Report Mining

8/10/2019 Report Mining

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PHILIPPINE MINING ACT OF 1995

(Republic Act No.7942)

A.

Preliminary Discussion

1.

Governing Law

On March 3, 1995, RA 7942 or the Philippine Mining Act of 1995, was enacted, instituting a

new system of mineral resources exploration, development, utilization and conservation in the

country.

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2.

Evolution of pertinent mining laws

a.

Royal Decree of May 1867 or The Spanish Mining Lawb.

Act of Congress of July 1, 1902 or Philippine Bill of 1902

c.

CA No.137 Mining Act on November 7, 1936

d.

Ordinance Appended to the Constitution otherwise known as Parity Rights on March

11, 1947

e.

EO 141 on August 1, 1968

f.

1973 Constitution on January 17, 1973

g.

PD No. 463 enacted on May 17, 1974

h.

PD No. 1214 on October 14, 1977

i.

1987 Constitution on February 2, 1987

j.

Philippine Mining Act of 1995 or RA No. 7942 on March 3, 1995

k.

DAO No. 95-23 series of 1995 Implementing Rules and Regulations of RA 7942l.

DAO No. 96-40 series of 1996

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3.

Declaration of policy

Mineral production is a major support of the national economy, and therefore the intensified

discovery, exploration, development and wise utilization of the countrys mineral resources are

urgently needed for national development.PD No. 463

4.

Ownership of Mineral Resources

Section 2, Article XII of the Constitution

Regalian Doctrinereserves to the State all minerals that may be found in public and

private land devoted to agricultural, industrial, commercial, residential or (for) any

purposes other than mining


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a.

Full control and supervision by the State in the exploration, development and utilization of

the countrys natural resources

b.

The old system of exploration, development and utilization of natural resources through

licenses, concessions or leases has been omitted under the 1987 Constitution

c.

RA 7942 reiterates ownership of natural resources by the State (Section 4 of RA 7942 and

Section 2 of DAO No. 96-40)

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d.

Activities which may be undertaken by the State in connection with its full control and

supervision

The state may undertake these activities through four modes:

1.

The State may directly undertake such activities

2.

The State may enter into co-production, joint venture or production sharing

agreements with Filipino citizens or qualified corporations

3.

Congress, may by law, allow small-scale utilization of natural resources by Filipino

citizens4.

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

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5. Mineral Reservations

Section 5 or RA no. 7942 provides:

SEC. 5 Mineral Reservations

When the national interest so requires, such as whenthere 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

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6. Classification of Minerals

First group -metals or metalliferous ores

Second group -Precious stones

Third group -Fuels

Fourth group -salines and mineral waters

Fifth group -building stone in place, clays, fertilizers and other non-metals


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7. Definition of terms

a.

Block or meridional block means an area bounded by one half (1/2) minute

latitude and one half minute longitude, containing approximately eighty one

hectares (81 has.)

b.

Bureau means the mines and Geosciences Bureau under the DENR

c.

Department means the DENR

d.

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

e.

Director means the Director of Mines and Geosciences Bureau

f.

Minerals refers to all naturally occurring inorganic substance in solid, gas, liquid or

any other intermediate state excluding energy materials such as coal, petroleum,

natural gas, radioactive materials and geothermal energy

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B.

Organizational Structure

1. Authority of the Department

As stated under Section 8 of RA No. 7942

-

Shall be the primary agency responsible for the conservation,

management, development and proper use of the States minerals

-

The Secretary shall have the authority to enter into mineral agreements

on behalf of the government

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2. Authority of the Bureau

As state under Section 9 of RA No. 7942

-

Have the direct charge in the administration and disposition of mineral

land and resources

-

Shall undertake geological, mining, metallurgical, chemical and other

researches

-

Confiscate, after due process, surety, performance and guaranty bonds

after notice of violation

-

To recommend to the Secretary the granting of Mineral arrangements

-

To cancel or recommend cancellation of mining rights, claims and

applications

-

To deputize, when necessary the PNP, barangay or NGO or any qualified

person to police all mining activities

-

To assist the Environmental Management Bureau (EMB) under the DENR

in the processing and conduct of environmental impact assessment


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3. Role of Local governments

Under Sec. 8 of the Act and pursuant to the Local Government Code

-

To ensure that relevant laws on public notice, public consultation and

public participation are complied with

-

To receive their share as provided by law in the wealth generated from

the utilization of mineral resources and thus enhance economic progress

and national development

-

To participate in the monitoring of any mining activity as member of the

Multipartite Monitoring Team referred to in Section 185 thereof

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C.

Scope of Application

1.

Areas open to mining operations (Section 18)

Subject to any existing rights or reservations and prior arrangements of all parties, all mineral

resources in public or private lands, including timber or forest land as defined in existing laws,

shall be open to mineral arrangements 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.

2.

Areas closed to mining operations

Mineral arrangement or financial or technical assistance agreement applications shall bot be

allowed:

a.

In military and other government reservations, except upon prior written clearance by thegovernment agency concerned

b.

Near or under public or private buildings, cemeteries, archaeological and historic sites, etc.

c.

In areas covered by valid and existing mining rights

d.

In areas expressly prohibited by law

e.

In areas covered by small scale miners defined by law

f.

Old growth or virigin forests, proclaimed watershed forest reserves, wilderness area,

mangrove forests, mossy forests, etc.

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D.

Exploration Permit

1.

Section 20. Exploration PermitAn 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 peron.

2.

