IRR of RA 7942

Policy and objectives

All mineral resources in public and private lands within the territory and exclusive economic zone of the Republic of the Philippines are owned by the State.
The State must promote rational exploration, development, utilization, and conservation of mineral resources through combined government and private-sector efforts.
Development must safeguard the environment and protect the rights of affected communities (Section 2).
The rules aim to promote mineral development under full State control and supervision (Section 3(a)).
The rules aim to enhance mineral resources’ contribution to economic recovery and national development while giving due regard to environmental protection and affected communities and development of local science and technical resources (Section 3(b)).
The rules aim to promote equitable access to economically efficient development and fair sharing of benefits and costs (Section 3(c)).
The rules aim to enable the Government and the investor to recover their share in production/utilization/processing to attain sustainable development, with environmental protection, social equity, and fair return of investment (Section 3(d)).

Definitions established

“The Act” refers to Republic Act No. 7942, the Philippine Mining Act of 1995 (Section 4(a)).
“Annual Environmental Protection and Enhancement Program (AEPEP)” is a yearly environmental management work plan based on the approved environmental protection and enhancement strategy (Section 4(c)).
“Block or Meridional Block” is an area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of longitude, containing approximately eighty-one (81) hectares (Section 4(e)).
“Bureau” means the Mines and Geosciences Bureau under the DENR (Section 4(f)).
“Commercial Production” means mineral production sufficient to sustain economic viability, reckoned from the date of commercial operation as declared by the contractor or as stated in the feasibility study, whichever comes first (Section 4(g)).
“Contiguous Zone” is water, sea bottom and substratum measured twenty-four (24) nautical miles seaward from the baseline (Section 4(i)).
“Contract Area” means the land or body of water delineated under a mineral agreement or FTAA, subject to the relinquishment obligations, and defined by longitude and latitude (Section 4(j)).
“Contractor” means a qualified person acting alone or in consortium who is a party to a mineral agreement or FTAA (Section 4(k)).
“Financial or Technical Assistance Agreement (FTAA)” is a contract involving financial or technical assistance for large scale exploration, development, and utilization (Section 4(z)).
“Exclusive Economic Zone” is the water, sea bottom, and subsurface measured from the baseline of the Philippine Archipelago up to two hundred (200) nautical miles offshore (Section 4(w)).
“Environmental Compliance Certificate (ECC)” certifies that the project will not bring about an unacceptable environmental impact and that the proponent complied with the requirements of the Environmental Impact Statement System (Section 4(s)).
“Environmental Impact Assessment (EIA)” is a process of identifying and predicting project impacts on the physical/cultural/biological environment and on health and well-being, recommending mitigating measures, and interpreting/communicating information so it can be utilized (Section 4(t)).
“Environmental Impact Statement (EIS)” identifies, predicts, interprets, and communicates information on changes in environmental quality and examines alternatives and their impacts (Section 4(u)).
“Force Majeure” covers acts/circumstances beyond reasonable control, including war, rebellion, insurrection, riot, civil disturbance, blockade, sabotage, embargo, strike, lockout, disputes with surface owners and other labor disputes, epidemic, earthquake, storm, flood, other adverse weather conditions, explosion, fire, adverse action by government or instrumentalities, act of God, or any cause not described over which the affected party has no reasonable control (Section 4(aa)).
“Gross Output” is the actual market value of minerals or mineral products from each mine/miner’s land operated as a separate entity, without deductions for specified mining/processing/transporting/handling/marketing expenses, with limited deductions where minerals are sold/consigned abroad under C.I.F. terms and special valuation rules for certain mineral concentrates not traded in commodity exchanges (Section 4(ad)).
“Qualified Person” is any Filipino citizen with capacity to contract, or a corporation/partnership/association/cooperative organized for mining with technical and financial capability, registered in accordance with law with at least sixty percentum (60%) Filipino ownership; a legally organized foreign-owned corporation is deemed qualified for limited purposes (Section 4(bk)).
“Royalty” means any payment over and above other existing taxes for utilization of minerals within a mineral reservation, indigenous cultural community, or in areas covered by small-scale mining (Section 4(bq)).
“Secretary” means the Secretary of DENR (Section 4(bs)).

