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REPUBLIC ACT NO. 7942 March 3, 1995

AN ACT INSTITUTING A NEW SYSTEM O MINERAL RESOURCES E!PLORATION,

"E#ELOPMENT, UTILI$ATION, AN" CONSER#ATION

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

C%APTER IINTRO"UCTORY PRO#ISIONS

S&c'()* 1

T('+&

This Act shall be known as the "Philippine Mining Act of 1995."

S&c'()* 2

"&c+ara'()* ) P)+(c-

All mineral resources in public and private lands within the territor and e!clusive economic one of the #epublic of

the Philippines are owned b the $tate. %t shall be the responsibilit of the $tate to promote their rational e!ploration&

development& utiliation and conservation through the combined efforts of government and the private sector in order

to enhance national growth in a wa that effectivel safeguards the environment and protect the rights of affected

communities.

S&c'()* 3

"&(*('()* ) T&r/

As used in and for purposes of this Act& the following terms& whether in singular or plural& shall mean'

a. Ancestral lands refers to all lands e!clusivel and actuall possessed& occupied& or utilied b indigenous

cultural communities b themselves or through their ancestors in accordance with their customs and traditions

since time immemorial& and as ma be defined and delineated b law.

b. (lock or meridional block means an area bounded b one)half *1+,- minute of latitude and one)half *1+,-

minute of longitude& containing appro!imatel eight)one hectares *1 has.-.

c. (ureau means the Mines and /eosciences (ureau under the 0epartment of nvironment and 2atural

#esources.

d. 3arring capacit refers to the capacit of natural and human environments to accommodate and absorb

change without e!periencing conditions of instabilit and attendant degradation.

e. 3ontiguous one refers to water& sea bottom and substratum measured twent)four nautical miles *,4 n.m.-

seaward from the base line of the Philippine archipelago.

f. 3ontract area means land or bod of water delineated for purposes of e!ploration& development& or

utiliation of the minerals found therein.

g. 3ontractor means a ualified person acting alone or in consortium who is a part to a mineral agreement or

to a financial or technical assistance agreement.

h. 3o)production agreement *3A- means an agreement entered into between the /overnment and one or more

contractors in accordance with $ection ,6*b- hereof.i. 0epartment means the 0epartment of nvironment and 2atural #esources.

7. 0evelopment means the work undertaken to e!plore and prepare an ore bod or a mineral deposit for

mining& including the construction of necessar infrastructure and related facilities.

k. 0irector means the 0irector of the Mines and /eosciences (ureau.

l. cological profile or eco)profile refers to geographic)based instruments for planners and decision)makers

which presents an evaluation of the environmental ualit and carring capacit of an area.

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m. nvironmental compliance certificate *33- refers to the document issued b the government agenc

concerned certifing that the pro7ect under consideration will not bring about an unacceptable environmental

impact and that the proponent has complied with the reuirements of the environmental impact statement

sstem.

n. nvironmental impact statement *%$- is the document which aims to identif& predict& interpret& and

communicate information regarding changes in environmental ualit associated with a proposed pro7ect and

which e!amines the range of alternatives for the ob7ectives of the proposal and their impact on the

environment.

o. !clusive economic one means the water& sea bottom and subsurface measured from the baseline of the

Philippine archipelago up to two hundred nautical miles *,88 n.m.- offshore.

p. !isting mining+uarring right means a valid and subsisting mining claim or permit or uarr permit or

an mining lease contract or agreement covering a mineralied area granted+issued under pertinent mining

laws.

. !ploration means the searching or prospecting for mineral resources b geological& geochemical or

geophsical surves& remote sensing& test pitting& trenching& drilling& shaft sinking& tunneling or an other

means for the purpose of determining the e!istence& e!tent& uantit and ualit thereof and the feasibilit of

mining them for profit.

r. inancial or technical assistance agreement means a contract involving financial or technical assistance for

large)scale e!ploration& development& and utiliation of mineral resources.

s. orce ma7eure means acts or circumstances beond the reasonable control of contractor including& but not

limited to& war& rebellion& insurrection& riots& civil disturbance& blockade& sabotage& embargo& strike& lockout&

an dispute with surface owners and other labor disputes& epidemic& earthuake& storm& flood or other adverse

weather conditions& e!plosion& fire& adverse action b government or b an instrumentalit or subdivision

thereof& act of /od or an public enem and an cause that herein describe over which the affected part has

no reasonable control.

t. oreign)owned corporation means an corporation& partnership& association& or cooperative dul registered

in accordance with law in which less than fift per centum *58:- of the capital is owned b ilipino citiens.

u. /overnment means the government of the #epublic of the Philippines.

v. /ross output means the actual market value of minerals or mineral products from its mining area as definedin the 2ational %nternal #evenue 3ode.

w. %ndigenous cultural communit means a group or tribe of indigenous ilipinos who have continuousl

lived as communities on communall)bounded and defined land since time immemorial and have succeeded

in preserving& maintaining& and sharing common bonds of languages& customs& traditions& and other distinctive

cultural traits& and as ma be defined and delineated b law.

!. ;oint venture agreement *;

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ae. Mining area means a portion of the contract area identified b the contractor for purposes of development&

mining& utiliation& and sites for support facilities or in the immediate vicinit of the mining operations.

af. Mining operation means mining activities involving e!ploration& feasibilit& development& utiliation& and

processing.

ag. 2on)governmental organiation *2/=- includes nonstock& nonprofit organiations involved in activities

dealing with resource and environmental conservation& management and protection.

ah. 2et assets refers to the propert& plant and euipment as reflected in the audited financial statement of thecontractor net of depreciation& as computed for ta! purposes& e!cluding appraisal increase and construction in

progress.

ai. =ffshore means the water& sea bottom and subsurface from the shore or coastline reckoned from the mean

low tide level up to the two hundred nautical miles *,88 n.m.- e!clusive economic one including the

archipelagic sea and contiguous one.

a7. =nshore means the landward side from the mean tide elevation& including submerged lands in lakes& rivers

and creeks.

ak. =re means a naturall occurring substance or material from which a mineral or element can be mined

and+or processed for profit.

al. Permittee means the holder of an e!ploration permit.

am. Pollution control and infrastructure devices refers to infrastructure& machiner& euipment and+or

improvements used for impounding& treating or neutraliing& precipitating& filtering& conveing and cleansing

mine industrial waste and tailings as well as eliminating or reducing haardous effects of solid particles&

chemicals& liuids or other harmful bproducts and gases emitted from an facilit utilied in mining

operations for their disposal.

an. President means the President of the #epublic of the Philippines.

ao. Private land refers to an land belonging to an private person which includes alienable and disposable

land being claimed b a holder& claimant& or occupant who has alread acuired a vested right thereto under

the law& although the corresponding certificate or evidence of title or patent has not been actuall issued.

ap. Public land refers to lands of the public domain which have been classified as agricultural lands and

sub7ect to management and disposition or concession under e!isting laws.a. >ualified person means an citien of the Philippines with capacit to contract& or a corporation&

partnership& association& or cooperative organied or authoried for the purpose of engaging in miring& with

technical and financial capabilit to undertake mineral resources development and dul registered in

accordance with law at least si!t per centum *68:- of the capital of which is owned b citiens of the

Philippines' Provided& That a legall organied foreign)owned corporation shall be deemed a ualified person

for purposes of granting an e!ploration permit& financial or technical assistance agreement or mineral

processing permit.

ar. >uarring means the process of e!tracting& removing and disposing uarr resources found on or

underneath the surface of private or public land.

as. >uarr permit means a document granted to a ualified person for the e!traction and utiliation of uarr

resources on public or private lands.at. >uarr resources refers to an common rock or other mineral substances as the 0irector of Mines and

/eosciences (ureau ma declare to be uarr resources such as& but not limited to& andesite& basalt&

conglomerate& coral sand& diatomaceous earth& diorite& decorative stones& gabbro& granite& limestone& marble&

marl& red burning clas for potteries and bricks& rholite& rock phosphate& sandstone& serpentine& shale& tuff&

volcanic cinders& and volcanic glass' Provided& That such uarr resources do not contain metals or metallic

constituents and+or other valuable minerals in economicall workable uantities' Provided& further& That non)

metallic minerals such as kaolin& feldspar& bull uart& uart or silica& sand and pebbles& bentonite& talc&

asbestos& barite& gpsum& bau!ite& magnesite& dolomite& mica& precious and semi)precious stones& and other

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non)metallic minerals that ma later be discovered and which the' 0irector declares the same to be of

economicall workable uantities& shall not be classified under the categor of uarr resources.

au. #egional director means the regional director of an mines regional office under the 0epartment of

nvironment and 2atural #esources.

av. #egional office means an of the mines regional offices of the 0epartment of nvironment and 2atural

#esources.

aw. $ecretar means the $ecretar of the 0epartment of nvironment and 2atural #esources.

a!. $pecial allowance refers to pament to the claim)owners or surface right)owners particularl during the

transition period from Presidential 0ecree 2o. 46? and !ecutive =rder 2o. ,@9& series of 19@.

a. $tate means the #epublic of the Philippines.

a. tiliation means the e!traction or disposition of minerals.

