Legal basis and governing framework
- The Order is issued pursuant to Republic Act No. 7942, the Philippine Mining Act of 1995.
- The Order is also issued pursuant to Department Administrative Order No. 96-40, the Revised Implementing Rules and Regulations (IRR) of Republic Act No. 7942.
- The Order implements the Mining Act’s system that recognizes Exploration Permits (EPs), Mineral Agreements (MAs), and Financial or Technical Assistance Agreements (FTAAs) with Qualified Persons.
- The Order applies in relation to the Mining Act’s rules on the maximum areas that a Qualified Person may hold or be granted under an EP, MA, or FTAA.
- The Order directs that the determination rules for whether applicants are one and the same Qualified Person are used to limit the aggregate area held or granted to a single Qualified Person.
Policy, purpose, and area-limiting intent
- The Order declares that the State shall promote the rational and equitable distribution, exploration, development, utilization, and conservation of mineral resources through combined efforts of the Government and the private sector.
- The Order states that these efforts must enhance national growth while safeguarding the environment and protecting the rights of affected communities (Section 1).
- The Order provides guidelines to ensure compliance with the Mining Act intent to limit areas that may be held or granted to a single Qualified Person (Section 1).
- The Order targets the practical issue of whether two or more mining applicants are deemed the same Qualified Person for applying for and being granted EPs, MAs, or FTAAs (Section 1).
Key definitions for qualified status
- “Qualified Person” means a Filipino citizen of legal age and with capacity to contract, or a corporation, partnership, association or cooperative organized or authorized for mining, with technical and financial capability to undertake mineral resource development, and duly registered in accordance with law, with at least sixty percent (60%) of capital owned by Filipino citizens; provided that a legally organized foreign-owned corporation is deemed a Qualified Person for purposes of granting an Exploration Permit, FTAA, or Mineral Processing Permit only (Section 2).
- “Foreign-owned Corporation” means a corporation, partnership, association, or cooperative registered in accordance with law where less than fifty percent (50%) of capital is owned by Filipino citizens (Section 2).
- “Juridical Persons” means a corporation, partnership, or association for private interests or purposes to which the law grants juridical personality separate and distinct from each shareholder’s, position’s, or member’s (Section 2).
- The Order provides that all other terms used conform to the meanings in Section 3 of the Act and Section 5 of the IRR (Section 2).
Maximum areas per Qualified Person
- Each Qualified Person is entitled to hold or apply for the maximum area for each mining right, in the amounts fixed under Section 3, based on whether the holder is an individual or a corporation, partnership, association or cooperative (Section 3(a)–(c)).
- Exploration Permit (EP) — Onshore, in any one province:
- For an individual: twenty (20) blocks or approximately 1,620 hectares.
- For a corporation/partnership/association/cooperative: two hundred (200) blocks or approximately 16,200 hectares (Section 3(a)(1)).
- Exploration Permit (EP) — Onshore, in the entire Philippines:
- For an individual: forty (40) blocks or approximately 3,240 hectares.
- For a corporation/partnership/association/cooperative: four hundred (400) blocks or approximately 32,400 hectares (Section 3(a)(2)).
- Exploration Permit (EP) — Offshore, in the entire Philippines beyond five hundred meters (500 m) from the mean low tide level:
- For an individual: one hundred (100) blocks or approximately 8,100 hectares.
- For a corporation/partnership/association/cooperative: one thousand (1,000) blocks or approximately 81,000 hectares (Section 3(a)(3)).
- Mineral Agreements (MA) — Onshore, in any one province:
- For an individual: ten (10) blocks or approximately 810 hectares.
- For a corporation/partnership/association/cooperative: one hundred (100) blocks or approximately 8,100 hectares (Section 3(b)(1)).
- Mineral Agreements (MA) — Onshore, in the entire Philippines:
- For an individual: twenty (20) blocks or approximately 1,620 hectares.
- For a corporation/partnership/association/cooperative: two hundred (200) blocks or approximately 16,200 hectares (Section 3(b)(2)).
- Mineral Agreements (MA) — Offshore, in the entire Philippines beyond five hundred meters (500 m) from the mean low tide level:
- For an individual: fifty (50) blocks or approximately 4,050 hectares.