Government authority and enforcement

The DENR through the Secretary is the primary government agency responsible for conservation, management, development, and proper use of the State’s mineral resources, including those in reservations, watershed areas, and public-domain lands (Section 5(a)).
The Secretary may enter into mineral agreements on behalf of the Government or recommend FTAA to the President upon recommendation of the Director (Section 5(b)).
The Secretary may promulgate rules and regulations necessary to implement the intent and provisions of Republic Act No. 7942 (Section 5(c)).
The Secretary enforces applicable related laws such as the Administrative Code and Civil Code (Section 5(d)).
The Secretary may delegate authority and powers/functions to the Director (Section 5(e)).

Bureau functions and mining records system

The Mines and Geosciences Bureau (as a line bureau) has direct charge in administration and disposition of mineral lands and resources (Section 6(a)).
The Bureau conducts geological, mining, metallurgical, chemical, and other researches and geological/mineral exploration surveys (Section 6(b)).
The Bureau may confiscate surety, performance, and guaranty bonds after notice of compliance (Section 6(c)).
The Bureau recommends the granting of mineral agreements to the Secretary and endorses FTAAs to the Secretary for Presidential action, monitors contractor compliance, and establishes an efficient monitoring system (Section 6(d)).
The Bureau may deputize, when necessary, members or units of the Philippine National Police, barangay, accredited NGOs, or qualified persons to police all mining activities (Section 6(e)).
The Director enforces applicable related laws such as the Administrative Code and Civil Code (Section 6(f)).
The Director may delegate authority and powers/functions to the Regional Director (Section 6(g)).

Recording system, fees, archive, gazette

A Mining Recorder unit exists in Bureau and its Regional and other offices to receive, record, and manage mining documents relating to mining rights; the unit may be established in Provincial Governor/City Mayor offices (Section 7).
Documents for mineral reservations applications for mineral agreements, FTAAs exploration permits, and small-scale mining permits are registered at the Bureau (Section 7).
Documents outside mineral reservations, and industrial sand and gravel permits covering more than five (5) hectares, are registered at Regional Offices (Section 7).
Quarry permits, sand and gravel permits (including industrial sand and gravel permits of five (5) hectares or less), guano permits, gemstone gathering permits, and small-scale mining permits outside mineral reservations are registered at the Provincial Governor’s or City Mayor’s office where the applied area is located (Section 7).
The Mining Recorder unit performs: pre-processing; documentary compliance review; fee computation; recording; status information; data input into mining rights management system; recordholding; issuing certifications/copies; follow-up compliance; and area verification/projection against conflicts (Section 7(a)-(i)).
A mining register is a hardbound logbook for chronologically recording documents received by the Mining Recorder (Section 8).
Separate mining registers exist for specified categories of mining rights applications and mining rights involving those rights, and for specified miscellaneous documents affecting mining rights (Section 8).
Applications for mining rights are recorded with: application number; date and time of filing; applicant/proponent name; location; area in blocks/hectares; official receipt number; and amount paid (Section 8).
For approved mining rights, contract/permit number and contractor/permit-holder name are recorded in lieu of application number/applicant name (Section 8).
Miscellaneous documents are recorded with: date and time of filing; document/application number; entity involved; document title; page number; book number; year series; amount paid; and official receipt number (Section 8).
Required administrative fees must be paid before any listed documents can be registered, and payment details must be recorded in the appropriate mining register based on rates in Annex 4-A (Section 9).
After documentary compliance and fee payment, documents are recorded immediately in black ink in the appropriate mining register (Section 10).
Copies of applications and supporting documents are compiled and bound in durable folders/boxes in chronological order with consecutive page numbering and a maintained document inventory report from marked page number 1 with a unique document control number (Section 10).
Regional Offices submit an annual document inventory report to the Bureau to guide retrieval and reconstruction in case of loss (Section 10).
Miscellaneous documents are compiled by type, numbered consecutively by receipt order, and bound starting from Book 1 with, where practicable, two hundred-fifty (250) documents per book; inventory reports for each book are provided annually to the Bureau (Section 10).
Original miscellaneous documents are kept as restricted files inaccessible to unauthorized persons; photocopies/duplicates are kept as working copies for public use (Section 10).
Duplicate copies of miscellaneous documents must be sent to the Bureau within thirty (30) days from the date of registration for archiving, subject to a certified photocopy alternative if duplicates are absent (Section 10).
A national mining document archive is established at the Bureau and maintained by the Mining Recorder; it files original/duplicate copies transmitted by Regional Offices to replicate regional records, using control numbers and marked page numbers to guide filing (Section 11).
Microfilm or digital copies may replace paper records if available, and the Bureau plans and acquires efficient and appropriate archiving technology (Section 11).
A computer-based mining rights management system is established and maintained by the Bureau and Regional Offices to guide and expedite processing, build a national database, and produce reports/maps and interface with other mining-industry systems; standards and training/documentation are established and maintained, including system documentation and a user’s manual (Section 12).
A mineral resources database system is established at the Bureau and other DENR bureaus/offices to record exploration and related data for repository purposes for national and regional policy/planning, monitoring, and research, and designed to be accessed through the mining rights management system and other systems (Section 13).
A mineral gazette of nationwide circulation is organized and established by the Bureau as an official medium for mining policy issuances, rules/regulations, listings of mining rights and locations on the map, official acts affecting mining, and other relevant information (Section 14).
The mineral gazette must be published at least annually and made available to specified DENR and public libraries and offices, including U.P. Law Center and the National Library, and it must be available for public subscription at a reasonable price (Section 14).
The Director and Regional Directors ensure adequate annual budget allocation for filing/recording, mineral gazette publication, development/operation/maintenance of the mining rights management system, mineral resources database system, and other mining-industry systems the Bureau establishes or acquires (Section 16).
Funds must include capital outlay for software/hardware/support equipment and upgrades, and support for troubleshooting, in-house training, repairs/upgrading, supplies, external training, subscription services, and communication services for data exchange/coordination (Section 16).

