PHILIPPINE

MINING
ACT OF 1995
Republic Act No. 7942
Philippine Mining Act of 1995
Enacted on March 3, 1995

Took effect on April 9, 1995

Institute a new system of mineral resources exploration development,

utilization and conservation in the Philippines
What is mining?
Is the extraction of valuable minerals and other materials from the
ground
Four Stages of Mining:
1. Exploration
2. Development and construction
3. Utilization or commercial operation
4. Final Mine Rehabilitation or Decommissioning
Highlights of the Mining Act of 1995
All mineral resources within the territory of the Republic of the Philippines are
owned by the State;
It shall be the responsibility of the State to promote the rational exploration,
development, utilization and conservation of mineral lands;
Local government empowerment;
Respect and concern for the indigenous cultural communities;
Equitable sharing of benefits of natural wealth;
Economic demands of present generation while providing the necessary foundation
for future generations;
Worldwide trend towards globalization; and
Protection for and wise management of the environment.
Government Management
The State shall recognize and protect the rights of the indigenous
cultural communities to their ancestral lands.
The President may establish mineral reservations upon the
recommendation of the Director (Mines and Geosciences Bureau)
through the Secretary (Department of Environment and Natural
Resources).
The State has control and supervision over mining operations and
enterprises
Authority of Department of
Environment and Natural Resources
Conservation, management, development and proper use of the States
mineral resources;
Enter into mineral agreements on behalf of the Government upon
recommendation of the MGB; and
Promulgate rules and regulations necessary to implement this Act
Authority of Mines and
Geosciences Bureau
Direct charge in administration and disposition of mineral lands and
resources;
Undertake researches as well as geological and mineral exploration
surveys;
Recommend to DENR the granting of mineral agreements;
Monitor compliance by the contractor of the terms and conditions of
the mineral agreements;
Confiscate surety, performance and guaranty bonds; and
Deputize, when necessary, any member unit of PNP, barangay, duly
registered NGO or any qualified person to police all mining activities/
Areas Open to Mining Operations
Military and other government reservations, upon prior written consent by
the government agency having jurisdiction over such areas;
Areas near or under public or private buildings, cemeteries, and
archaeological and historic sites, bridges, highways, waterways, railroads,
reservoirs, dams and other infrastructure projects, public or private works,
including plantations or valuable crops, upon written consent of the
concerned government agency or private entity, subject to technical
evaluation and validation by the MGB;
Areas covered by FTAA applications, which shall be opened, for quarry
resources upon written consent of the FTAA applicants/contractors.
However, mining applications for sand and gravel shall require no such
consent; and
DENR Project areas upon prior consent from the concerned agency.
Areas Closed to Mining Operations
Areas covered by valid and existing mining rights and applications;
Old growth or virgin forests, mossy forests, national parks,
provincial/municipal forests, tree parks, greenbelts, game refuge, bird
sanctuaries and areas proclaimed as marine reserve/marine parks and
sanctuaries and areas proclaimed as marine reserve/marine parks and
tourist zones as defined by law and identified initial components of the
NIPAS, and such areas as expressly prohibited thereunder, as well as under
DENR Administrative Order No. 25, s. 1992, and other laws;
Areas which the Secretary may exclude based, inter alia, or proper
assessment of their environmental impacts and implications on sustainable
land uses, such as built-up areas and critical watershed with appropriate
barangay/municipal/provincial Sanggunian ordinances specifying therein
the location and specific boundaries of the concerned area; and
Areas expressly prohibited by law.
Mining Permits Granted to
Qualified Persons
Exploration Permit

