The Philippine

Mining Act of
1995
A. Governing Law

– RA No. 7942 or the “Philippine Mining Act of 1995”

To institute a new system of mineral resources exploration, development,

utilization and conservation in the country.
Defines the
modes of mineral
agreements for
mining
operations

Assignment/
transfer and
RA Outlines the
procedure for
their filing and

7942
withdrawal
approval

Fixes their terms.

– Regulates the transport, sale and processing of mineral, and promotes the
development of mining communities, science and mining technology, and
safety and environmental protection.

– Also, aside from penalizing certain acts, the law likewise specifies grounds for
the cancellation, revocation, and termination of agreements and permits.
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.
Ownership of mineral resources.

– Section 2, Article XII of the Constitution, provides:

All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State. With the exception of agricultural lands,
all other natural resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino citizens, or
corporations or associations at least sixty per centum of whose capital is owned by such
citizens.
– Ownership of mineral deposits by the state is also a dominant principle
expressed in PD No. 463, OR the Mineral Resources Decree of 1974.
Activities which may be undertaken
by the State in connection with its
“full control and supervision”
– The state may directly undertake such activities
– The State may enter into co-production, joint venture or production-sharing
agreements with Filipino citizens or qualified corporations.
– Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens.
– For the large-scale exploration, development and utilization of minerals,
petroleum and other mineral oils, the President may enter into agreements
with foreign-owned corporations involving technical or financial assistance.
Mechanism of Inspection and visitorial rights
over mining operations and institute
reportorial requirements in this manner:
– Section 8 of RA 7942 provides the DENR power to over-all supervision and
periodic review for “the conservation, management, development and proper
use of the State’s mineral resources.

– Section 9 authorizes MGB under DENR to exercise “direct charge in the

administration and disposition of mineral resources,” and empowers the MGB to
“monitor the compliance by the contractor of the terms and conditions of
mineral agreements,” “confiscate surety bonds,” and deputize whenever
necessary any member or unit of the PNP, barangay, duly register NGO or any
qualified person to police mining activities.
– Section 66 which vests in the Regional Director “exclusive jurisdiction over
safety inspections of all installations, whether surface or underground, utilized
in mining operations.
Classification of Mineral

First Group Metals or metalliferous ores Gold, Nickel, Irun, etc.

Second Group Precious stones Diamond, sapphire, ruby, etc.
Third group Fuels Coal, mineral oils, asphalt,
etc.
Fourth group Salines and mineral waters Salt, nitrates, carbonated, etc
Fifth group Building stone in place, clays, Marble, granite, phosphate,
fertilizers and other non- etc.
metals.
C. Scope of application
Areas OPEN to mining operations Areas CLOSE to mining operations
All mineral resource in public or public lands, In military or government reservations,
Including timber or forestlands. except upon prior written clearance by the
government agency concerned.
Near or under public or private buildings,
cemeteries, archeological and historic sites,
bridges, highways, waterways, railroads,
reservoirs, amongst others.
In areas covered by valid and existing mining
rights.
In areas expressly prohibited by law.
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 and
in areas prohibited under the National Integrated
Protected Area System
E. Mineral Agreements.

– Mineral Production Sharing Agreement (MPSA)

– Co-production agreement (CA)
– Joint-venture agreement (JVA)
Eligibility

– Satisfactory environmental track record from MGB and in consultation with the
EMB of the Department.
– In case on an individual – must be a Filipino citizen of legal age with capacity to
contract; or
– In case of a corporation, partnership, association or cooperative – must be
organized or authorized for the purpose if engaging in mining, duly registered in
accordance with law, at least 60% of the capital of which is owned by Filipino
citizens.
G. Quarry Resources

– Size of area covered by quarry permit:

Not more than 100 hectares in any one province and not more than one thousand
hectares in the entire country. (Sec. 69 of PD 463)
Cancellation of permit

– Failure to comply with the terms and conditions of the permit and
Environmental Compliance Certificate, if applicable.
– Violation of any provision of the Act and these IRRs.
– Failure to pay excise tax for 2 consecutive years.
– If the commodity stipulated in the permit has been exhausted before the expiry
date thereof and
– When national interest and public welfare so require or for environmental
protection or ecological reasons.
I. Transport, Sale and
Processing of Minerals
– No person shall engage in the trading of mineral products, either locally or
internationally, unless registered with the DTI and accredited by the
Department, with a copy of said registration submitted to bureau.
M. Settlement of Conflicts

– There shall be a panel of arbitrators in the regional office of the Department

composed of 3 members, two of whom must be members of the Philippine Bar
in in good standing and one a licensed mining engineer or a professional in a
related field, and duly designated by the Secretary recommended by the MGB
director.
Jurisdiction of Panel of
Arbitrators
– Disputes involving rights to mining areas
– Disputes involving mineral agreements or permit
– Disputes involving surface owners, occupants and claimholders/concessionaires
and
– Disputes pending before the Bureau and the Department at the date of the
effectivity of the Act.
In Gonzalo v Climax Mining Ltd. the Court ruled:

– Arbitration before the Panel of Arbitrators is proper only when there is a

disagreement between the parties as to some provisions of the contract
between them, which needs the interpretation and the application of that
particular knowledge and expertise possessed by members of that Panel. It is
not proper when one of the parties repudiates the existence or validity of such
contract or agreement on the ground of fraud or oppression as in this case. The
validity of the contract cannot be subject of arbitration proceedings. Allegations
of fraud and duress in the execution of a contract are matters within the
jurisdiction of the ordinary courts of law. These questions are legal in nature
and require the application and interpretation of laws and jurisprudence which
is necessarily a judicial function.
Mines Adjucation Board

– Appeal within 15 days from the receipt thereof which must decide the case
within 30 days from the submission thereof for decision.

– No authority over pollution cases.

– May also be appealed to the Court of Appeals citing the case of Carpio v Sulu
Resources Development Corporation.

– What about issues concerning validity of contracts? DENR has no jurisdiction.

O. Incentives

– Contractors in mineral agreements and financial or technical assistance

agreements shall be entitled to the applicable fiscal and non-fiscal incentives as
provided for under EO No. 226, otherwise known as the Omnibus Investments
Code of 1987
– Provided, that holders of exploration permits may register with the Board of
investments and be entitled to the fiscal incentives granted under the said code
for the duration of the permits or extensions thereof
– Provided, further, that mining activities shall always be included in the
investment priorities plan.
Incentives for pollution control
devices.
– Not considered as improvements, not subject to real property and other taxes
or assessments.

– Provided, however, that payment of min wastes and tailings fees is not
exempted.
Thank you!