- For a corporation/partnership/association/cooperative: five hundred (500) blocks or approximately 40,500 hectares (Section 3(b)(3)).
- Mineral Agreements (MA) — Exclusive Economic Zone:
- The Order provides a larger area to be determined by the Secretary upon the recommendation of the Director (Section 3(b)).
- The determination of total area that a mining applicant/contractor may apply for or holds under a Mineral Agreement does not include mining/quarry areas under operating agreements between the mining applicant/contractor and a claim owner/leasee/permittee/licensee entered into under P.D. No. 463 (Section 3(b)).
- Financial or Technical Assistance Agreement (FTAA):
- 1,000 meridional blocks or approximately 81,000 hectares onshore; or
- 4,000 meridional blocks or approximately 324,000 hectares offshore; or
- Combination of 1,000 meridional blocks onshore and 4,000 meridional blocks offshore (Section 3(c)).
When applicants count as one Qualified Person
- The Order limits the total aggregate area that may be held by or granted to a single Qualified Person for an EP, MA, or FTAA to the maximum areas provided in the Mining Act and IRR (Section 4(a)).
- For a Juridical Person duly registered in the Philippines, a mining applicant is deemed to be one and the same in relation to other mining applicants/contractors/permittees if more than seventy percent (70%) of their authorized capital stock are held by the same stockholders (Section 4(a)).
- Where the same-stockholders test under Section 4(a) applies, the applicants are limited to the maximum area that may be applied for or granted for an EP, MA, or FTAA (Section 4(a)).
Mandatory affidavit filing requirement
- A mining applicant must execute and submit an Affidavit (Annex “A”) declaring the required area and ownership information (Section 4(a)).
- The Affidavit must include the list of all mining applications the applicant has filed and the mining permit(s)/contract(s) granted, including:
- the corresponding hectarage and the area’s location, and
- the data disaggregated on a per province basis (Section 4(a)).
- The Affidavit must include the list of other applicants/contractors/permittees in which more than seventy percent (70%) of the authorized capital stock is held by the applicant’s stockholders, including:
- the corresponding hectarage and location of the areas, and
- the data disaggregated on a per province basis (Section 4(a)).
- The Affidavit is an additional mandatory requirement for acceptance of a mining application (Section 4(a)).
Capital and work program capability requirements
- A Qualified Person must have financial and technical capability to undertake the submitted Exploration/Development/Utilization Work Program and Environmental Work Program/Environmental Protection and Enhancement Program under the applicable EP, MA, or FTAA (Section 4(a)).
- A mining applicant for an EP, MA, and FTAA must have a minimum authorized capital stock of Ten Million Philippine Pesos (PhP10,000,000.00) (Section 4(a)).
- A mining applicant for an EP, MA, and FTAA must have a minimum paid-up capital of Two Million Five Hundred Thousand Philippine Pesos (PhP2,500.000.00) (Section 4(a)).
- For applicants for FTAA, the minimum authorized capital stock is Four Million US Dollars (US$ 4,000,000.00) or its Philippine Peso equivalent, after approval of the President of the Republic of the Philippines and prior to registration of the FTAA as provided in the IRR (Section 4(a)).
- The submission of curricula vitae and track of records in mining operations and environmental management of the technical personnel undertaking the activities under the submitted work programs is required as a mandatory requirement under the IRR (Section 4(a)).
Determination process limited to evaluation step
- A determination that a mining applicant for an EP, MA, or FTAA is a single and separate Qualified Person does not constitute approval or grant of the mining application (Section 4(b)).
- The determination is only a procedural requirement in the evaluation of the application.
- A granted application remains subject to other and further requirements under the Act, IRR, and other pertinent laws, rules and regulations (Section 4(b)).
Transitory compliance for pending applications
- Mining applicants with pending applications for EPs, MAs, and FTAA must comply with the Order within nine (9) months from the Order’s effectivity (Section 5).
- The applicant must submit a Letter notifying the Bureau/Regional Office of intent to comply within the compliance period (Section 5).
- Failure to comply with the Order results in denial/rejection of the EP, MA, or FTAA application(s), as deemed appropriate by the Bureau/Regional Office (Section 5).
Effectivity and publication rule
- The Order takes effect fifteen (15) days following its complete publication in a newspaper of general circulation (Section 6).