Philippine Mining Act of 1995

Ancestral lands

All lands exclusively and actually possessed, occupied, or utilized by indigenous cultural communities in accordance with their customs and traditions since time immemorial.

Block or meridional block

An area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of longitude, containing approximately eighty-one hectares (81 has.).

Bureau

The Mines and Geosciences Bureau under the Department of Environment and Natural Resources.

Carrying capacity

The capacity of natural and human environments to accommodate and absorb change without experiencing conditions of instability and attendant degradation.

Contiguous zone

Water, sea bottom, and substratum measured twenty-four nautical miles (24 n.m.) seaward from the base line of the Philippine archipelago.

Contract area

Land or body of water delineated for purposes of exploration, development, or utilization of the minerals found therein.

Contractor

A qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial or technical assistance agreement.

Co-production agreement (CA)

An agreement entered into between the Government and one or more contractors in accordance with Section 26(b) hereof.

Department

The Department of Environment and Natural Resources.

Development

The work undertaken to explore and prepare an ore body or a mineral deposit for mining, including the construction of necessary infrastructure and related facilities.

Bureau

The government agency responsible for the administration and disposition of mineral lands and resources, as well as conducting research and exploration surveys.

Mineral agreements

Agreements granted by the Director of the Bureau to qualified individuals or entities for the exploration and utilization of mineral resources, with terms and conditions to be monitored for compliance.

Regional Offices

Offices established by the Secretary, upon the recommendation of the Director, to oversee and manage mining activities in different regions of the country.

Processing of Applications

The rules and regulations of the Act prescribe the system for processing applications for mining rights.

Survey and Delineation of Mining Areas

A sketch plan or map of the mining area prepared by a geodetic engineer is required during the filing of a mineral agreement application, and the area must be surveyed and approved by the Director before mining feasibility is approved.

Meridional Blocks

The Philippine territory and its exclusive economic zone are divided into meridional blocks for the delineation of mining areas under the Act.

Recording System

A national and regional filing and recording system is established, including a mineral resource database system, to publish information relevant to mineral resources development.

Scope of Application

The Act governs the exploration, development, utilization, and processing of all mineral resources.

Opening of Ancestral Lands for Mining Operations

Ancestral lands cannot be opened for mining operations without the prior consent of the indigenous cultural community concerned.

Royalty Payments for Indigenous Cultural Communities

In agreements with indigenous cultural communities, the royalty payment upon mineral utilization is agreed upon and forms part of a trust fund for the community's socioeconomic well-being.

Areas Open to Mining Operations

All mineral resources in public or private lands, including timber or forestlands, are open to mineral agreements or financial or technical assistance agreement applications, subject to existing rights and agreements.

Areas Closed to Mining Applications

Certain areas, such as military and government reservations, infrastructure projects, and protected areas, are closed to mining applications.

Exploration Permit

Grants the right to conduct exploration for all minerals in specified areas, with a maximum area limit based on location and type of applicant.

Rights and Obligations of the Permittee

The permittee has the right to enter, occupy, and explore the area, subject to discussion and resolution of conflicts with affected parties. The permittee must undertake exploration work based on an approved work program.

Declaration of Mining Project Feasibility

A holder of an exploration permit can file a declaration of mining project feasibility within the permit's term, entitling them to an exclusive right to a mineral production sharing agreement or other mineral agreements.

Transfer or Assignment

An exploration permit can be transferred or assigned to a qualified person with the approval of the Secretary.

Modes of Mineral Agreement

Mineral agreements can take the form of mineral production sharing agreements, co-production agreements, or joint venture agreements, granting exclusive rights to conduct mining operations and share in the gross output.

Eligibility

Qualified persons can enter into mineral agreements with the government for the exploration, development, and utilization of mineral resources, subject to satisfactory environmental track record.

Filing and Approval of Mineral Agreements

Proposed mineral agreements are filed in the region where the areas of interest are located, and approval is granted by the Secretary, with copies submitted to the President and Congress.

Assignment/Transfer

Any assignment or transfer of rights and obligations under a mineral agreement requires prior approval from the Secretary.

Withdrawal from Mineral Agreements

The contractor can apply for cancellation of the mineral agreement if mining operations are no longer feasible or viable, subject to the Secretary's decision.

Terms

Mineral agreements have a maximum term of 25 years, renewable for another 25 years, with the option for the government or a contractor to operate the mine after the renewal period.

Financial or Technical Assistance Agreement

Qualified persons with technical and financial capability can enter into agreements directly with the government for large-scale exploration, development, and utilization of mineral resources.

Maximum Contract Area

The maximum contract area that may be granted per qualified person is specified, subject to relinquishment.

Terms and Conditions

Financial or technical assistance agreements include commitments, financial guarantees, proof of technical competence, and representations and warranties from the applicant.