Term of Exploration permit

a.

Two (2) years from date of issuance, renewable for like periods but not to exceed a total

term of four (4) years for non-metallic mineral exploration or six (6) years for metallic

mineral exploration


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3.

Transfer of exploration permit as provided under Section 25 of the Act

4.

Maximum Area for exploration permit

Qualified PersonOnshore, in any one

province

Onshore, in the entire

Philippines

Offshore, beyond five

hundred meters from

mean low tide level

Individuals 20 blocks 40 blocks 100 blocks

Partnerships,

corporations, cooperatives

or associations

200 blocks 400 blocks 1000 blocks

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E.

Mineral Agreements

1.

Forms of mineral agreement

a.

Mineral production sharing agreement (MPSA) - is an agreement where the local

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 (CA)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 (JVA)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.

2.

Eligibility

A qualified person means-

a.

In case of individual - must be a Filipino citizen of legal age and with capacity to contract; or

b.

In case of corporation, partnership, association or cooperativemust be organized or

authorized for the purpose of engaging in mining, duly registered in accordance with law at

least sixty percent of the capital of which is owned by Filipino Citizens

3.

Maximum area for mineral agreement

Qualified PersonOnshore, in any one

province

Onshore, in the entire

Philippines

Offshore, beyond five

hundred meters from

mean low tide level

Individuals 10 blocks 20 blocks 50 blocks

Partnerships,

corporations, cooperatives

or associations

100 blocks 200 blocks 500 blocks


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F.

Financial or Technical Assistance Agreement (FTAA)

1.

FTAA is defined as a contract involving financial or technical assistance for large scale

exploration, development, and utilization of natural resoures.

2.

Eligibilityany qualified person with technical and financial capability to undertake large-scale

exploration, development and utilization of natural resources in the Philippines

3.

Minerals subject to FTAAgold, copper, nickel, chromite, lead, zinc and other minerals;

however, no FTAAs may be granted to cement raw materiasl, marble, granite, sand andgravel

and construction aggregates

4.

Maximum contract area

a.

1,000 meridional blocks for onshore

b.

4,000 meridional blocks for offshore, or

c.

Combimation of a and b provided it shall not exceed the maximum limits for onshore

and offshore areas

5.

Term of an FTAAa term not exceeding twenty five years and renewable for another term of

twenty five years under such terms and conditions as maybe provided by law

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G.

Quarry Resources

1.

Quarry Resources Defined

Quarry resources means any common stone or other common mineral substances as the

Director of Mines and Geo-Sciences may so declare, such as, but not restricted to, marble,

granite, volcanic cinders, basalt, tuff and rock phosphate, provided they contain no metals or

other valuable minerals in economically substantial quantities

2.

Quarry Permit, Area and Period

-

Any qualified person may apply to the provincial/city mining regulatory board for a

quarry permit on privately owned and/or public lands for building and construction

materials-

The maximum area which a qualified person may hold at any one time shall be 5

hectares

-

A quarry permit shall have a term of five years, renewable for like periods but not

to exceed twenty five years

3.

Cancellation of permit


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A quarry permit may be cancelled by the provincial governor for violations of the provision of

this Act or its implementing rules and regulations

4.

Other Quarry permits

a.

Commercial sand and gravel permit

b.

Industrial sand and gravel permit

c.

Exclusive sand and gravel permit

d.

Government gratuitous permit

e.

Private gratuitous permit

f.

Guano permit

g.

Gemstone Gathering permit

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H.

Transport, Sale and processing of Minerals

1.

Ore transport permit

A permit specifying the origin and quantity of non-processed mineral ores shall be required for

their transport. The absence of a permit shall be considered as prima facie evidence of illegal

mining and shall be sufficient cause for the government to confiscate the ores or minerals

a.

Mineral Trading Registration

b.

Minerals Processing Permit

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I.

Safety and Environmental Protection

1.

Mines safety and environmental protection

All contractors and permittees shall strictly comply with all the mines safety rules and

regulations as may be promulgated by the Secretary concerning the safe and sanitary upkeep of

the mining operations and achieve waste-free and efficient mine development.

a.

Mine Labor

b.

Power to issue orders

c.

Pollution cases under the jurisdiction of the Pollution and Adjudication Board

d.

Environmental impact assessment

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J.

Settlement of Conflicts

1.

Panel of Arbitrators


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

members, two of whom must be members of the Philippine bar and one a licensed mining

engineer. The panel shall have exclusive and original jurisdiction to hear and decide the

following:

a.

Disputes involving rights to mining areas

b.

Disputes involving mineral arrangements or permit

c.

Disputes involving surface owners, occupants and claimholders/concessionaires;

and

d.

Disputes pending before the Bureau and the Department at the effectivity of this

Act.

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K.

Grounds for Cancellation, Revocation and Termination

RA 7942 provides for the grounds for the cancellation or suspension of any permit or agreement

such as the failure of the permittee or contractor to comply with any of the requirements of the

law as well as its implementing rules.-

Late or non-filing of requirements

-

Non-payment of taxes and fees

-

Falsehood or omission of facts in the statement

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L.

Penal Provisions

RA 7942 provides the penalty fines for the following:

a.

False statements

b.

Illegal explorationc.

Theft of minerals

d.

Destruction of mining structures

e.

Mines arson

f.

Willful damage to a mine

g.

Illegal obstruction of permittees or contractors

h.

Violation of the terms and conditions of the environmental compliance certificate

i.

Obstruction of government officials

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