C%APTER II

GO#ERNMENT MANAGEMENT

S&c'()* 4

O0*&r/h( ) M(*&ra+ R&/)rc&/Mineral resources are owned b the $tate and the e!ploration& development& utiliation& and processing thereof shall

be under its full control and supervision. The $tate ma directl undertake such activities or it ma enter into mineral

agreements with contractors.

The $tate shall recognie and protect the rights of the indigenous cultural communities to their ancestral lands as

provided for b the 3onstitution.

S&c'()* 5

M(*&ra+ R&/&ra'()*/

Bhen the national interest so reuires& such as when there is a need to preserve strategic raw materials for industries

critical to national development& or certain minerals for scientific& cultural or ecological value& the President ma

establish mineral reservations upon the recommendation of the 0irector through the $ecretar. Mining operations in

e!isting mineral reservations and such other reservations as ma thereafter be established& shall be undertaken b the0epartment or through a contractor' Provided& That a small scale)mining cooperative covered b #epublic Act 2o.

@8@6 shall be given preferential right to appl for a small)scale mining agreement for a ma!imum aggregate area of

twent)five percent *,5:- of such mineral reservation& sub7ect to valid e!isting mining+uarring rights as provided

under $ection 11, 3hapter CC hereof. All submerged lands within the contiguous one and in the e!clusive economic

one of the Philippines are hereb declared to be mineral reservations.

A ten per centum *18:- share of all roalties and revenues to be derived b the government from the development and

utiliation of the mineral resources within mineral reservations as provided under this Act shall accrue to the Mines

and /eosciences (ureau to be allotted for special pro7ects and other administrative e!penses related to the e!ploration

and development of other mineral reservations mentioned in $ection 6 hereof.

S&c'()*

O'h&r R&/&ra'()*/

Mining operations in reserved lands other than mineral reservations ma be undertaken b the 0epartment& sub7ect to

limitations as herein provided. %n the event that the 0epartment cannot undertake such activities& the ma be

undertaken b a ualified person in accordance with the rules and regulations promulgated b the $ecretar. The right

to develop and utilie the minerals found therein shall be awarded b the President under such terms and conditions as

recommended b the 0irector and approved b the $ecretar' Provided& That the part who undertook the e!ploration

of said reservation shall be given priorit. The mineral land so awarded shall be automaticall e!cluded from the

reservation during the term of the agreement' Provided& further& That the right of the lessee of a valid mining contract

e!isting within the reservation at the time of its establishment shall not be pre7udiced or impaired.

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S&c'()* 7

P&r()(c R&(&0 ) E6(/'(* M(*&ra+ R&/&ra'()*/

The $ecretar shall periodicall review e!isting mineral reservations for the purpose of determining whether their

continued e!istence is consistent with the national interest& and upon his recommendation& the President ma& b

proclamation& alter or modif the boundaries thereof or revert the same to the public domain without pre7udice to prior

e!isting rights.

S&c'()* 8A'h)r('- ) 'h& "&ar'&*'

The 0epartment shall be the primar government agenc responsible for the conservation& management& development&

and proper use of the $tateDs mineral resources including those in reservations& watershed areas& and lands of the

public domain. The $ecretar shall have the authorit to enter into mineral agreements on behalf of the /overnment

upon the recommendation of the 0irector& promulgate such rules and regulations as ma be necessar to implement

the intent and provisions of this Act.

S&c'()* 9

A'h)r('- ) 'h& Br&a

The (ureau shall have direct charge in the administration and disposition of mineral lands and mineral resources and

shall undertake geological& mining& metallurgical& chemical& and other researches as well as geological and mineral

e!ploration surves. The 0irector shall recommend to the $ecretar the granting of mineral agreements to dul

ualified persons and shall monitor the compliance b the contractor of the terms and conditions of the mineral

agreements. The (ureau ma confiscate suret& performance and guarant bonds posted through an order to be

promulgated b the 0irector. The 0irector ma deputie& when necessar& an member or unit of the Philippine

2ational Police& baranga& dul registered non)governmental organiation *2/=- or an ualified person to police all

mining activities.

S&c'()* 1

R&()*a+ O(c&/

There shall be as man regional offices in the countr as ma be established b the $ecretar& upon the

recommendation of the 0irector.

S&c'()* 11

Pr)c&//(* ) A+(ca'()*/

The sstem of processing applications for mining rights shall be prescribed in the rules and regulations of this Act.

S&c'()* 12

Sr&-, Char'(* a* "&+(*&a'()* ) M(*(* Ar&a/

A sketch plan or map of the contract or mining area prepared b a deputied geodetic engineer suitable for publication

purposes shall be reuired during the filing of a mineral agreement or financial or technical assistance agreement

application. Thereafter& the contract or mining area shall be surveed and monumented b a deputied geodetic

engineer or bureau geodetic engineer and the surve plan shall be approved b the 0irector before the approval of the

mining feasibilit.

S&c'()* 13

M&r(()*a+ B+)c:/

or purposes of the delineation of the contract or mining areas under this Act& the Philippine territor and its e!clusiveeconomic one shall be divided into meridional blocks of one)half *1+,- minute of latitude and one)half *1+,- minute

of longitude.

S&c'()* 14

R&c)r(* S-/'&

There shall be established a national and regional filing and recording sstem. A mineral resource database sstem

shall be set up in the (ureau which shall include& among others& a mineral rights management sstem. The (ureau

shall publish at least annuall& a mineral gaette of nationwide circulation containing among others& a current list of

mineral rights& their location in the map& mining rules and regulations& other official acts affecting mining& and other

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information relevant to mineral resources development. A sstem and publication fund shall be included in the regular

budget of the (ureau.

C%APTER III

SCOPE O APPLICATION

S&c'()* 15

Sc)& ) A+(ca'()*

This Act shall govern the e!ploration& development& utiliation and processing of all mineral resources.

S&c'()* 1

O&*(* ) A*c&/'ra+ La*/ )r M(*(* O&ra'()*/

2o ancestral land shall be opened for mining)operations without prior consent of the indigenous cultural communit

concerned.

S&c'()* 17

R)-a+'- Pa-&*'/ )r I*(&*)/ C+'ra+ C)*('(&/

%n the event of an agreement with an indigenous cultural communit pursuant to the preceding section& the roalt

pament& upon utiliation of the minerals shall be agreed upon b the parties. The said roalt shall form part of a

trust fund for the socioeconomic well)being of the indigenous cultural communit.

S&c'()* 18

Ar&a/ O&* ') M(*(* O&ra'()*/

$ub7ect to an e!isting rights or reservations and prior agreements of all parties& all mineral resources in public or

private lands& including timber or forestlands as defined in e!isting laws& shall be open to mineral agreements or

financial or technical assistance agreement applications. An conflict that ma arise under this provision shall be

heard and resolved b the panel of arbitrators.

