Revised rules for People's Small-Scale Mining Act

DAO No. 2015-03 (dated March 17, 2015) is entitled “Revised Implementing Rules and Regulations of Republic Act No. 7076, otherwise known as the ‘People’s Small-Scale Mining Act of 1991.’” It provides revised rules for orderly administration, licensing, declaration of people’s small-scale mining areas (Minahang Bayan), environmental protection, safety and health, and support/assistance to small-scale miners and processors.

An “Active Mining Area” is an area under actual exploration, development, utilization or commercial production, as determined by the Secretary after field investigation/verification, and it includes contiguous and geologically related areas supported by an established geological report—but cannot exceed the maximum area allowed by law.

A person intending to undertake small-scale mining must register with the Provincial/City Mining Regulatory Board subject to submission of (i) a valid government-issued identification card and (ii) proof of Filipino citizenship; the Board maintains a registry within its jurisdiction.

No small-scale mining may be undertaken outside a Minahang Bayan, and no person/entity may engage in small-scale mining without a small-scale mining contract; also, no person shall work or be hired unless registered with the Board.

The applicant must submit: (1) an application form duly accomplished and notarized (Annex A); (2) payment of an application fee of PhP1,000.00 to the Regional Office; and (3) proof of registration with SEC/DTI/CDA or other appropriate agency; the applicant must be 100% Filipino.

The license is effective during the term of the pertinent small-scale mining contract, but it is applicable only to applications for small-scale mining contracts within a province.

Among others: (i) areas already occupied and actively mined by small-scale miners before Aug. 1, 1987 (subject to conditions); (ii) public lands covered by certain mining applications (with specific escrow/royalty rules); (iii) public lands with existing mining permit(s)/contract(s) that are not active mining areas; (iv) public lands covered by valid existing mining permits/contracts (subject to area limits); and (v) private lands subject to consent and royalty/damages rules, plus ancestral lands/domains subject to CADT/CALT/verification and FPIC.

The applied area must not be less than 1.25 hectares and not more than 20 hectares per small-scale mining contract (with adjacent/contiguous meridional block parcels).

For metallic minerals (limited to gold, silver or chromite) and generally under the contract terms, it has a term of two (2) years, renewable for like periods, but not to exceed a total term of six (6) years.

Among others: no use of explosives/blasting accessories/explosives ingredients/heavy equipment; no hydraulicking or compressor mining at any stage; no use of mercury in any phase; and mining must be confined to the contract area; it must also follow specific mine safety rules and environmental obligations.

The ore produced shall not exceed 50,000 metric tons annually and must be processed in a custom mill.

Small-scale mineral processing may be undertaken only through centralized custom mills located within mineral processing zones under a Mineral Processing License (MPL), and no mercury shall be used in mineral processing.

Custom mills must act as withholding agents for royalties, production share, or other taxes due the government, and must be registered with the Bureau of Internal Revenue.

In five copies, the application must include: Annex B notarized application; required fees; small-scale miners license copy; NAMRIA location map; sketch plan; proposed small-scale mining contract; survey order application; proposed Two-Year Work Program (Annex C); PEIMP; CEMCRR or Certificate of Exemption (if no past/present use/venture); CDMP; ASHP; and a sworn declaration of total area (hectarage) covered nationwide.

Within 15 days, the Board checks the control map: if the area is totally in conflict, the Board denies the application; if partially in conflict, it returns the application for revision/resubmission within 15 days; also, only one (1) people’s small-scale mining contract may be awarded at any one time to a small-scale mining contractor in the entire country.

The contractor/processor must pay: (i) national and local taxes; (ii) royalty equivalent to 5% of gross output for small-scale mining within mineral reservations; and (iii) the government production share (as determined by law/Board and contract context). It must also pay an occupation fee of PhP100.00 per hectare (or fraction) per year to the municipality, with initial payment due on approval.

It is created under RA 7076 and consists of 15% of the national government’s share of internal revenue tax or production share due the government. It is used primarily for information dissemination and training on safety, health, and environmental protection, and for establishing Mine Rescue and Recovery Teams including procurement of rescue equipment; it may also address needs arising from accidents/fortuitous events, with the Board as Trustee.

Grounds include: failure to comply with contract/licensing terms; violation of RA 7076/DAO or other applicable laws/rules; non-payment of fees/taxes/royalties/production share for two consecutive years; abandonment; misrepresentation; unfair competition; requirement by national interest/public welfare or for environmental/ecological reasons; and reversion of Minahang Bayan under the DAO.