You are on page 1of 7

REPUBLIC ACT NO.

7942 Mining policy under the Marcos administration


In 1971, Republic Act 6364 also known as the Gold Subsidy Law was
the "Philippine Mining Act of 1995." enacted to provide relief to gold producers. Under this law, the Central
Bank was required to purchase newly mined gold from mining
History companies at a designated price.
Colonial foundations for the current mining law All gold producers received a subsidy of sixty pesos per ounce of
production, plus seventy per cent of the difference between the cost of
. The country’s long tradition of mining can be traced to as early as 400 production per ounce of gold and the official price (RA 6364, 1971).
B.C. to 250 B.C., a stage when other metals such as iron and bronze
became known in Philippine prehistory (Caballero, 1996). In 1974, Marcos issued Presidential Decree 463 (PD 463), also known as
the Mineral Development Act of 1974, Under the law, mining companies
The early Spanish Conquerors and pioneers who arrived in the were exempt from paying customs duties and all taxes for machineries,
Philippines in the 1500s observed alluvial mining,, an important directive equipment
of the Spanish king to the conquistadors was to identify and consider the In addition, all mining claims, improvements and mineral products
colonies’ resources which are potentially useful to the Crown. derived from these claims were not liable for the payment of all taxes

They produced a mineral map of the archipelago. While PD 463 is labeled as the country’s first mining law to provide for
ways ‘to deal with environmental and social aspects of mining
The Spanish colonial government legislated the institutional regulation of operations’, the maximum fine of PhP5,000 or six-year imprisonment or
the mining industry. By virtue of conquest, the entire archipelago of the both (Chapter XIV Section 81) saw no actual imposition on polluting
Philippines was assumed to be owned by the Spanish King. This mines.
assumption, based on the concept of the Regalian Doctrine
In 1977, Marcos issued two decrees First, PD 11982 provided that mining
Spain handed over the Philippines to the United States under the Treaty corporations ‘shall return the lands and natural environment affected by
of Paris on 21 December 1898. the mining to their original condition

a) the Land Registration Act No. 496 of 1902 which required the Second, PD 12513 imposed fines of PhP0.05 and PhP0.10 per metric ton
acquisition of a ‘Torrens Title’; of mine waste and mill tailings respectively.
a) the Public Land Act of 1905 which declared all previously
The pollution of major waterways is lucid evidence that these laws had
unregistered lands as public lands under the administration of
not, over the decades, actually been enforced.
the state; and
b) the Mining Law of 1905 which granted Americans the right to
acquire public land for mining pursuits.
Mining policy under subsequent administrations
These laws provided that mineral deposits in public lands were free and
open for exploration, occupation and purchase by citizens of both the On July 1987, President Corazon Aquino issued Executive Order 2795.
This law fully authorised the Secretary of the DENR to negotiate and
United States and the Philippines (Congress of the Philippines, 1902).
conclude leasehold agreements with interested parties, including foreign-
owned corporations. The State shall recognize and protect the rights of the indigenous cultural
communities to their ancestral lands as provided for by the Constitution.
Under President Ramos, Republic Act 7729 was passed, otherwise known
as the Excise Tax Act7. This law reduced the excise tax rates on metallic Section 5
and non-metallic minerals. Mineral Reservations

In March 1995, Republic Act 7942, known as the Philippine Mining Act of
When the national interest so requires, such as when there is a need to
1995, was approved.
preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or ecological value,
Section 2 the President may establish mineral reservations upon the recommendation
Declaration of Policy of the Director through the Secretary.

All mineral resources in public and private lands are owned by the State. Mining operations in existing mineral reservations and such other
reservations as may thereafter be established, shall be undertaken
The state shall promote their rational exploration, development, utilization by the Department or through a contractor:
and conservation
small scale-mining cooperative shall be given preferential right to apply for
Through the combined efforts of government and the private sector a small-scale mining agreement

in order to enhance national growth in a way that effectively safeguards the All submerged lands within the contiguous zone and in the exclusive
environment and protect the rights of affected communities. economic zone of the Philippines are hereby declared to be mineral
reservations.