S&c'()* 19

Ar&a/ C+)/& ') M(*(* A+(ca'()*/

Mineral agreement or financial or technical assistance agreement applications shall not be allowed'

a. %n militar and other government reservations& e!cept upon prior written clearance b the governmentagenc concernedE

b. 2ear or under public or private buildings& cemeteries& archeological and historic sites& bridges& highwas&

waterwas& railroads& reservoirs& dams or other infrastructure pro7ects& public or private works including

plantations or valuable crops& e!cept upon written consent of the government agenc or private entit

concernedE

c. %n areas covered b valid and e!isting mining rightsE

d. %n areas e!pressedl prohibited b lawE

e. %n areas covered b small)scale miners as defined b law unless with prior consent of the small)scale

miners& in which case a roalt pament upon the utiliation of minerals shall be agreed upon b the parties&

said roalt forming a trust fund for the socioeconomic development of the communit concernedE and

f. =ld growth or virgin forests& proclaimed watershed forest reserves& wilderness areas& mangrove forests&

moss forests& national parks provincial+municipal forests& parks& greenbelts& game refuge and bird sanctuaries

as defined b law and in areas e!pressl prohibited under the 2ational %ntegrated Protected Areas $stem

*2%PA$- under #epublic Act 2o. @56& 0epartment Administrative =rder 2o. ,5& series of 199, and other

laws.

C%APTER I#

E!PLORATION PERMIT

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S&c'()* 2

E6+)ra'()* P&r('

An e!ploration permit grants the right to conduct e!ploration for all minerals in specified areas. The (ureau shall have

the authorit to grant an e!ploration Permit to a ualified person.

S&c'()* 21

T&r/ a* C)*('()*/ ) 'h& E6+)ra'()* P&r('

An e!ploration permit shall be for a period of two *,- ears& sub7ect to annual review and relinuishment or renewalupon the recommendation of the 0irector.

S&c'()* 22

Ma6( Ar&a/ )r E6+)ra'()* P&r('

The ma!imum area that a ualified person ma hold at an one time shall be'

a. =nshore& in an one province

1. for individuals& twent *,8- blocks' and

,. for partnerships& corporations& cooperatives& or associations& two hundred *,88- blocks.

b. =nshore& in the entire Philippines

1. for individuals& fort *48- blocksE and

,. for partnerships& corporations& cooperatives& or associations& four hundred *488- blocks.

c. =ffshore& beond five hundred meters *588m- from the mean low tide level'

1. for individuals& one hundred *188- blocksE and

,. for partnerships& corporations& cooperatives& or associations& one thousand *1&888- blocks.

S&c'()* 23

R(h'/ a* O;+(a'()*/ ) 'h& P&r(''&&

An e!ploration permit shall grant to the permittee& his heirs or successors)in)interest& the right to enter& occup and

e!plore the area' Provided& That if private or other parties are affected& the permittee shall first discuss with the said

parties the e!tent& necessit& and manner of his entr& occupation and e!ploration and in case of disagreement& a panel

of arbitrators shall resolve the conflict or disagreement.

The permittee shall undertake an e!ploration work on the area as specified b its permit based on an approved work

program.

An e!penditure in e!cess of the earl budget of the approved work program ma be carried forward and credited to

the succeeding ears covering the duration of the permit. The $ecretar& through the 0irector& shall promulgate rules

and regulations governing the terms and conditions of the permit.

The permittee ma appl for a mineral production sharing agreement& 7oint venture agreement& co)production

agreement or financial or technical assistance agreement over the permit area& which application shall be granted if the

permittee meets the necessar ualifications and the terms and conditions of an such agreement' Provided& That the

e!ploration period covered b the e!ploration permit shall be included as part of the e!ploration period of the mineral

agreement or financial or technical assistance agreement.

S&c'()* 24

"&c+ara'()* ) M(*(* Pr)

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An e!ploration permit ma be transferred or assigned to a ualified person sub7ect to the approval of the $ecretar

upon the recommendation of the 0irector.

C%APTER #

MINERAL AGREEMENTS

S&c'()* 2

M)&/ ) M(*&ra+ Ar&&&*'

or purposes of mining operations& a mineral agreement ma take the following forms as herein defined'

a. Mineral production sharing agreement is an agreement where the /overnment grants to the contractor the

e!clusive right to conduct mining operations within a contract area and shares in the gross output. The

contractor shall provide the financing& technolog& management and personnel necessar for the

implementation of this agreement.

b. 3o)production agreement is an agreement between the /overnment and the contractor wherein the

/overnment shall provide inputs to the mining operations other than the mineral resource.

c. ;oint venture agreement is an agreement where a 7oint)venture compan is organied b the /overnment

and the contractor with both parties having euit shares. Aside from earnings in euit& the /overnment shall

be entitled to a share in the gross output.A mineral agreement shall grant to the contractor the e!clusive right to conduct mining operations and to e!tract all

mineral resources found in the contract area. %n addition& the contractor ma be allowed to convert his agreement into

an of the modes of mineral agreements or financial or technical assistance agreement covering the remaining period

of the original agreement sub7ect to the approval of the $ecretar.

S&c'()* 27

E+((;(+('-

A ualified person ma enter into an of the three *?- modes of mineral agreement with the government for the

e!ploration& development and utiliation of mineral resources' Provided& That in case the applicant has been in the

mining industr for an length of time& he should possess a satisfactor environmental track record as determined b

the Mines and /eosciences (ureau and in consultation with the nvironmental Management (ureau of the

0epartment.

S&c'()* 28

Ma6( Ar&a/ )r M(*&ra+ Ar&&&*'

The ma!imum area that a ualified person ma hold at an time under a mineral agreement shall be'

a. =nshore& in an one province

1. for individuals& ten *18- blocksE and

,. for partnerships& cooperatives& associations& or corporations& one hundred *188- blocks.

b. =nshore& in the entire Philippines

1. for individuals& twent *,8- blocksE and

,. for partnerships& cooperatives& associations& or corporations& two hundred *,88- blocks.c. =ffshore& in the entire Philippines

1. for individuals fift *58- blocksE

,. for partnerships& cooperatives& associations& or corporations& five hundred *588- blocksE and

?. for the e!clusive economic one& a larger area to be determined b the $ecretar.

The ma!imum areas mentioned above that a contractor ma hold under a mineral agreement shall not include

mining+uarr areas under operating agreements between the contractor and a claimowner+lessee+permittee+licensee

entered into under Presidential 0ecree 2o. 46?.

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S&c'()* 29

(+(* a* Ar)a+ ) M(*&ra+ Ar&&&*'/

All proposed mineral agreements shall be filed in the region where the areas of interest are located& e!cept in mineral

reservations which shall be filed with the (ureau.

The filing of a proposal for a mineral agreement shall give the proponent the prior right to areas covered b the same.

The proposed mineral agreement will be approved b the $ecretar and copies thereof shall be submitted to the

President. Thereafter& the President shall provide a list to 3ongress of ever approved mineral agreement within thirt*?8- das from its approval b the $ecretar.

S&c'()* 3

A//(*&*'=Tra*/&r

An assignment or transfer of rights and obligations under an mineral agreement e!cept a financial or technical

assistance agreement shall be sub7ect to the prior approval of the $ecretar. $uch assignment or transfer shall be

deemed automaticall approved if not acted upon b the $ecretar within thirt *?8- working das from official

receipt thereof& unless patentl unconstitutional or illegal.

S&c'()* 31

W('hra0a+ r) M(*&ra+ Ar&&&*'/

The contractor ma& b giving due notice at an time during the term of the agreement& appl for the cancellation of

the mineral agreement due to causes which& in the opinion of the contractor& make continued mining operations nolonger feasible or viable. The $ecretar shall consider the notice and issue its decision within a period of thirt *?8-

das' Provided& That the contractor has met all its financial& fiscal and legal obligations.

S&c'()* 32

T&r/

Mineral agreements shall have a term not e!ceeding twent)five *,5- ears to start from the date of e!ecution thereof&

and renewable for another term not e!ceeding twent)five *,5- ears under the same terms and conditions thereof&

without pre7udice to changes mutuall agreed upon b the parties. After the renewal period& the operation of the mine

ma be undertaken b the /overnment or through a contractor. The contract for the operation of a mine shall be

awarded to the highest bidder in a public bidding after due publication of the notice thereof' Provided& That the

contractor shall have the right to eual the highest bid upon reimbursement of all reasonable e!penses of the highest

bidder.

C%APTER #I

INANCIAL OR TEC%NICAL ASSISTANCE AGREEMENT

S&c'()* 33

E+((;(+('-

An ualified person with technical and financial capabilit to undertake large)scale e!ploration& development& and

utiliation of mineral resources in the Philippines ma enter into a financial or technical assistance agreement directl

with the /overnment through the 0epartment.

