Policy and purpose of harmonization
- The circular requires a harmonized implementation of the pertinent provisions of the small-scale mining laws.
- PD No. 1899 and Republic Act (RA) No. 7076 must continue to govern small-scale mining operations.
- The circular establishes rules to clarify how small-scale mining permits and contracts operate across declared and undeclared areas.
Co-existence of PD No. 1899 and RA No. 7076
- PD No. 1899 and RA No. 7076 continue to govern small-scale mining operations.
- In areas not declared as Peoples’ Small-Scale Mining Area (PSSMA) under RA No. 7076, the rules under PD No. 1899 apply.
- Mines Administrative Order No. MRD-41 (Series of 1984) and Department Administrative Order (DAO) No. 28, and MRDB Administrative Order Nos. 3 and 3A as provided in DAO No. 96-40, as amended, continue to implement PD No. 1899.
- DAO No. 34 (Series of 1992) continues to implement RA No. 7076.
Scope: SSMPs, SSMCs, and PSSMA areas
- Small-scale mining operations in areas not declared as PSSMA are covered by Small-Scale Mining Permits (SSMPs) issued under PD No. 1899.
- Small-scale mining operations in PSSMAs declared under RA No. 7076 are covered by Small-Scale Mining Contracts (SSMCs) pursuant to the applicable provisions of RA No. 7076 and its implementing rules.
- Where a PSSMA is declared covering SSMP areas, the term of the SSMPs, including renewal, is recognized unless revoked, cancelled, or terminated with cause.
- Where such SSMPs are covered by a declared PSSMA, the SSMP holder has the option to shift to an SSMC under DAO No. 34, Series of 1997.
Term limits: permits and contracts
- An SSMP has a two (2)-year term.
- An SSMP is renewable only once.
- An SSMP must be renewed only if the application is filed prior to expiration, among other requirements.
- No SSMP may be renewed unless the two (2)-year term is fully consumed.
- An SSMC also has a two (2)-year term.
- No SSMC renewal is granted unless the two (2)-year term is fully consumed.
Applicant qualification rules
- Under PD No. 1899, any Qualified Person may apply for an SSMP.
- A Qualified Person under PD No. 1899 means:
- A Filipino citizen, of legal age, with capacity to contract; or
- A corporation or partnership authorized to engage in mining, registered with the Securities and Exchange Commission, with at least 60% of the capital owned at all times by Filipino citizens.
- Under RA No. 7076, only a Filipino small-scale mining cooperative organized by licensed and registered small-scale miners may apply.
Production limit: maximum annual output
- For metallic minerals, the maximum annual production under an SSMP/SSMC is 50,000 dry metric tons (DMT) of ore.
- For non-metallic minerals, the maximum annual production under an SSMP/SSMC is 50,000 DMT of the material itself, such as:
- 50,000 DMT of limestone,
- 50.000 DMT of silica, and
- 50,000 DMT of perlite.
- The maximum annual production includes low-grade and/or marginal ore.
- The maximum annual production also includes minerals or rocks intended for sampling and/or metallurgical testing purposes.
Capital investment ceiling
- The maximum capital investment for a single unit small-scale mining operation under PD No. 1899 or RA No. 7076 is PHP 10 Million.
- The maximum capital investment covers:
- raw,
- additional and existing capital,
- including processing plants,
- mine and hauling equipment,
- tool infrastructures,
- capitalized exploration and development costs,
- support facilities, and
- working capital.
Labor dependence and equipment restrictions
- Small-scale mining operations under PD No. 1899 or RA No. 7076 must be largely artisanal with heavy reliance on manual labor.
- Small-scale mining operations are required to be carried out without the use of explosives and/or blasting accessories.
- A single unit small-scale mining operation, in open cast or shallow underground, is prohibited from using sophisticated and/or heavy equipment for extraction and/or breakage, including:
- excavators,
- loaders,
- backhoes,
- dozers,
- drilling machines,
- and related or similar equipment.
- A single unit operation is also prohibited from using hauling equipment within the mining/permit/contract area.
- Hauling equipment used to transport ore or mined materials from the mine to the shipping point/market is not treated as prohibited use of sophisticated and/or heavy equipment.
- If non-sophisticated and non-heavy equipment is used, the ratio of labor cost to equipment utilization cost must not exceed one (1).
- Rentals, leases, and/or contracting of such equipment are included as part of equipment utilization for computing the ratio.
Environmental, safety, and social compliance requirements
- The SSMP/SSMC holder must strictly comply with environmental, safety and health, and social provisions under RA No. 7942 (Philippine Mining Act of 1995), the Small-Scale Mining Laws, and their implementing rules and regulations.
- The SSMP/SSMC holder must comply with the environmental compliance requirement that the Environmental Compliance Certificate for a small-scale mining operation be secured from the Environmental Management Bureau Regional Office concerned.
- The Environmental Compliance Certificate must fully conform with Small-Scale Mining Laws provisions, including compliance with the annual production limit of 50,000 DMT and the area of 20 hectares per permit/contract, among others.
- Before starting small-scale mining under an SSMP/SSMC, the holder must secure:
- a Potential Environmental Impact Report (a simplified Environmental Protection and Enhancement Program), and a Final Mine Rehabilitation Decommissioning Plan duly approved by the Mine Rehabilitation Fund Committee concerned.
- Before starting small-scale mining under an SSMP/SSMC, the holder must also secure:
- a Community Development and Management Program (a simplified Social Development and Management Program) duly approved by the Mines and Geosciences Bureau Regional Office concerned.
- Small-scale mining operations must strictly comply with DAO No. 97-30 on Small-Scale Mine Safety Rules and Regulations.
- The memorandum circular states that it takes effect immediately.