 Mining roads
 Logging roads
 Private roads
 Port and communication facilities
 Processing plants

Q. WHAT ARE THE RIGHTS UNDER THE PEOPLES SMALL SCALE MINING CONTRACT
A. Section 12. Rights under a People's Small-scale Mining Contract - A people's small-scale mining contract entitles the
small-scale mining contractor to the right to mine, extract and dispose of mineral ores
for commercial purposes. In no case shall a small-scale mining contract be subcontracted, assigned or
otherwise transferred.
“PEOPLES SMALL-SCALE MINING ACTOF 1991”
RA 7076 (JUNE 27, 1991)

Q. CAN MINING CONTRACTS BE TRANSFERRED?

A. NO
In no case shall a small scale mining contract be subcontracted, assigned or otherwise transferred.

TERMS OF MINING CONTRACT

Terms and Conditions of the Contract - A contract shall have a term of two (2) years, renewable subject to verification by
the Board for like periods as long as the contractor complies with the provisions set forth in this Act, and confers upon the
contractor the right to mine within the contract area.

DUTIES AND OBLIGATIONS OF A HOLDER OF SMALL SCALE MINING CONTRACT

 Undertake mining activities only in accordance with a mining plan duly approved by the Board;
 Abide by the Mines and Geosciences Bureau and the Small-scale Mining Safety Rules and
 Regulations;
 Comply with his obligations to the holder of an existing mining right;
 Pay all taxes, royalties or government production share as are now or may hereafter be provided by
 law;
 Comply 'with pertinent rules and regulations on environmental protection and conservation,
 particularly those on tree-cutting; mineral-processing and pollution control;
 File under oath at the end of each month a detailed production and financial report to the Board; and
 Assume responsibility for the safety of persons working in the mines

WHAT ARE THE RIGHTS OF PRIVAYE LAND OWNERS

 The private landowner or lawful possessor shall be notified of any plan or petition to declare his land as a people's
mining area. Said landowner may oppose such plan or petition in an appropriate proceeding and hearing
conducted before the Board.
 If a private land is declared as a people's small-scale mining area, the owner and the small scale mining contractors
are encouraged to enter into a voluntary and acceptable contractual agreement for the small-scale utilization of
mineral values from the private land: Provided, That the owner shall in all cases be entitled to the payment of actual
damages which he may suffer as a result of such declaration: Provided further, That royalties paid to the owner
shall in no case exceed one percent (1%) of the gross vale of the minerals recovered as royalty.
 The private land owner shall be notified of the plan or petition to declare his land as peoples small scale mining
area
 In case of opposition, he will be heard by the boars thru a hearing called for such purpose
 It is declares as small scale niming area and the contractors are engaged to enter into a voluntary contractual
agreement ‘
 The owner is entitked to actual damages which he may suffer as a result of such declaration
 The royalty shall not exceed 1 % of the gross value of the mineral recovered

SALE OF GOLD

 All gold produce by small-scale miners in any mineral area shall be sold to the Central Bank, or its duly authorized
representatives, which shall buy it at prices competitive with those prevailing in the world market regardless of
volume or weight.
 The Central Bank shall establish as many buying stations in gold-rush areas to fully service the requirements of
the small-scale minerals thereat.

PEOPLES SMALL SCALE MINING PROTECTION FUND

 There is hereby created a People's Small-scale Mining Protection Fund which shall be fifteen percent (15%) of the
national government's share due the Government which shall be used primarily for the information dissemination
and training of smallscale miners, on safety, health and environmental protection, and the establishment of mine
rescue and recovery teams including the procurement of rescue equipment necessary in cases of emergencies
such as landslides, tunnel collapse, or the like.
 The fund shall also be made available to address the needs of the small-scale miners brought about by accidents
and/or fortuitous events.

REVERSION OF PEOPLES SMALL SCALE MINING AREAS

The Secretary, upon recommendation of the director, shall withdraw the status of the people's small-scale mining area
when It can no longer be feasibly operated on a small-scale mining basis or when the safety, health and environmental
conditions warrant that the same shall revert to the State for proper disposition.

REVERTED BY THE STARE UPON THE RECOMMENDATION OF DENR SECRETARY

 It can no longer be economically and efficiently operated on a small scale mining basis
 The working condition endanger the lives and health of the miners
 Small scale mining causes signifcant destruction to the environment
 There is continuous disturbance of peace for six (6) consecutive moths causing loss of lives and property
“PEOPLES SMALL-SCALE MINING ACTOF 1991”
RA 7076 (JUNE 27, 1991)

PROVINCIAL/ CITY MINING BOARD

SECTION 24. Provincial/Citv Mining Regulatorv Board. - There is hereby created under the direct supervision and control
of the Secretary a provincial/city mining regulatory board, herein called the Board, which shall be the implementing agency
of the Department.

POWERS AND FUNCTIONS

 Declare and segregate existing gold-rush areas for small-scale mining;
 Reserve future gold and other mining areas for small-scale mining;
 Award contracts to small-scale miners;
 Formulate and implement rules and regulations related to small-scale mining;
 Settle disputes, conflicts or litigations over conflicting claims within a people's small-scale mining
 area, an area that is declared a small-scale mining area; and
 Perform such other functions as may be necessary to achieve the goals and objectives of this Act.

MONCAYO INTEGRATED SMALL-SCALE MINERS ASSOCIATION, INC. [MISSMA], Petitioner, v. SOUTHEAST

MINDANAO GOLD MINING CORP

MAB’s jurisdiction covers the settlement of conflicts over mining claims, the Provincial Mining Regulatory Board (PMRB) —
created under Republic Act No. 7076 known as the People’s Small-Scale Mining Act of 1991 — granted powers that include
functions more executive in nature such as declaring and segregating areas for small-scale mining. It has the power to
declare gold-rich areas for small scale mining but under the direct supervision and control of the secretary.

COMPOSITION OF THE MINING REGULATORY BOARD

Composition of the Provincial/City Board. - The Board shall be composed of the Department of Environment and Natural
Resources representative as Chairman; and the representative of the governor or city mayor, as the case may be, one
(1) small-scale mining representative, one ( I) big-scale mining representative, and the 'representative from a
nongovernment organization who shall come from an environmental group, as members.

Q. CAN THE DENR SECRETARY DECLARE INVALID AND CANCELLED THE SMALL-SCALE MINING PERMITS
ISSUED BY THE PROVINCIAL GOVERNOR AS A LEGITIMATE EXERCISE OF HIS POWER OF REVIEW UNDER RA
7076?

LEAGUE OF PROVINCES OF THE PHILIPPINES VS DENR (GR NO 175368)

 Small scale mining is to be implemented by the DENR Secretary in coordination with other concerned local
government agencies. The LGC did not fully devolve the enforcement of the small scale mining law to the provincial
governmnet as its enforcement is subject to the supervisio , control, review of the Secretary of DENR.
 The SC uphold the decision of the DENR Secretary which declared invalid and cancelled the small-scale mining
permits issued by the provincial governor as a legitimate exercise of his power under RA 7076.

POWER OF CONTROL OF THE DENR SECRETARY

 Section 26. Administrative Supervision over the People's Small-scale Mining Program. – The Secretary through
his representative shall exercise direct supervision and control over the program and activities of the small-scale
miners within the people's small-scale mining area.

 The Secretary shall within ninety (90) days from the effectivity of this Act promulgate rules and regulations to
effectively implement the provisions of the same. Priority shall be given to such rules and regulations that will
ensure the least disruption in the operations of the small-scale miners.

-- END--