S&c'()* 34

Ma6( C)*'rac' Ar&a

The ma!imum contract area that ma be granted per ualified person& sub7ect to relinuishment shall be'

a. 1&888 meridional blocks onshoreE

b. 4&888 meridional blocks offshoreE or

c. 3ombinations of a and b provided that it shall not e!ceed the ma!imum limits for onshore and offshore

areas.

S&c'()* 35

T&r/ a* C)*('()*/

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The following terms& conditions& and warranties shall be incorporated in the financial or technical assistance

agreement& to wit'

a. A firm commitment in the form of a sworn statement& of an amount corresponding to the e!penditure

obligation that will be invested in the contract area' Provided& That such amount shall be sub7ect to changes as

ma be provided for in the rules and regulations of this ActE

b. A financial guarantee bond shall be posted in favor of the /overnment in an amount euivalent to the

e!penditure obligation of the applicant for an earEc. $ubmission of proof of technical competence& such as& but not limited to& its track record in mineral

resource e!ploration& development& and utiliationE details of technolog to be emploed in the proposed

operationE and details of technical personnel to undertake the operationE

d. #epresentations and warranties that the applicant has all the ualifications and none of the disualifications

for entering into the agreementE

e. #epresentations and warranties that the contractor has or has access to all the financing& managerial and

technical e!pertise and& if circumstances demand& the technolog reuired to promptl and effectivel carr

out the ob7ectives of the agreement with the understanding to timel deplo these resources under its

supervision pursuant to the periodic work programs and related budgets& when proper& providing an

e!ploration period up to two *,- ears& e!tendible for another two *,- ears but sub7ect to annual review b

the $ecretar in accordance with the implementing rules and regulations of this Act& and further& sub7ect to the

relinuishment obligationsE

f. #epresentations and warranties that& e!cept for paments for dispositions for its euit& foreign investments

in local enterprises which are ualified for repatriation& and local supplierDs credits and such other generall

accepted and permissible financial schemes for raising funds for valid business purposes& the contractor shall

not raise an form of financing from domestic sources of funds& whether in Philippine or foreign currenc& for

conducting its mining operations for and in the contract areaE

g. The mining operations shall be conducted in accordance with the provisions of this Act and its

implementing rules and regulationsE

h. Bork programs and minimum e!penditures commitmentsE

i. Preferential use of local goods and services to the ma!imum e!tent practicableE

7. A stipulation that the contractors are obligated to give preference to ilipinos in all tpes of miningemploment for which the are ualified and that technolog shall be transferred to the sameE

k. #euiring the proponent to effectivel use appropriate anti)pollution technolog and facilities to protect the

environment and to restore or rehabilitate mined out areas and other areas affected b mine tailings and other

forms of pollution or destructionE

l. The contractors shall furnish the /overnment records of geologic& accounting& and other relevant data for its

mining operations& and that book of accounts and records shall be open for inspection b the governmentE

m. #euiring the proponent to dispose of the minerals and bproducts produced under a financial or technical

assistance agreement at the highest price and more advantageous terms and conditions as provided for under

the rules and regulations of this ActE

n. Provide for consultation and arbitration with respect to the interpretation and implementation of the termsand conditions of the agreementsE and

o. $uch other terms and conditions consistent with the 3onstitution and with this Act as the $ecretar ma

deem to be for the best interest of the $tate and the welfare of the ilipino people.

S&c'()* 3

N&)'(a'()*/

A financial or technical assistance agreement shall be negotiated b the 0epartment and e!ecuted and approved b the

President. The President shall notif 3ongress of all financial or technical assistance agreements within thirt *?8-

das from e!ecution and approval thereof.

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S&c'()* 37

(+(* a* Ea+a'()* ) (*a*c(a+ )r T&ch*(ca+ A//(/'a*c& Ar&&&*' Pr))/a+/

All financial or technical assistance agreement proposals shall be filed with the (ureau after pament of the reuired

processing fees. %f the proposal is found to be sufficient and meritorious in form and substance after evaluation& it

shall be recorded with the appropriate government agenc to give the proponent the prior right to the area covered b

such proposal' Provided& That e!isting mineral agreements& financial or technical assistance agreements and other

mining rights are not impaired or pre7udiced thereb. The $ecretar shall recommend its approval to the President.

S&c'()* 38

T&r ) (*a*c(a+ )r T&ch*(ca+ A//(/'a*c& Ar&&&*'

A financial or technical assistance agreement shall have a term not e!ceeding twent)five *,5- ears to start from the

e!ecution thereof& renewable for not more than twent)five *,5- ears under such terms and conditions as ma be

provided b law.

S&c'()* 39

O'()* ') C)*&r' (*') a M(*&ra+ Ar&&&*'

The contractor has the option to convert the financial or technical assistance agreement to a mineral agreement at an

time during the term of the agreement& if the economic viabilit of the contract area is found to be inadeuate to

7ustif large)scale mining operations& after proper notice to the $ecretar as provided for under the implementing rules

and regulations' Provided& That the mineral agreement shall onl be for the remaining period of the original

agreement.

%n the case of a foreign contractor& it shall reduce its euit to fort percent *48:- in the corporation& partnership&

association& or cooperative. pon compliance with this reuirement b the contractor& the $ecretar shall approve the

conversion and e!ecute the mineral production)sharing agreement.

S&c'()* 4

A//(*&*'=Tra*/&r

A financial or technical assistance agreement ma be assigned or transferred& in whole or in part& to a ualified person

sub7ect to the prior approval of the President' Provided& That the President shall notif 3ongress of ever financial or

technical assistance agreement assigned or converted in accordance with this provision within thirt *?8- das from

the date of the approval thereof.

S&c'()* 41W('hra0a+ r) (*a*c(a+ )r T&ch*(ca+ A//(/'a*c& Ar&&&*'

The contractor shall manifest in writing to the $ecretar his intention to withdraw from the agreement& if in his

7udgment the mining pro7ect is no longer economicall feasible& even after he has e!erted reasonable diligence to

remed the cause or the situation. The $ecretar ma accept the withdrawal' Provided& That the contractor has

complied or satisfied all his financial& fiscal or legal obligations.

C%APTER #II

SMALL>SCALE MINING

S&c'()* 42

Sa++>/ca+& M(*(*

$mall)scale mining shall continue to be governed b #epublic Act 2o. @8@6 and other pertinent laws.

C%APTER #III

?UARRY RESOURCES

S&c'()* 43

?arr- P&r('

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An ualified person ma appl to the provincial+cit mining regulator board for a uarr permit on privatel)owned

lands and+or public lands for building and construction materials such as marble& basalt& andesite& conglomerate& tuff&

adobe& granite& gabbro& serpentine& inset filling materials& cla for ceramic tiles and building bricks& pumice& perlite

and other similar materials that are e!tracted b uarring from the ground. The provincial governor shall grant the

permit after the applicant has complied with all the reuirements as prescribed b the rules and regulations.

The ma!imum area which a ualified person ma hold at an one time shall be five hectares *5 has.-' Provided& That

in large)scale uarr operations involving cement raw materials& marble& granite& sand and gravel and construction

aggregates& a ualified person and the government ma enter into a mineral agreement as defined herein.

A uarr permit shall have a term of five *5- ears& renewable for like periods but not to e!ceed a total term of twent)

five *,5- ears. 2o uarr permit shall be issued or granted on an area covered b a mineral agreement or financial

or technical assistance agreement.

S&c'()* 44

?arr- && a* Ta6&/

A permittee shall& during the term of his permit& pa a uarr fee as provided for under the implementing rules and

regulations. The permittee shall also pa the e!cise ta! as provided b pertinent laws.

S&c'()* 45

Ca*c&++a'()* ) ?arr- P&r('

A uarr permit ma be cancelled b the provincial governor for violations of the provisions of this Act or itsimplementing rules and regulations or the terms and conditions of said permit' Provided& That before the cancellation

of such permit& the holder thereof shall be given the opportunit to be heard in an investigation conducted for the

purpose.

S&c'()* 4

C)&rc(a+ Sa* a* Gra&+ P&r('

An ualified person ma be granted a permit b the provincial governor to e!tract and remove sand and gravel or

other loose or unconsolidated materials which are used in their natural state& without undergoing processing from an

area of not more than five hectares *5 has.- and in such uantities as ma be specified in the permit.