A ten per centum (10%) share of all royalties and revenues


CHAPTER II to be derived by the government from the development and
GOVERNMENT MANAGEMENT utilization of the mineral resources within mineral reservations as
provided under this Act shall accrue to the Mines and Geosciences
Section 4 Bureau
Ownership of Mineral Resources
*"Contiguous zone" refers to water, sea bottom and
substratum measured twenty-four nautical miles (24
Mineral resources are owned by the State and the exploration,
n.m.) seaward from the base line of the Philippine archipelago.
development, utilization, and processing thereof shall be under its full
control and supervision. The State may directly undertake such activities or
it may enter into mineral agreements with contractors. "Exclusive economic zone" means the water, sea
bottom and subsurface measured from the baseline of
the Philippine archipelago up to two hundred nautical
"Contractor" means a qualified person, who is a party to a mineral
miles (200 n.m.) offshore.
agreement orto a financial or technical assistance agreement.
The Director may deputize,
Section 7
Periodic Review of Existing Mineral Reservations when necessary, any member or unit of the Philippine National Police,
barangay, duly registered non-governmental organization (NGO) or any
The Secretary shall periodically review existing mineral reservations for the qualified person to police all mining activities.
purpose of determining whether their continued existence is consistent
with the national interest, Section 12. Survey, Charting and Delineation of Mining
Areas. –
and upon his recommendation, the President may, by proclamation, alter or A sketch plan or map of the contract or mining area
modify the boundaries thereof or revert the same to the public domain prepared by a deputized geodetic engineer suitable for publication
purposes shall be required during the filing of a mineral agreement
Section 8 or financial or technical assistance agreement application.
Authority of the Department
Thereafter, mining area shall be surveyed and monumented by a deputized
geodetic engineer and the survey plan shall be approved by the Director
The Department of Environment and Natural Resources shall be the primary
before the approval of the mining feasibility.
government agency responsible for the conservation, management,
development, and proper use of the State's mineral resources
Monumented = Mark on the ground
in reservations, watershed areas, and lands of the public domain
Section 14. Recording System. –
There shall be established a national and regional filing and recording
The Secretary shall have the authority to enter into mineral agreements on system. A mineral resource database system shall be set up in the Bureau
behalf of the Government upon the recommendation of the Director which shall include, a mineral rights management system.

promulgate such rules and regulations as may be necessary to implement The Bureau shall publish at least annually, a mineral gazette of
the intent and provisions of this Act. nationwide circulation containing,
a current list of mineral rights,
Section 9 their locations in the map,
Authority of the Bureau mining rules and regulations,
other official acts affecting mining,
The Mines and Geosciences Bureau shall have direct charge in the and other relevant information
administration and disposition of mineral lands and mineral resources and
shall conduct researches as well as exploration surveys. CHAPTER III
SCOPE OF APPLICATION
The Director shall recommend to the Secretary the granting of mineral
agreements and shall monitor the compliance of the terms and conditions Section 15
thereof. Scope of Application
This Act shall govern the exploration, development, utilization and b. Near or under public or private buildings, cemeteries,
processing of all mineral resources. archeological and historic sites, bridges, highways,
waterways, railroads, reservoirs, dams or other
Section 16 infrastructure projects, public or private works including
Opening of Ancestral Lands for Mining Operations plantations or valuable crops,

No ancestral land shall be opened for mining-operations without prior except upon written consent of the government agency
consent of the indigenous cultural community concerned. or private entity concerned;

In the event of an agreement with an indigenous cultural community,the c. In areas covered by valid and existing mining rights;
royalty payment, upon utilization of the minerals shall be agreed upon by
the parties. The said royalty shall form part of a trust fund for the d. In areas expressly prohibited by law;
socioeconomic well-being of the indigenous cultural community.
e. In areas covered by small-scale miners, unless with
Section 18 prior consent of the small-scale miners,
Areas Open to Mining Operations
in which case a royalty payment upon the utilization of
Subject to any existing rights or reservations and prior agreements of all minerals shall be agreed upon by the parties, said royalty
parties, all mineral resources in public or private lands, including timber or forming a trust fund for the socioeconomic development
forestlands as defined in existing laws, shall be open to mineral agreements of the community concerned; and
or financial or technical assistance agreement applications.
f. Old growth or virgin forests, proclaimed watershed
Any conflict that may arise under this provision shall be heard and resolved forest reserves, wilderness areas, mangrove forests,
by the panel of arbitrators. mossy forests, national parks provincial/municipal forests,
parks, greenbelts, game refuge and bird sanctuaries as
Section 19 defined by law and in areas expressly prohibited under
Areas Closed to Mining Applications the National Integrated Protected Areas System (NIPAS)
under Republic Act No. 7586
Mineral
agreement or financial or technical assistance agreement
applications shall not be allowed:
CHAPTER IV
a. In military and other government reservations, except EXPLORATION PERMIT
upon prior written clearance by the government agency
concerned; Section 20
Exploration Permit
An exploration permit grants the right to conduct exploration for all c. Offshore, beyond five hundred meters (500m) from the
minerals in specified areas. The Bureau shall have the authority to grant an mean low tide level:
exploration Permit to a qualified person.
1. for individuals, one hundred (100) blocks; and
Section 21
Terms and Conditions of the Exploration Permit 2. for partnerships, corporations, cooperatives,
or associations, one thousand (1,000) blocks.
shall be for a period of two (2) years, subject to annual review and
relinquishment or renewal upon the recommendation of the Director. Section 23
Rights and Obligations of the Permittee
Section 22
Maximum Areas for Exploration Permit The Permittee shall have the right to enter, occupy and explore the area:
Provided, That
For purposes of the delineation of the contract or mining areas under this
Act The Philippine territory and its exclusive economic zone shall be if private or other parties are affected, the permittee shall first discuss with
divided into meridional blocks of one-half (1/2) minute of latitude the said parties the extent, necessity, and manner of his entry, occupation
and one-half (1/2) minute of longitude. and exploration and in case of disagreement, a panel of arbitrators shall
resolve the conflict or disagreement.
The maximum area that a qualified person may hold at any one time shall
be: The permittee may apply for a mineral production sharing agreement, joint
venture agreement, co-production agreement or financial or technical
a. Onshore, in any one province assistance agreement over the permit area.