Areas open and closed to mining applications

The following areas are open to mining applications: (a) public/private lands not covered by valid and existing mining rights and applications; (b) lands covered by expired/abandoned/cancelled mining/quarrying rights; (c) mineral reservations; and (d) timber or forestlands as defined in existing laws (Section 16).
Mining applications are not allowed in military and other government reservations unless there is prior written clearance by the jurisdictional government agency (Section 17(a)).
Mining applications are not allowed near or under specified critical sites and infrastructure, including buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams, other infrastructure projects, and plantations/valuable crops, except with written consent of the jurisdictional government agency or private entity subject to Bureau technical evaluation/validation (Section 17(b)).
Mining applications are not allowed in areas covered by valid and existing mining rights (Section 17(c)).
Mining applications are not allowed in areas covered by existing mining applications (Section 17(d)).
Mining applications are not allowed in areas expressly prohibited by law (Section 17(e)).
Mining applications are not allowed in areas covered by small-scale mining under R.A. No. 7076 / P.D. No. 1899 unless with prior consent of the small-scale miners, in which case a royalty payment must be agreed upon and the royalty forms a trust fund for socio-economic development of the concerned community (Section 17(f)).
Mining applications are not allowed in old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial/municipal forest parks, greenbelts, game refuge, bird sanctuaries, areas proclaimed as tourist zones as defined by law, and areas under NIPAS under R.A. No. 7586, Department Administrative Order No. 25, Series of 1992, and other laws (Section 17(g)).
Mining applications are not allowed in areas the Secretary may include based on proper assessments of environmental impacts and implications on sustainable land uses (Section 17(h)).

Ancestral lands consent and royalty trust

In areas covered by ancestral lands/domains related to existing civil reservations and existing certificates of ancestral domain claims, or covered by certificates/arrangements under future relevant legislation, mining applications may be allowed but cannot be granted without prior consent of the concerned indigenous cultural community (Section 18).
If ancestral land is opened for mining operations, parties must agree on the royalty payment for the indigenous cultural community (Section 18).
The Bureau and the Office of Cultural Communities may mediate between the indigenous cultural community and the contractor/permittee regarding royalty negotiation (Section 18).
The agreed royalty forms part of a trust fund for socio-economic well-being of the indigenous cultural community (Section 18).