S&c'()* 47

I*/'r(a+ Sa* a* Gra&+ P&r('

An ualified person ma be granted an industrial sand and gravel permit b the (ureau for the e!traction of sand andgravel and other loose or unconsolidated materials that necessitate the use of mechanical processing covering an area

of more than five hectares *5 has.- at an one time. The permit shall have a term of five *5- ears& renewable for a like

period but not to e!ceed a total term of twent)five *,5- ears.

S&c'()* 48

E6c+/(& Sa* a* Gra&+ P&r('

An ualified person ma be granted an e!clusive sand and gravel permit b the provincial governor to uarr and

utilie sand and gravel or other loose or unconsolidated materials from public lands for his own use& provided that

there will be no commercial disposition thereof.

A mineral agreement or a financial technical assistance agreement contractor shall& however& have the right to e!tract

and remove sand and gravel and other loose unconsolidated materials without need of a permit within the area covered

b the mining agreement for the e!clusive use in the mining operations' Provided& That monthl reports of theuantit of materials e!tracted therefrom shall be submitted to the mines regional office concerned' Provided& further&

That said right shall be coterminous with the e!piration of the agreement.

Folders of e!isting mining leases shall likewise have the same rights as that of a contractor' Provided& That said right

shall be coterminous with the e!pir dates of the lease.

S&c'()* 49

G)&r*&*' Gra'(')/ P&r('

An government entit or instrumentalit ma be granted a gratuitous permit b the provincial governor to e!tract

sand and gravel& uarr or loose unconsolidated materials needed in the construction of building and+or infrastructure

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for public use or other purposes over an area of not more than two hectares *, has.- for a period coterminous with said

construction.

S&c'()* 5

Pr(a'& Gra'(')/ P&r('

An owner of land ma be granted a private gratuitous permit b the provincial governor.

S&c'()* 51

Ga*) P&r('

An ualified person ma be granted a guano permit b the provincial governor to e!tract and utilie loose

unconsolidated guano and other organic fertilier materials in an portion of a municipalit where he has established

domicile. The permit shall be for specific caves and+or for confined sites with locations verified b the 0epartmentDs

field officer in accordance with e!isting rules and regulations.

S&c'()* 52

G&/')*& Ga'h&r(* P&r('

An ualified person ma be granted a non)e!clusive gemstone gathering permit b the provincial governor to gather

loose stones useful as gemstones in rivers and other locations.

C%APTER I!TRANSPORT, SALE AN" PROCESSING O MINERALS

S&c'()* 53

Or& Tra*/)r' P&r('

A permit specifing the origin and uantit of non)processed mineral ores or minerals shall be reuired for their

transport. Transport permits shall be issued b the mines regional director who has 7urisdiction over the area where the

ores were e!tracted. %n the case of mineral ores or minerals being transported from the small)scale mining areas to the

custom mills or processing plants& the Provincial Mining #egulator (oard *PM#(- concerned shall formulate their

own policies to govern such transport of ores produced b small)scale miners. The absence of a permit shall be

considered as prima facie evidence of illegal mining and shall be sufficient cause for the /overnment to confiscate the

ores or minerals being transported& the tools and euipment utilied& and the vehicle containing the same. =re samples

not e!ceeding two metric tons *, m.t.- to be used e!clusivel for assa or pilot test purposes shall be e!empted from

such reuirement.

S&c'()* 54

M(*&ra+ Tra(* R&(/'ra'()*

2o person shall engage in the trading of mineral products& either locall or internationall& unless registered with the

0epartment of Trade and %ndustr and accredited b the 0epartment& with a cop of said registration submitted to the

(ureau.

S&c'()* 55

M(*&ra+/ Pr)c&//(* P&r('

2o person shall engage in the processing of minerals without first securing a minerals processing permit from the

$ecretar. Minerals processing permit shall be for a period of five *5- ears renewable for like periods but not to

e!ceed a total term of twent)five *,5- ears. %n the case of mineral ores or minerals produced b the small)scaleminers& the processing thereof as well as the licensing of their custom mills& or processing plants shall continue to be

governed b the provisions of #epublic Act 2o. @8@6.

S&c'()* 5

E+((;(+('- ) )r&(*>)0*&=>c)*'r)++& C)r)ra'()*

A foreign)owned+)controlled corporation ma be granted a mineral processing permit.

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C%APTER !

"E#ELOPMENT O MINING COMMUNITIES, SCIENCE AN" MINING TEC%NOLOGY

S&c'()* 57

E6&*('r& )r C)*('- "&&+)&*' a* Sc(&*c& a* M(*(* T&ch*)+)-

A contractor shall assist in the development of its mining communit& the promotion of the general welfare of its

inhabitants& and the development of science and mining technolog.

S&c'()* 58Cr&('& Ac'(('(&/

Activities that ma be credited as e!penditures for development of mining communities& and science and mining

technolog are the following'

a. An activit or e!penditure intended to enhance the development of the mining and neighboring

communities of a mining operation other than those reuired or provided for under e!isting laws& or collective

bargaining agreements& and the likeE and

b. An activit or e!penditure directed towards the development of geosciences and mining technolog such

as& but not limited to& institutional and manpower development& and basic and applied researches. Appropriate

supervision and control mechanisms shall be prescribed in the implementing rules and regulations of this Act.

S&c'()* 59

Tra(*(* a* "&&+)&*'

A contractor shall maintain an effective program of manpower training and development throughout the term of the

mineral agreement and shall encourage and train ilipinos to participate in all aspects of the mining operations&

including the management thereof. or highl)technical and specialied mining operations& the contractor ma& sub7ect

to the necessar government clearances& emplo ualified foreigners.

S&c'()*

U/& ) I*(&*)/ G))/, S&r(c&/ a* T&ch*)+)(&/

A contractor shall give preference to the use of local goods& services and scientific and technical resources in the

mining operations& where the same are of euivalent ualit& and are available on euivalent terms as their imported

counterparts.

S&c'()* 1")*a'()*/=Tr* O&r ) ac(+('(&/

Prior to cessation of mining operations occasioned b abandonment or withdrawal of operations& on public lands b

the contractor& the latter shall have a period of one *1- ear therefrom within which to remove his improvementsE

otherwise& all the social infrastructure and facilities shall be turned over or donated ta!)free to the proper government

authorities& national or local& to ensure that said infrastructure and facilities are continuousl maintained and utilied

b the host and neighboring communities.

S&c'()* 2

E+)-&*' ) (+((*)/

A contractor shall give preference to ilipino citiens in all tpes of mining emploment within the countr insofar as

such citiens are ualified to perform the corresponding work with reasonable efficienc and without haard to the

safet of the operations. The contractor& however& shall not be hindered from hiring emploees of his own selection&sub7ect to the provisions of 3ommonwealth Act 2o. 61?& as amended& for technical and specialied work which& in his

7udgment and with the approval of the 0irector& reuires highl)specialied training or long e!perience in e!ploration&

development or utiliation of mineral resources' Provided& That in no case shall each emploment e!ceed five *5-

ears or the paback period as represented in original pro7ect stud& whichever is longer' Provided& further& That each

foreigner emploed as mine manager& vice)president for operations or in an euivalent managerial position in charge

of mining& milling& uarring or drilling operation shall'

a. Present evidence of his ualification and work e!perienceE or

b. $hall pass the appropriate government licensure e!aminationE or

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c. %n special cases& ma be permitted to work b the 0irector for a period not e!ceeding one *1- ear'

Provided& however& That if reciprocal privileges are e!tended to ilipino nationals in the countr of domicile&

the 0irector ma grant waivers or e!emptions.

C%APTER !I

SAETY AN" EN#IRONMENTAL PROTECTION

S&c'()* 3M(*&/ Sa&'- a* E*(r)*&*'a+ Pr)'&c'()*

All contractors and permittees shall strictl compl with all the mines safet rules and regulations as ma be

promulgated b the $ecretar concerning the safe and sanitar upkeep of the mining operations and achieve waste)

free and efficient mine development. Personnel of the 0epartment involved in the implementation of mines safet&

health and environmental rules and regulations shall be covered under #epublic Act 2o. @?85.

S&c'()* 4

M(*& La;)r

2o person under si!teen *16- ears of age shall be emploed in an phase of mining operations and no person under

eighteen *1- ears of age shall be emploed underground in a mine.