Financing, Managerial, and Technical Expertise

The contractor must have or have access to the necessary financing, managerial, and technical expertise to carry out the objectives of the agreement.

Technology Deployment

The contractor must be able to timely deploy the required technology under its supervision.

Work Programs and Budgets

The contractor must adhere to periodic work programs and related budgets.

Exploration Period

The agreement provides for an exploration period of up to two years, extendable for another two years, subject to annual review by the Secretary.

Preferential Use of Local Goods and Services

The contractor must give preference to local goods and services to the maximum extent practicable.

Preference to Filipinos in Employment

The contractor is obligated to give preference to Filipinos in all types of mining employment for which they are qualified.

Anti-Pollution Measures

The contractor must use appropriate anti-pollution technology and facilities to protect the environment and restore or rehabilitate affected areas.

Furnishing of Government Records

The contractor must provide the government with records of geologic, accounting, and other relevant data for its mining operations.

Disposal of Minerals and Byproducts

The contractor must dispose of minerals and byproducts at the highest price and under advantageous terms and conditions.

Consultation and Arbitration

The agreement provides for consultation and arbitration for the interpretation and implementation of its terms and conditions.

Negotiation and Approval

Financial or technical assistance agreements are negotiated by the Department and approved by the President, with notification to Congress.

Filing and Evaluation of Proposals

Financial or technical assistance agreement proposals are filed with the Bureau and evaluated for sufficiency and merit.

Term of Agreement

A financial or technical assistance agreement has a maximum term of 25 years, renewable under certain conditions.

Option to Convert to Mineral Agreement

The contractor has the option to convert the agreement to a mineral agreement if the contract area's economic viability for large-scale mining operations is inadequate.

Assignment/Transfer

The agreement may be assigned or transferred with prior approval from the President.

Withdrawal from Agreement

The contractor may withdraw from the agreement if the mining project is no longer economically feasible, subject to compliance with financial, fiscal, and legal obligations.

Small-Scale Mining

Small-scale mining is governed by Republic Act No. 7076 and other relevant laws.

Quarry Permit

A permit is required for quarrying building and construction materials, with specific terms and conditions.

Quarry Fee and Taxes

Permittees must pay quarry fees and excise taxes as provided by laws.

Cancellation of Quarry Permit

A quarry permit may be cancelled for violations of the Act or its implementing rules and regulations, with an opportunity for the holder to be heard.

Sand and Gravel Permits

Permits are granted for the extraction of sand and gravel, with specific terms and conditions.

Government Gratuitous Permit

Government entities may be granted permits for the extraction of sand and gravel needed for public use or other purposes.

Ore Transport Permit

A permit is required for the transport of non-processed mineral ores or minerals, with specific provisions for small-scale mining areas.

Mineral Trading Registration

Registration with the Department of Trade and Industry is required for engaging in the trading of mineral products.

Minerals Processing Permit

A permit is required for the processing of minerals, with specific terms and conditions.

Eligibility of Foreign-owned/-controlled Corporation

A foreign-owned/-controlled corporation may be granted a mineral processing permit.

Expenditure for Community Development and Science and Mining Technology

Contractors are required to assist in the development of mining communities and the promotion of science and mining technology.

Credited Activities

Activities that enhance the development of mining communities and science and mining technology may be credited as expenditures.

Training and Development

Contractors must maintain a program of manpower training and development, with a focus on Filipino participation.

Use of Indigenous Goods, Services, and Technologies

Contractors must give preference to local goods, services, and scientific and technical resources.

Donations/Turn Over of Facilities

Upon cessation of mining operations, infrastructure and facilities must be turned over or donated to government authorities for continuous maintenance and utilization.

Employment of Filipinos

Contractors must prioritize the employment of Filipinos in all aspects of mining operations.

Filipino Preference

A contractor must prioritize hiring Filipino citizens for mining employment within the country, as long as they are qualified and can perform the work safely and efficiently.

Hiring Exceptions

Contractors can hire employees of their own selection for technical and specialized work that requires highly-specialized training or long experience in mineral resource exploration, development, or utilization, with approval from the Director. Employment for such positions should not exceed five years or the payback period represented in the original project study, whichever is longer.

Foreign Mine Manager

Foreigners employed as mine managers or in equivalent managerial positions must provide evidence of qualification and work experience, pass the appropriate government licensure examination, or may be permitted to work for a period not exceeding one year in special cases, with approval from the Director. Reciprocal privileges in the country of domicile may grant waivers or exemptions.

Mines Safety and Environmental Protection

Contractors and permittees must strictly comply with mines safety rules and regulations for safe and sanitary upkeep of mining operations and achieve waste-free and efficient mine development. Personnel involved in implementing mines safety, health, and environmental rules and regulations are covered under Republic Act No. 7305.

Age Restrictions

No person under 16 years of age shall be employed in any phase of mining operations, and no person under 18 years of age shall be employed underground in a mine.