Mineral reservations establishment and boundaries

For establishing, disestablishing, or modifying mineral reservation boundaries, the Director must conduct public hearings allowing all affected sectors and communities, interested NGOs/people’s organizations, and local government units to air views (Section 19).
The public must be notified by publication in a newspaper of general circulation in the province and by posting in all affected municipalities and barangays at least thirty (30) days before the public hearings (Section 19).
The Director’s recommendation must be in writing stating grounds for establishing/disestablishing/modifying specific mineral reservation boundaries and must be published after submission with the Secretary (Section 19).
No Director recommendation may be acted upon by the Secretary unless strictly complied with (Section 19).
Upon Director recommendation through the Secretary, the President may set aside and establish an area as a mineral reservation subject to valid and existing rights, when national interest requires preservation of strategic raw materials or certain minerals for scientific, cultural, or ecological value (Section 19).
The Secretary must cause periodic review of existing mineral reservations by detailed geological, mineral, and ecological evaluation; upon Secretary recommendation, the President may alter/modify boundaries by proclamation or revert the area to the public domain without prejudice to prior existing rights (Section 19).
The Secretary must cause publication of establishment/disestablishment/modification once a week for two (2) consecutive weeks in a newspaper of general circulation and in a newspaper of popular local circulation covering the area, and must also announce in a local popular radio program (Section 19).
Before Presidential approval, any opposition filed within thirty (30) days from the last publication date must be resolved by the Office of the President (Section 19).
Submerged lands within the archipelagic sea, contiguous zone, and Exclusive Economic Zone are considered mineral reservations (Section 19).
In proclamations of mineral reservations, all valid and existing mining/quarrying rights are respected (Section 19).

Other government reservations

For reserved lands other than mineral reservations, the Department may directly undertake exploration, development, and utilization of mineral resources (Section 20).
If the Department cannot undertake such activities, a qualified person may undertake them, but the right to develop and utilize minerals found must be awarded by the President on terms/conditions recommended by the Director and approved by the Secretary (Section 20).
The right is granted only after exploration activities reveal economically potential deposits (Section 20).
The party that undertook exploration receives priority (Section 20).

Mining within reservations and small-scale rules

Mining operations in existing mineral and other government reservations must be undertaken by the Department or through a qualified person under any of the following modes: exploration permit, mineral agreement, FTAA, small scale mining, and quarry permit (Section 21).
Applications for exploration permit/mineral agreement/FTAA/quarry permit within mineral and other government reservations are governed by Chapters VII, VIII, IX, and XII (Section 21).
Mining operations in government reservations other than mineral reservations must first be undertaken through an exploration permit, subject to limitations, before the area is opened for mineral agreement/FTAA or other mining rights applications (Section 21).
For small-scale mining inside mineral reservations, the rules in MRDB A.O. No. 3, Series of 1984 and MRDB A.O. No. 3-A, Series of 1986 govern (Section 22).
A small-scale mining cooperative under R.A. No. 7076 receives preferential right to apply for a small-scale mining agreement covering a maximum aggregate area of twenty-five percentum (25%) of such mineral reservation, subject to valid and existing mining/quarrying rights (Section 22).

Royalty payment for minerals from reservations

Contractors and holders of mining rights must pay a royalty to the Bureau of not less than five percentum (5%) of the market value of gross output of minerals/mineral products extracted or produced from a mineral reservation, exclusive of all other taxes (Section 23).
A ten percentum (10%) share of all royalties, administrative fees, clearance fees, exploration fees, and other related fees derived by the Government from development and utilization within mineral reservations accrues to the Bureau as a trust fund.
The trust fund is deposited in a government depository bank to be allotted for special projects and other administrative expenses related to exploration, development, and environmental management of minerals in other government reservations (Section 23).

Exploration permits: application and filing

Exploration activities may be undertaken by the Bureau directly or on behalf of the contractor subject to reimbursement of all expenditures (Section 24).
If the Bureau cannot undertake exploration activities, qualified persons may undertake exploration in specified areas within government and non-government reservations (Section 24).
A qualified person may apply for an exploration permit (MGB Form No. 7-1) with the concerned Regional Office, except offshore exploration permit applications, which are filed with the Bureau (Section 25).
Exploration permit applications must be filed with payment of required fees (Annex 4-A) and submission of five (5) sets of requirements (Section 25).
If the area falls within a government reservation, the applicant must submit clearance from the concerned government agency (Section 25(a)).
Applicants must provide a location map/sketch plan using NAMRIA topographic maps at a scale of 1:50,000 showing geographic coordinates and boundaries (Section 25(b)).
Applicants must submit a Work Program and Financial Plan covering the two-year period prepared by a licensed geologist or mining engineer (Section 25(c)).
Applicants must submit an Environmental Work Program (EWP) including assessment of potential environmental effects and mitigating measures as provided in Section 184(c) of the IRR of the Act (Section 25(d)).
Applicants must submit proof of technical capability including list of technical personnel and their bio-data (Section 25(e)).
Applicants must submit proof of financial capability to undertake the two-year work program:
- For individuals: statement of assets and liabilities duly sworn and income tax return for the preceding year (Section 25(f)(1)).
- For corporations/associations/cooperatives/partnerships: financial statement and annual report of the preceding year (Section 25(f)(2)).
Applicants must submit articles of incorporation or partnership and by-laws duly certified by the SEC for corporations/associations/cooperatives/partnerships (Section 25(g)).
Applicants must submit other supporting papers required by the Bureau or submitted by the proponent (Section 25(h)).
Offshore exploration applications additionally require: survey vessel/platform details; registration certification with NAMRIA for “Notice to Mariners” updates; safety measures to ensure navigation safety and prevent accident; undertaking to accommodate other marine activities; and agreements on identifying installations, notifying the Bureau thirty (30) days prior to removal of installations/equipment, and allowing Bureau authorized personnel and the Philippine Coast Guard to board during reasonable hours while within the Philippine EEZ (Section 25 additional requirements(a)-(d)).

