Law Summary
State Ownership and Policy
- All mineral resources in Philippine territory and exclusive economic zone are owned by the State.
- The State is responsible for promoting rational mining activities.
- Emphasis on environmental protection and community rights.
Governing Principles
- Implements sustainable development balancing present and future needs.
- Mining is a temporary land use with progressive rehabilitation.
- Mining activities must follow best environmental practices.
- Equitable wealth generation and community benefits required.
- Investments in mining encouraged aligning with government policies.
Objectives
- Promote rational mineral resource development under State control.
- Enhance contribution to economic growth with environmental and social safeguards.
- Encourage investments to ensure steady mineral supply and generate wealth.
- Ensure fair sharing of benefits and costs among stakeholders.
Key Definitions
- Detailed definitions including mineral types, permits, agencies, Indigenous Cultural Communities, environmental terms, various types of mining agreements, and government agencies.
Government Management
- DENR has primary authority over mineral resources and mining activities.
- Mines and Geosciences Bureau (MGB) implements the Act.
- MGB powers include mineral land administration, research, enforcement, permitting, and monitoring.
- Local Government Units have roles including permit approvals for small-scale mining, ensuring public participation, and receiving revenue shares.
Mineral and Government Reservations
- Mineral Reservations established/reviewed with public consultations.
- Government Reservations exploration by DENR or Qualified Person.
- Mining operations in such areas regulated through permits and agreements.
- Small-scale mining cooperatives favored with preferential rights.
- Contractors pay royalties with specified portions allocated for environmental projects.
Area Open and Closed to Mining
- Open: lands not covered by valid rights, expired claims, mineral and timber lands.
- Closed: valid existing rights, protected forests, parks, critical watersheds, and other environmentally sensitive areas.
- Conditional openings require government clearances.
- Ancestral lands require prior informed consent before mineral agreements.
Exploration Permit
- Term: 2 years, renewable up to 6 years with compliance.
- Area limits set by block measures.
- Application requires work program, environmental plans, technical and financial proof.
- Procedures involve area clearance, public notice, and possible opposition proceedings.
- Obligations include reports, area relinquishments, environmental compliance.
Mineral Agreements
- Types: Mineral Production Sharing Agreement, Co-Production Agreement, Joint Venture.
- Applicants must be Qualified Persons with Filipino ownership requirements.
- Area and term limits provided with 25 years maximum plus renewal.
- Application includes maps, work plans, environmental and technical documents.
- Terms cover environmental compliance, local preference, technology use, reporting, community relations.
- Transfer, assignment, conversion, withdrawal procedures specified.
Financial or Technical Assistance Agreement (FTAA)
- For large-scale mining of specified metallic minerals (excluding stone aggregates).
- Area and term limits greater than Mineral Agreements.
- Application requires extensive documentation including certified incorporation, technical, financial, environmental info.
- A Negotiating Panel evaluates and recommends approval to the President.
- Terms include minimum expenditures, technology, community, environmental and labor conditions.
- Procedures for transfer, assignment, withdrawal, and cancellation detailed.
Quarry Operations and Permits
- Various permits for quarry, sand and gravel, guano, gemstone extraction.
- Administered by Provincial/City Mining Regulatory Boards.
- Area and term limits specified.
- Applications require environmental compliance, technical and financial capability.
- Terms require environmental safeguards, reporting, payment of fees and taxes.
Small-Scale Mining
- Governed by specific rules and administrative orders.
- Permits filed with local and DENR offices depending on area.
Surface Rights
- Easements and entry rights granted upon payment of just compensation.
- Voluntary agreements encouraged and honored.
- Compensation for damages due and dispute resolution through Panel of Arbitrators.
- Bond posting required for disturbances.
Mineral Processing Permits
- Required for mineral processing except for small-scale miners and those with approved work programs.
- Term of 5 years, renewable.
- Applications require incorporation documents, feasibility studies, environmental compliance, technical and financial proof.
- Reporting and environmental conditions mandatory.
Transport of Minerals
- Requires Ore Transport Permit except for minor samples.
- Lack of permits is prima facie evidence of illegal mining.
- Arrest and confiscation powers vested to authorized officers.
- Procedures for detention, documentation, custody, filing complaints, disposition of seized materials established.
Accreditation of Traders and Processors
- Required for all trading not covered by mining rights.