1. for individuals, twenty (20) blocks: and That the exploration period covered by the exploration permit shall be
included as part of the exploration period of the mineral agreement or
2. for partnerships, corporations, cooperatives, financial or technical assistance agreement.
or associations, two hundred (200) blocks.
Section 24
b. Onshore, in the entire Philippines Declaration of Mining Project Feasibility

1. for individuals, forty (40) blocks; and A holder of an exploration permit may, file with the Bureau a declaration of
mining project feasibility accompanied by a work program for development.
2. for partnerships, corporations, cooperatives, The approval of the mining project feasibility shall entitle the holder to an
or associations, four hundred (400) blocks. exclusive right to a mineral production sharing agreement or other mineral
agreements or financial or technical assistance agreement.
Section 25
Transfer or Assignment
An exploration permit may be transferred or assigned to a qualified person A qualified person may enter into any of the three (3) modes of mineral
subject to the approval of the Secretary upon the recommendation of the agreement with the government for the exploration, development and
Director. utilization of mineral resources:.

in case the applicant has been in the mining industry for any length of time,
he should possess a satisfactory environmental track record
CHAPTER V
MINERAL AGREEMENTS Section 28
Maximum Areas for Mineral Agreement
Section 26
Modes of Mineral Agreement a. Onshore, in any one province

For purposes of mining operations, a mineral agreement may take the 1. for individuals, ten (10) blocks; and
following forms as herein defined:
2. for partnerships, cooperatives, associations, or
a. Mineral production sharing agreement is an agreement corporations, one hundred (100) blocks.
where the Government grants to the contractor the
exclusive right to conduct mining operations within a b. Onshore, in the entire Philippines
contract area and shares in the gross output. The
contractor shall provide the financing, technology, 1. for individuals, twenty (20) blocks; and
management and personnel necessary for the
implementation of this agreement.
2. for partnerships, cooperatives, associations, or
corporations, two hundred (200) blocks.
b. Co-production agreement is an agreement between
the Government and the contractor wherein the
c. Offshore, in the entire Philippines
Government shall provide inputs to the mining operations
other than the mineral resource.
1. for individuals fifty (50) blocks;
c. Joint venture agreement is an agreement where a joint-
2. for partnerships, cooperatives, associations, or
venture company is organized by the Government and
corporations, five hundred (500) blocks; and
the contractor with both parties having equity shares.
Aside from earnings in equity, the Government shall be
entitled to a share in the gross output. 3. for the exclusive economic zone, a larger area
to be determined by the Secretary.
Section 27
Eligibility Section 29
Filing and Approval of Mineral Agreements
All proposed mineral agreements shall be filed in the region where the
areas of interest are located, except in mineral reservations which shall be
filed with the Bureau.

The proposed mineral agreement will be approved by the Secretary and


copies thereof shall be submitted to the President.

the President shall provide a list to Congress of every approved mineral


agreement within thirty (30) days from its approval by the Secretary.

Section 32
Terms

Mineral agreements shall have a term not exceeding twenty-five (25) years,
renewable for not exceeding twenty-five (25) years under the same terms
and conditions thereof

After the renewal period, the operation of the mine may be undertaken by
the Government 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 equal the highest bid upon reimbursement of all reasonable
expenses of the highest bidder.

You might also like