S&c'()* 5M(*& S&r(/()*

All mining and uarring operations that emplo more than fift *58- workers shall have at least one *1- licensed

mining engineer with at least five *5- ears of e!perience in mining operations& and one *1- registered foreman.

S&c'()*

M(*& I*/&c'()*

The regional director shall have e!clusive 7urisdiction over the safet inspection of all installations& surface or

underground& in mining operations at reasonable hours of the da or night and as much as possible in a manner that

will not impede or obstruct work in progress of a contractor or permittee.

S&c'()* 7

P)0&r ') I//& Or&r/

The mines regional director shall& in consultation with the nvironmental Management (ureau& forthwith or within

such time as specified in his order& reuire the contractor to remed an practice connected with mining or uarring

operations& which is not in accordance with safet and anti)pollution laws and regulations. %n case of imminent danger

to life or propert& the mines regional director ma summaril suspend the mining or uarring operations until the

danger is removed& or appropriate measures are taken b the contractor or permittee.

S&c'()* 8

R&)r' ) Acc(&*'/

%n case of an incident or accident& causing or creating the danger of loss of life or serious phsical in7uries& the person

in charge of operations shall immediatel report the same to the regional office where the operations are situated.

ailure to report the same without 7ustifiable reason shall be a cause for the imposition of administrative sanctions

prescribed in the rules and regulations implementing this Act.

S&c'()* 9E*(r)*&*'a+ Pr)'&c'()*

ver contractor shall undertake an environmental protection and enhancement program covering the period of the

mineral agreement or permit. $uch environmental program shall be incorporated in the work program which the

contractor or permittee shall submit as an accompaning document to the application for a mineral agreement or

permit. The work program shall include not onl plans relative to mining operations but also to rehabilitation&

regeneration& revegetation and reforestation of mineralied areas& slope stabiliation of mined)out and tailings covered

areas& auaculture& watershed development and water conservationE and socioeconomic development.

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S&c'()* 7

E*(r)*&*'a+ Iac' A//&//&*' @EIA

!cept during the e!ploration period of a mineral agreement or financial or technical assistance agreement or an

e!ploration permit& an environmental clearance certificate shall be reuired based on an environmental impact

assessment and procedures under the Philippine nvironmental %mpact Assessment $stem including $ections ,6 and

,@ of the Gocal /overnment 3ode of 1991 which reuire national government agencies to maintain ecological

balance& and prior consultation with the local government units& non)governmental and peopleDs organiations and

other concerned sectors of the communit' Provided& That a completed ecological profile of the proposed mining areashall also constitute part of the environmental impact assessment. PeopleDs organiations and non)governmental

organiations shall be allowed and encouraged to participate in ensuring that contractors+permittees shall observe all

the reuirements of environmental protection.

S&c'()* 71

R&ha;(+('a'()*

3ontractors and permittees shall technicall and biologicall rehabilitate the e!cavated& mined)out& tailings covered

and disturbed areas to the condition of environmental safet& as ma be provided in the implementing rules and

regulations of this Act. A mine rehabilitation fund shall be created& based on the contractorDs approved work program&

and shall be deposited as a trust fund in a government depositor bank and used for phsical and social rehabilitation

of areas and communities affected b mining activities and for research on the social& technical and preventive aspects

of rehabilitation. ailure to fulfill the above obligation shall mean immediate suspension or closure of the mining

activities of the contractor+permittee concerned.

C%APTER !II

AU!ILIARY MINING RIG%TS

S&c'()* 72

T(;&r R(h'/

An provision of law to the contrar notwithstanding& a contractor ma be granted a right to cut trees or timber within

his mining area as ma be necessar for his mining operations sub7ect to forestr laws& rules and regulations'

Provided& That if the land covered b the mining area is alread covered b e!isting timber concessions& the volume

of timber needed and the manner of cutting and removal thereof shall be determined b the mines regional director&

upon consultation with the contractor& the timber concessionaire+permittee and the orest Management (ureau of the0epartment' Provided& further& That in case of disagreement between the contractor and the timber concessionaire& the

matter shall be submitted to the $ecretar whose decision shall be final. The contractor shall perform reforestation

work within his mining area in accordance with forestr laws& rules and regulations.

S&c'()* 73

Wa'&r R(h'/

A contractor shall have water rights for mining operations upon approval of application with the appropriate

government agenc in accordance with e!isting water laws& rules and regulations promulgated thereunder' Provided&

That water rights alread granted or vested through long use& recognied and acknowledged b local customs& laws&

and decisions of courts shall not thereb be impaired' Provided& further& That the /overnment reserves the right to

regulate water rights and the reasonable and euitable distribution of water suppl so as to prevent the monopol of

the use thereof.

S&c'()* 74

R(h' ') P)//&// E6+)/(&/

A contractor+e!ploration permittee shall have the right to possess and use e!plosives within his contract+permit area as

ma be necessar for his mining operations upon approval of application with the appropriate government agenc in

accordance with e!isting laws& rules and regulations promulgated thereunder' Provided& That the /overnment reserves

the right to regulate and control the e!plosive accessories to ensure safe mining operations.

S&c'()* 75

Ea/&&*' R(h'/

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Bhen mining areas are so situated that for purposes of more convenient mining operations it is necessar to build&

construct or install on the mining areas or lands owned& occupied or leased b other persons& such infrastructure as

roads& railroads& mills& waste dump sites& tailings ponds& warehouses& staging or storage areas and port facilities&

tramwas& runwas& airports& electric transmission& telephone or telegraph lines& dams and their normal flood and

catchment areas& sites for water wells& ditches& canals& new river beds& pipelines& flumes& cuts& shafts& tunnels& or mills&

the contractor& upon pament of 7ust compensation& shall be entitled to enter and occup said mining areas or lands.

S&c'()* 7

E*'r- (*') Pr(a'& La*/ a* C)*c&//()* Ar&a/

$ub7ect to prior notification& holders of mining rights shall not be prevented from entr into private lands and

concession areas b surface owners& occupants& or concessionaires when conducting mining operations therein'

Provided& That an damage done to the propert of the surface owner& occupant& or concessionaire as a conseuence

of such operations shall be properl compensated as ma be provided for in the implementing rules and regulations'

Provided& further& That to guarantee such compensation& the person authoried to conduct mining operation shall& prior

thereto& post a bond with the regional director based on the tpe of properties& the prevailing prices in and around the

area where the mining operations are to be conducted& with suret or sureties satisfactor to the regional director.

C%APTER !III

SETTLEMENT O CONLICTS

S&c'()* 77

Pa*&+ ) Ar;('ra')r/

There shall be a panel of arbitrators in the regional office of the 0epartment composed of three *?- members& two *,-

of whom must be members of the Philippine (ar in good standing and one a licensed mining engineer or a

professional in a related field& and dul designated b the $ecretar as recommended b the Mines and /eosciences

(ureau 0irector. Those designated as members of the panel shall serve as such in addition to their work in the

0epartment without receiving an additional compensation As much as practicable& said members shall come from the

different bureaus of the 0epartment in the region. The presiding officer thereof shall be selected b the drawing of

lots. Fis tenure as presiding officer shall be on a earl basis. The members of the panel shall perform their duties and

obligations in hearing and deciding cases until their designation is withdrawn or revoked b the $ecretar. Bithin

thirt *?8- working das& after the submission of the case b the parties for decision& the panel shall have e!clusive

and original 7urisdiction to hear and decide on the following'

a. 0isputes involving rights to mining areasE

b. 0isputes involving mineral agreements or permitsE

c. 0isputes involving surface owners& occupants and claimholders+concessionairesE and

d. 0isputes pending before the (ureau and the 0epartment at the date of the effectivit of this Act.

S&c'()* 78

A&++a'& r(/(c'()*

The decision or order of the panel of arbitrators ma be appealed b the part not satisfied thereto to the Mines

Ad7udication (oard within fifteen *15- das from receipt thereof which must decide the case within thirt *?8- das

from submission thereof for decision.