- Applications require legal source proofs, DTI registration.
- Certificates issued with two-year terms.
Community and Technology Development
- Contractors must contribute at least 1% of mining/milling costs to community and technology development.
- Activities credited to these contributions include social infrastructure, training, research and livelihood projects.
- Contractors to give preference to Filipino goods, services, and labor.
Mine Safety and Health
- Compliance with Mine Safety Rules mandatory.
- Service contractors require accreditation.
- Submission of safety programs and inspections required.
- Registration and qualifications for safety engineers and inspectors stipulated.
- Mine laborage restrictions applied.
Environmental Protection
- Mining to be conducted sustainably with environmental safeguards.
- Environmental Work Program (EWP) and Environmental Protection and Enhancement Program (EPEP) required.
- Monitoring, auditing, and compliance systems in place.
- Suspension powers for environmental violations authorized.
- Recognition of exemplary environmental performance.
Environmental Impact Assessments
- EMB and DENR coordinate on Environmental Impact Statement (EIS) and Initial Environmental Examination (IEE) processing.
- EPEP is part of Environmental Compliance Certificate requirements.
- Penalties for non-compliance.
Contingent Liability and Rehabilitation Fund
- Mine Rehabilitation Fund (MRF) instituted for progressive rehabilitation assurances.
- Includes Monitoring Trust Fund and Rehabilitation Cash Fund.
- Multi-agency committees oversee MRF.
- Payments from mine waste and tailings fees collected and reserved.
- Compensation for damage claims administered from these funds.
Conflict Resolution
- Panel of Arbitrators established with exclusive jurisdiction on mining disputes.
- Procedures for filing adverse claims, protests and oppositions specified.
- Decisions are appealable to Mines Adjudication Board.
Mines Adjudication Board
- Composed of Secretary (Chair), Director and Undersecretary for Field Operations.
- Has quasi-judicial powers for mining disputes.
- Appeals from Panel of Arbitrators processed here.
- Supreme Court review possible.
Government Share and Revenue
- Government receives excise tax and shares from Mineral Production Sharing Agreements and other agreements.
- Shares determined by factored negotiations considering capital, risks, economy impact.
- Payment and allocation regulated.
Taxes and Fees
- Income and excise taxes required by law.
- Occupation fees based on area applicable inside and outside Mineral Reservations.
- Fees paid to local or Bureau Treasurer with specified allocations.
Incentives
- Investment incentives under EO 226 and other laws apply.
- Tax exemptions for pollution control devices.
- Income tax benefits for losses and accelerated depreciation allowed within conditions.
- Restrictions on switching between incentives.
- Confidentiality and repatriation rights for foreign investors guaranteed.
Cancellation, Revocation, Termination
- Grounds include violation of terms, non-payment of taxes, fraud or misrepresentation.
- Incentives may be suspended or cancelled.
- Procedures for effect upon expiration or cancellation provided.
Surveying of Mining Areas
- Technical survey system with specified monument placements and measurements.
- Survey returns with detailed computation and mapping required.
- Surveys may be delegated to deputized engineers with bond.
- Field verification procedures and timelines set.
Bureau Drilling Services
- Bureau may conduct diamond drilling upon initiative/request.
- Leasing of Bureau drilling equipment under specified terms and surety bond.
- Rentals accrue to drilling fund for equipment maintenance.
Bureau Services and Fee Schedule
- Bureau may perform survey, investigation, and analytical work for fees.
- Fees applied regardless of requester type.
- Confidentiality of results, except after 2 years or approval.
Recording System and Mineral Gazette
- Established mining recorder units with registries and archiving.
- Comprehensive system for mining document management including digital databases.
- Mineral Gazette to publish official mining info annually.
Reporting and Fines
- Regular submission of monthly, quarterly, and annual reports on mining activities mandated.
- Non-compliance incurs graduated fines with possible permit cancellation.
Transitory and Miscellaneous Provisions
- Recognition and continuity of valid mining rights upon effectivity.
- Preferential rights for existing claimholders under transition rules.
- Authority to amend regulations to ensure effective enforcement.
- Separability clause and repeal of inconsistent orders.
This comprehensive framework governs mining activities in the Philippines, ensuring sustainable development, state control, environmental protection, community involvement, and transparent regulation and administration
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