Law Summary

SECTION 1: Amendments to Previous Act

This section amends specific provisions of Republic Act No. 389, which provides assistance to the gold mining industry.

• Key Definitions:
  • Gold Producer: Entities producing gold, with at least 70% capital owned by Philippine citizens.
  • Government: Refers to the Government of the Republic of the Philippines.
  • Board: Gold Mining - Industry Assistance Board responsible for implementing the Act.
  • Cost of Production: Includes all expenses associated with gold production, such as mining, smelting, refining, and administrative costs.
  • Newly-mined Gold: Gold produced fresh from the mill or smelter, certified by the producer and confirmed by the Board.
  • Official Price: Fixed at $35.00 per ounce, subject to adjustments by the Government.

SECTION 4: Qualification for Assistance

Gold producers must meet specific criteria to receive assistance under this Act.

• Requirements:

  • Must sell the entire production of newly mined gold to the Central Bank at the official price.
  • If gold is processed abroad, Philippine vessels must be used.
  • If gold is sold outside the established regulations, the producer forfeits assistance for that year and must refund any received.

• Penalties:

  • Violating sales regulations can lead to a fine of up to P5,000, imprisonment for up to two years, or both.

• Investment Limitation:

  • Producers investing more than 25% of their capital abroad lose eligibility for assistance unless specific conditions are met.

• Profit Limitation:

  • Producers with a profit exceeding 12% on gold sales to the Central Bank are ineligible for assistance that year.

SECTION 5: Payment Structure

This section outlines the payment structure for gold producers receiving assistance.

• Assistance Details:

  • For mines producing ≤ 100,000 ounces: P60 per ounce + 70% of the positive difference between production costs and official price.
  • For mines producing > 100,000 ounces: P50 per ounce + 65% of the positive difference.

• Conditions:

  • Total assistance plus the official price must not exceed certain limits (P350 and P310 per ounce for respective production levels).

• Employee Bonus:

  • A 10% bonus of assistance must be given to employees earning ≤ P500 per month, payable within one week of the Central Bank's payment.

SECTION 6: Term of Assistance

The assistance provided under this Act is temporary.

• Duration:
  • Direct assistance is effective for five years from the date of approval of this Act.

SECTION 2: New Section 13-A - Free Market Sales

This section introduces provisions for gold producers not receiving subsidies.

• Sales Regulations:
  • Producers not receiving assistance may sell gold in the free market, subject to rules set by the Monetary Board.
  • The Monetary Board retains the authority to restrict sales in the national interest.

Effective Date

The Act becomes effective upon its approval, dated August 5, 1971.

Key Takeaways

• The Act amends previous legislation to clarify definitions and eligibility for assistance in the gold mining sector.
• Gold producers must adhere to strict selling and investment regulations to qualify for government assistance.
• Payment structures are defined based on production levels, with stipulated maximum assistance limits and employee compensation requirements.
• The assistance is temporary, lasting five years, and new provisions allow non-subsidized producers to engage in free market sales under specific conditions.