Exploration permit renewal, limits, posting, approval

A permittee may apply for renewal within sixty (60) days before expiration by submitting to the Director, copy furnished to the concerned Regional Director, and two (2) sets of requirements (Section 26).
Renewal must be supported by: justification; comprehensive validated technical report on outcomes and environmental effects for the two-year exploration prepared by a licensed professional; audited expenditures report; and work program and financial plan prepared by a licensed professional (Section 26(a)-(d)).
The Secretary may grant renewal after field verification by the Bureau/concerned Regional Office (Section 26).
Maximum areas a qualified person may apply/hold at any time are:
- Onshore in any one province: individuals twenty (20) blocks (1,620 hectares); partnerships/corporations/cooperatives/associations two hundred (200) blocks (16,200 hectares) (Section 27(a)).
- Onshore in the entire Philippines: individuals forty (40) blocks (3,240 hectares); partnerships/corporations/cooperatives/associations four hundred (400) blocks (32,400 hectares) (Section 27(b)).
- Offshore beyond five hundred meters (500 m) from mean low tide across the entire Philippines: individuals one hundred (100) blocks (8,100 hectares); partnerships/corporations/cooperatives/associations one thousand (1,000) blocks (81,000 hectares) (Section 27(c)).
Upon filing, an exploration permit applicant must post a summary of its application for at least thirty (30) days in bulletin boards of affected provinces and municipalities; furnish barangays in a language generally understood; and publish once a week for two (2) consecutive weeks in a newspaper of general circulation in the affected area (Section 28).
The application summary must include: applicant name and complete address; permit duration; nature and extent of exploration; area location; geographic coordinates; location map/sketch plan with index map relative to nearest municipalities; and advice that opposing parties must file a written complaint with the Panel of Arbitrators through the Director or concerned Regional Office (Section 28).
Oppositions/adverse claims must be filed within forty-five (45) days from the last date of posting/publication (Section 28).
No exploration permit may be issued unless posting/publication is complied with and all issues raised by opponents are dealt with in writing by the Director (Section 28).
After documentary review and clearance from conflict, the Director (within mineral reservations) or the Regional Director (outside mineral reservations) must approve and issue the exploration permit within thirty (30) days from such finding, and cause registration after payment of required fees (Annex 4-A) (Section 29).
For renewals, the Secretary issues the exploration permit (MGB Form No. 7-2) within thirty (30) days from the recommendation of the Director (Section 29).

Exploration permit terms, reports, relinquishment

An exploration permit grants exploration subject to valid prior and existing rights; offshore exploration must comply with UNCLOS (Section 30(a)).
Exploration rights are for the exclusive use and benefit of the permittee or authorized representative and cannot be used for purposes other than exploration (Section 30(b)).
The permit period is not exceeding two (2) years from date of issuance, renewable for two (2) years each, but total duration cannot exceed six (6) years, provided the permittee complies and has no violations (Section 30(c)).
Permittee reporting requirement: within thirty (30) days after each semester, the permittee must submit a sworn report of work done including survey results, laboratory reports, geological reports/maps, EWP implementation, expenditures showing discrepancies/deviations with approved plans/programs, and proposed expenditures/budget; this is subject to semi-annual inspection/verification at the permittee’s expense (Section 30(d)).
Relinquishment requirement: the permittee must relinquish at least twenty percent (20%) of the remaining permit