S&c'()* 79M(*&/ A

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b. To administer oaths& summon the parties to a controvers& issue subpoenas reuiring the attendance and

testimon of witnesses or the production of such books& papers& contracts& records& statement of accounts&

agreements& and other documents as ma be material to a 7ust determination of the matter under investigation&

and to testif in an investigation or hearing conducted in pursuance of this ActE

c. To conduct hearings on all matters within its 7urisdiction& proceed to hear and determine the disputes in the

absence of an part thereto who has been summoned or served with notice to appear& conduct its proceedings

or an part thereof in public or in private& ad7ourn its hearings at an time and place& refer technical matters or

accounts to an e!pert and to accept his report as evidence after hearing of the parties upon due notice& directparties to be 7oined in or e!cluded from the proceedings& correct& amend& or waive an error& defect or

irregularit& whether in substance or in form& give all such directions as it ma deem necessar or e!pedient in

the determination of the dispute before it& and dismiss the mining dispute as part thereof& where it is trivial or

where further proceedings b the (oard are not necessar or desirable'

1. To hold an person in contempt& directl or indirectl& and impose appropriate penalties thereforE

and

,. To en7oin an or all acts involving or arising from an case pending before it which& if not

restrained forthwith& ma cause grave or irreparable damage to an of the parties to the case or

seriousl affect social and economic stabilit.

%n an proceeding before the (oard& the rules of evidence prevailing in courts of law or euit shall not be controlling

and it is the spirit and intention of this Act that shall govern. The (oard shall use ever and all reasonable means toascertain the facts in each case speedil and ob7ectivel and without regard to technicalities of law or procedure& all in

the interest of due process. %n an proceeding before the (oard& the parties ma be represented b legal counsel. The

findings of fact of the (oard shall be conclusive and binding on the parties and its decision or order shall be final and

e!ecutor.

A petition for review b certiorari and uestion of law ma be filed b the aggrieved part with the $upreme 3ourt

within thirt *?8- das from receipt of the order or decision of the (oard.

C%APTER !I#

GO#ERNMENT S%ARE

S&c'()* 8

G)&r*&*' Shar& (* M(*&ra+ Pr)c'()* Shar(* Ar&&&*'

The total government share in a mineral production sharing agreement shall be the e!cise ta! on mineral products as

provided in #epublic Act 2o. @@,9& amending $ection 151*a- of the 2ational %nternal #evenue 3ode& as amended.

S&c'()* 81

G)&r*&*' Shar& (* O'h&r M(*&ra+ Ar&&&*'/

The share of the /overnment in co)production and 7oint)venture agreements shall be negotiated b the /overnment

and the contractor taking into consideration the'

a. capital investment of the pro7ectE

b. risks involvedE

c. contribution of the pro7ect to the economE andd. other factors that will provide for a fair and euitable sharing between the /overnment and the contractor.

The /overnment shall also be entitled to compensations for its other contributions which shall be agreed upon b the

parties& and shall consist& among other things& the contractorDs income ta!& e!cise ta!& special allowance& withholding

ta! due from the contractorDs foreign stockholders arising from dividend or interest paments to the said foreign

stockholders& in case of a foreign national& and all such other ta!es& duties and fees as provided for under e!isting

laws.

The /overnment share in financial or technical assistance agreement shall consist of& among other things& the

contractorDs corporate income ta!& e!cise ta!& special allowance& withholding ta! due from the contractorDs foreign

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stockholders arising from dividend or interest paments to the said foreign stockholder in case of a foreign national

and all such other ta!es& duties and fees as provided for under e!isting laws.

The collection of /overnment share in financial or technical assistance agreement shall commence after the financial

or technical assistance agreement contractor has full recovered its pre)operating e!penses& e!ploration& and

development e!penditures& inclusive.

S&c'()* 82

A++)ca'()* ) G)&r*&*' Shar&The /overnment share as referred to in the preceding sections shall be shared and allocated in accordance with

$ections ,98 and ,9, of #epublic Act 2o. @168 otherwise known as the Gocal /overnment 3ode of 1991. %n case the

development and utiliation of mineral resources is undertaken b a government)owned or )controlled corporation& the

sharing and allocation shall be in accordance with $ections ,91 and ,9, of the said 3ode.

C%APTER !#

TA!ES AN" EES

S&c'()* 83

I*c)& Ta6&/

After the lapse of the income ta! holida as provided for in the =mnibus %nvestments 3ode& the contractor shall beliable to pa income ta! as provided in the 2ational %nternal #evenue 3ode& as amended.

S&c'()* 84

E6c(/& Ta6 )* M(*&ra+ Pr)c'/

The contractor shall be liable to pa the e!cise ta! on mineral products as provided for under $ection 151 of the

2ational %nternal #evenue 3ode' Provided& however& That with respect to a mineral production sharing agreement& the

e!cise ta! on mineral products shall be the government share under said agreement.

S&c'()* 85

M(*& Wa/'&/ a* Ta(+(*/ &&/

A semi)annual fee to be known as mine wastes and tailings fee is hereb imposed on all operating mining companies

in accordance with the implementing rules and regulations. The mine wastes and tailings fee shall accrue to a reserve

fund to be used e!clusivel for pament for damages to'

a. Gives and personal safetE

b. Gands& agricultural crops and forest products& marine life and auatic resources& cultural resourcesE and

c. %nfrastructure and the revegetation and rehabilitation of silted farm lands and other areas devoted to

agriculture and fishing caused b mining pollution.

This is in addition to the suspension or closure of the activities of the contractor at an time and the penal sanctions

imposed upon the same.

The $ecretar is authoried to increase mine wastes and tailings fees& when public interest so reuires& upon the

recommendation of the 0irector.

S&c'()* 8

Occa'()* &&/

There shall be collected from an holder of a mineral agreement& financial or technical assistance agreement or

e!ploration permit on public or private lands& an annual occupation fee in accordance with the following schedule'

a. or e!ploration permit ) ive pesos *P5.88- per hectare or fraction thereof per annumE

b. or mineral agreements and financial or technical assistance agreements ) ift pesos *P58.88- per hectare

or fraction thereof per annumE and

c. or mineral reservation ) =ne hundred pesos *P188.88- per hectare or fraction thereof per annum.

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The $ecretar is authoried to increase the occupation fees provided herein when the public interest so reuires& upon

recommendation of the (ureau 0irector.

S&c'()* 87

Ma**&r ) Pa-&*' ) &&/

The fees shall be paid on the date the mining agreement is registered with the appropriate office and on the same date

ever ear thereafter. %t shall be paid to the treasurer of the municipalit or cit where the onshore mining areas are

located& or to the 0irector in case of offshore mining areas. or this purpose& the appropriate officer shall submit to thetreasurer of the municipalit or cit where the onshore mining area is located& a complete list of all onshore mining

rights registered with his office& indicating therein the names of the holders& area in hectares& location& and date

registered. %f the fee is not paid on the date specified& it shall be increased b twent)five per centum *,5:-.

S&c'()* 88

A++)ca'()* ) Occa'()* &&/

Thirt per centum *?8:- of all occupational fees collected from holders of mining rights in onshore mining areas shall

accrue to the province and sevent per centum *@8:- to the municipalit in which the onshore mining areas are

located. %n a chartered cit& the full amount shall accrue to the cit concerned.

S&c'()* 89

(+(* &&/ a* O'h&r Char&/

The $ecretar is authoried to charge reasonable filing fees and other charges as he ma prescribe in accordance withthe implementing rules and regulations.

C%APTER !#I

INCENTI#ES

S&c'()* 9

I*c&*'(&/

The contractors in mineral agreements& and financial or technical assistance agreements shall be entitled to the

applicable fiscal and non)fiscal incentives as provided for under !ecutive =rder 2o. ,,6& otherwise known as the

=mnibus %nvestments 3ode of 19@. Provided& That holders of e!ploration permits ma register with the (oard of

%nvestments and be entitled to the fiscal incentives granted under the said 3ode for the duration of the permits or

e!tensions thereof' Provided& further& That mining activities shall alwas be included in the investment priorities plan.

S&c'()* 91

I*c&*'(&/ )r P)++'()* C)*'r)+ "&(c&/

Pollution control devices acuired& constructed or installed b contractors shall not be considered as improvements on

the land or building where the are placed& and shall not be sub7ect to real propert and other ta!es or assessments'

Provided& however& That pament of mine wastes and tailings fees is not e!empted.