Mine Supervision

Mining and quarrying operations employing more than 50 workers must have at least one licensed mining engineer with at least five years of experience in mining operations and one registered foreman.

Mine Inspection

The regional director has exclusive jurisdiction over safety inspections of all installations, surface or underground, in mining operations at reasonable hours of the day or night, without impeding or obstructing work in progress.

Power to Issue Orders

The mines regional director, in consultation with the Environmental Management Bureau, can require contractors to remedy any practice connected with mining or quarrying operations that does not comply with safety and anti-pollution laws and regulations. In case of imminent danger, the director may summarily suspend mining or quarrying operations until the danger is removed or appropriate measures are taken.

Report of Accidents

The person in charge of operations must immediately report any incident or accident causing or creating the danger of loss of life or serious physical injuries to the regional office. Failure to report without justifiable reason may result in administrative sanctions.

Environmental Protection

Every contractor must undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit. The program should include plans for mining operations, rehabilitation, regeneration, revegetation, reforestation, slope stabilization, aquaculture, watershed development, water conservation, and socioeconomic development.

Environmental Impact Assessment (EIA)

Except during the exploration period, an environmental clearance certificate based on an environmental impact assessment is required. The assessment should include a completed ecological profile of the proposed mining area. People's organizations and non-governmental organizations are encouraged to participate in ensuring environmental protection requirements are observed.

Rehabilitation

Contractors and permittees must rehabilitate excavated, mined-out, tailings covered, and disturbed areas to ensure environmental safety. A mine rehabilitation fund shall be created based on the contractor's approved work program and used for physical and social rehabilitation of affected areas and communities, as well as research on rehabilitation aspects. Failure to fulfill rehabilitation obligations may result in immediate suspension or closure of mining activities.

Timber Rights

Contractors may be granted the right to cut trees or timber within their mining area for mining operations, subject to forestry laws, rules, and regulations. In case of disagreement with existing timber concessions, the mines regional director will determine the volume of timber needed and the manner of cutting and removal. Reforestation work within the mining area is required.

Water Rights

Contractors must obtain water rights for mining operations in accordance with existing water laws, rules, and regulations. Existing water rights recognized by local customs, laws, and court decisions shall not be impaired, but the government reserves the right to regulate water rights and distribution.

Right to Possess Explosives

Contractors and exploration permittees have the right to possess and use explosives for mining operations, subject to approval from the appropriate government agency and compliance with existing laws, rules, and regulations. The government reserves the right to regulate and control explosive accessories for safe mining operations.

Easement Rights

Contractors may build, construct, or install infrastructure on mining areas or lands owned, occupied, or leased by other persons for more convenient mining operations. Just compensation must be paid, and the contractor is entitled to enter and occupy the mining areas or lands.

Entry into Private Lands and Concession Areas

Holders of mining rights must be allowed entry into private lands and concession areas for mining operations, with prior notification. Any damage caused to the property of surface owners, occupants, or concessionaires must be properly compensated. A bond must

Government share

The portion of taxes, fees, and compensations that the Government is entitled to receive from mining activities.

Contractor's income tax

The tax that the contractor is liable to pay on their income from mining operations.

Excise tax

The tax imposed on mineral products extracted and sold by the contractor.

Withholding tax

The tax deducted from dividend or interest payments made to foreign stockholders of the contractor.

Mine wastes and tailings fee

A fee imposed on mining companies for the purpose of compensating for damages caused by mining pollution.

Occupation fees

Annual fees collected from holders of mineral agreements, financial or technical assistance agreements, or exploration permits on public or private lands.

Incentives

Benefits and privileges granted to contractors in mineral agreements and financial or technical assistance agreements, including fiscal and non-fiscal incentives.

Late or non-filing of requirements

Failure to comply with the requirements of the mining permit or agreement, which may result in the suspension of the permit or agreement.

Violation of terms and conditions

Breach of the terms and conditions stated in the permits or agreements, which may lead to the cancellation of the same.

Non-payment of taxes and fees

Failure to pay taxes and fees due to the Government for two consecutive years, resulting in the cancellation of the permit or agreement.

Falsehood or omission of facts

Providing false information or omitting important facts in the exploration permit, mining agreement, or financial or technical assistance agreement, which may lead to the revocation and termination of the permit or agreement.

Mines and Geosciences Bureau

The bureau responsible for the regulation and supervision of mining activities, transformed into a line bureau under this Act.

False statements

Knowingly presenting false information or publishing false statements related to mines, mining operations, or permits, which may result in a fine.

Illegal exploration

Undertaking exploration work without the necessary permit, which may result in a fine.

Theft of minerals

Extracting and disposing of minerals without a valid mining agreement or permit, or stealing minerals from mines or processing plants, which may result in imprisonment or a fine.

Destruction of mining structures

Willfully destroying or damaging structures within mining areas or mill sites, which may result in imprisonment and the payment of compensation for damages.