S&c'()* 92

I*c)& Ta6>Carr- )r0ar ) L)//&/

A net operating loss without the benefit of incentives incurred in an of the first ten *18- ears of operations ma be

carried over as a deduction from ta!able income for the ne!t five *5- ears immediatel following the ear of such

loss. The entire amount of the loss shall be carried over to the first of the five *5- ta!able ears following the loss& andan portion of such loss which e!ceeds the ta!able income of such first ear shall be deducted in like manner from the

ta!able income of the ne!t remaining four *4- ears.

S&c'()* 93

I*c)& Ta6>Acc&+&ra'& "&r&c(a'()*

i!ed assets ma be depreciated as follows'

a. To the e!tent of not more than twice as fast as the normal rate of depreciation or depreciated at normal rate

of depreciation if the e!pected life is ten *18- ears or lessE or

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b. 0epreciated over an number of ears between five *5- ears and the e!pected life if the latter is more than

ten *18- ears& and the depreciation thereon allowed as deduction from ta!able income' Provided& That the

contractor notifies the (ureau of %nternal #evenue at the beginning of the depreciation period which

depreciation rate allowed b this section will be used.

%n computing for ta!able income& unless otherwise provided in this Act& the contractor ma& at his option& deduct

e!ploration and development e!penditures accumulated at cost as of the date of the prospecting or e!ploration and

development e!penditures paid or incurred during the ta!able ear' Provided& That the total amount deductible for

e!ploration and development e!penditures shall not e!ceed twent)five per centum *,5:- of the net income frommining operations. The actual e!ploration and development e!penditures minus the twent)five per centum *,5:- net

income from mining shall be carried forward to the succeeding ears until full deducted.

2et income from mining operation is defined as gross income from operations less allowable deductions which are

necessar or related to mining operations. Allowable deductions shall include mining& milling and marketing

e!penses& depreciation of properties directl used in the mining operations. This paragraph shall not appl to

e!penditures for the acuisition or improvement of propert of a character which is sub7ect to the allowances for

depreciation.

S&c'()* 94

I*&/'&*' Gara*'&&/

The contractor shall be entitled to the basic rights and guarantees provided in the 3onstitution and such other rights

recognied b the government as enumerated hereunder'

a. #epatriation of investments. The right to repatriate the entire proceeds of the liuidation of the foreign

investment in the currenc in which the investment was originall made and at the e!change rate prevailing at

the time of repatriation.

b. #emittance of earnings. The right to remit earnings from the investment in the currenc in which the

foreign investment was originall made and at the e!change rate prevailing at the time of remittance.

c. oreign loans and contracts. The right to remit at the e!change rate prevailing at the time of remittance

such sums as ma be necessar to meet the paments of interest and principal on foreign loans and foreign

obligations arising from financial or technical assistance contracts.

d. reedom from e!propriation. The right to be free from e!propriation b the /overnment of the propert

represented b investments or loans& or of the propert of the enterprise e!cept for public use or in the interest

of national welfare or defense and upon pament of 7ust compensation. %n such cases& foreign investors orenterprises shall have the right to remit sums received as compensation for the e!propriated propert in the

currenc in which the investment was originall made and at the e!change rate prevailing at the time of

remittance.

e. #euisition of investment. The right to be free from reuisition of the propert represented b the

investment or of the propert of the enterprises e!cept in case of war or national emergenc and onl for the

duration thereof. ;ust compensation shall be determined and paid either at the time or immediatel after

cessation of the state of war or national emergenc. Paments received as compensation for the reuisitioned

propert ma be remitted in the currenc in which the investments were originall made and at the e!change

rate prevailing at the time of remittance.

f. 3onfidentialit. An confidential information supplied b the contractor pursuant to this Act and its

implementing rules and regulations shall be treated as such b the 0epartment and the /overnment& andduring the term of the pro7ect to which it relates.

C%APTER !#II

GROUN" OR CANCELLATION, RE#OCATION, AN" TERMINATION

S&c'()* 95

La'& )r N)*>(+(* ) R&(r&&*'/

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ailure of the permittee or contractor to compl with an of the reuirements provided in this Act or in its

implementing rules and regulations& without a valid reason& shall be sufficient ground for the suspension of an permit

or agreement provided under this Act.

S&c'()* 9

#()+a'()* ) 'h& T&r/ a* C)*('()*/ ) P&r('/ )r Ar&&&*'/

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An person e!tracting minerals and disposing the same without a mining agreement& lease& permit& license& or steals

minerals or ores or the products thereof from mines or mills or processing plants shall& upon conviction& be imprisoned

from si! *6- months to si! *6- ears or pa a fine from Ten thousand pesos *P18&888.88- to Twent thousand pesos

*P,8&888.88- or both& at the discretion of the appropriate court. %n addition& he shall be liable to pa damages and

compensation for the minerals removed& e!tracted& and disposed of. %n the case of associations& partnerships& or

corporations& the president and each of the directors thereof shall be responsible for the acts committed b such

association& corporation& or partnership.

S&c'()* 14"&/'rc'()* ) M(*(* S'rc'r&/

An person who willfull destros or damages structures in or on the mining area or on the mill sites shall& upon

conviction& be imprisoned for a period not to e!ceed five *5- ears and shall& in addition& pa compensation for the

damages which ma have been caused thereb.

S&c'()* 15

M(*&/ Ar/)*

An person who willfull sets fire to an mineral stockpile& mine or workings& fittings or a mine& shall be guilt of

arson and shall be punished& upon conviction& b the appropriate court in accordance with the provisions of the

#evised Penal 3ode and shall& in addition& pa compensation for the damages caused hereb.

S&c'()* 1

W(+++ "aa& ') a M(*&

An person who willfull damages a mine& unlawfull causes water to run into a mine& or obstructs an shaft or

passage to a mine& or renders useless& damages or destros an machine& appliance& apparatus& rope& chain& tackle& or

an other things used in a mine& shall be punished& upon conviction& b the appropriate court& b imprisonment not

e!ceeding a period of five *5- ears and shall& in addition& pa compensation for the damages caused thereb.

S&c'()* 17

I++&a+ O;/'rc'()* ') P&r(''&&/ )r C)*'rac')r/

An person who& without 7ustifiable cause& prevents or obstructs the holder of an permit& agreement or lease from

undertaking his mining operations shall be punished& upon conviction b the appropriate court& b a fine not

e!ceeding ive thousand pesos *P5&888.88- or imprisonment not e!ceeding one *1- ear& or both& at the discretion of

the court.

S&c'()* 18

#()+a'()* ) 'h& T&r/ a* C)*('()*/ ) 'h& E*(r)*&*'a+ C)+(a*c& C&r'((ca'&

An person who willfull violates or grossl neglects to abide b the terms and conditions of the environmental

compliance certificate issued to said person and which causes environmental damage through pollution shall suffer the

penalt of imprisonment of si! *6- months to si! *6- ears or a fine of ift thousand pesos *P58&888.88- to Two

hundred thousand pesos *P,88&888.88-& or both& at the discretion of the court.

S&c'()* 19

I++&a+ O;/'rc'()* ') G)&r*&*' O(c(a+/

An person who illegall prevents or obstructs the $ecretar& the 0irector or an of their representatives in the

performance of their duties under the provisions of this Act and of the regulations promulgated hereunder shall be

punished upon conviction& b the appropriate court& b a fine not e!ceeding ive thousand pesos *P5&888.88- or bimprisonment not e!ceeding one *1- ear& or both& at the discretion of the court.

S&c'()* 11

O'h&r #()+a'()*/

An other violation of this Act and its implementing rules and regulations shall constitute an offense punishable with a

fine not e!ceeding ive thousand pesos *P5&888.88-.

S&c'()* 111

(*&/

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The $ecretar is authoried to charge fines for late or non)submission of reports in accordance with the implementing

rules and regulations of this Act.

C%APTER !!

TRANSITORY AN" MISCELLANEOUS PRO#ISIONS

S&c'()* 112

N)*>Ia(r&*' ) E6(/'(* M(*(*=?arr-(* R(h'/

All valid and e!isting mining lease contracts& permits+licenses& leases pending renewal& mineral production)sharing

agreements granted under !ecutive =rder 2o. ,@9& at the date of effectivit of this Act& shall remain valid& shall not

be impaired& and shall be recognied b the /overnment' Provided& That the provisions of 3hapter C%< on

government share in mineral production)sharing agreement and of 3hapter C

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I"EL #. RAMOS

President of the Philippines