Mineral Agreement

Financial or Technical Assistance

Agreements
Quarry Resources Permits

Small-Scale Mining Permits

Mineral Processing Permit

Exploration Permit
Permits are issued to qualified individuals or local and foreign corporations
granting them to undertake purely mineral exploration activities.
For a term of two (2) years renewable for like terms but not to exceed a total
term of six (6) years for non-metallic minerals and eight (8) years for
metallic minerals.
Permittee may eventually apply for Mineral Agreement or FTAA, subject to
maximum areas limitations
The maximum areas allowed per qualified person under an Exploration
Permit are:
1,620 hectares in any one province or 3,240 hectares in the entire country for an
individual; and
16, 200 hectares in any one province or 32,400 hectares in the entire country for a
corporation, association, cooperative or partnership.
Mineral Agreement
Granted to individuals or local corporations giving them the right to
explore, develop and utilize the minerals within the contract area.
Three Modes of Mineral Agreements:
Mineral Production Sharing Agreement (MPSA)- an agreement wherein the
Government grants to the contractor the exclusive right to conduct mining
operations within, but not title over, the contract area and shares in the production
whether in kind or in value as the owner of the minerals therein.
Co-Production Agreement (CA)- an agreement between the Government and the
Contractor wherein the Government shall provide inputs to the mining operations
other than the mineral resources
Joint Venture Agreement (JVA)- an agreement where the Government and the
Contractor organize a joint venture company with both parties having equity
shares
Features of Mineral Agreement
Term of 25 years, renewable for another term of 25 years;
Exploration Period of two (2) years renewable for like terms but not to exceed a total
term of six (6) years for nonmetallic minerals or eight (8) years for metallic minerals;
Maximum allowable areas of 810 hectares in any one province or 1,620 hectares in
the entire country for an individual, or 8,100 hectares in any one province or 16,200
in the entire country for a corporation, association, cooperative or partnership.
Provides for mandatory relinquishment such that the maximum final area shall not
exceed 5,000 hectares for metallic minerals or 2,000 hectares for non-metallic
mines;
Subject to Environmental Work Program (EWP) during the exploration period, and
to Environmental Compliance Certificate (ECC) and Environmental Protection and
Enhancement Program (EPEP) during the development and operation period;
Approval by the DENR Secretary
Financial or Technical Assistance
Agreements (FTAA)
Mining contract for large-scale exploration, development and
utilization of minerals which allows up to 100% foreign equity
participation/ownership.
Some Terms and Conditions:
Term of 25 years, extendable for like periods;
Minimum capitalization, $4Million, or its peso equivalent;
Approval by the President, upon recommendation of the Negotiating Panel
composed of the DENR Secretary, the MGB Director, and representatives from
NEDA, DTI/BOE, Dept. of Finance, DENR Field Operations Office, DENR Legal
Office, and MGB Regional Office.
Quarry Resources Permits
Mining permits with areas not more than 5 hectares

Devolved to the Provincial Governor or the City Mayor for approval

upon recommendation of the Provincial/City Mining Regulatory Board
Term of five (5) years, renewable for like periods but not to exceed
twenty-five (25) years
Small Scale Mining Permits
Refers to mining activities which rely heavily on manual labor using
simple implement and methods and do not use explosives or heavy
mining equipment
Governed by RA No. 7076 or Peoples Small-Scale Mining Act of 1991
Mineral Processing Permit
permit granting the right to process minerals

Issued by the DENR Secretary with a term of 5 years and renewable

for like terms but not to exceed 25 years
 La Bugal-Blaan Tribal Association, Inc. v. Ramos
G.R. No. 127882
Deceber 1, 2004
FACTS

This petition for prohibition and mandamus challenges the constitutionality of Republic Act No.
7942 (The Philippine Mining Act of 1995), its implementing rules and regulations and the
Financial and Technical Assistance Agreement (FTAA) dated March 30, 1995 by the government
with Western Mining Corporation(Philippines) Inc. (WMCP).

Accordingly, the FTAA violated the 1987 Constitution in that it is a service contract and is
antithetical to the principle of sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to the prejudice of the Filipino
nation.

ISSUE

Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned
corporations to exploit the Philippine mineral resources.
 La Bugal-Blaan Tribal Association, Inc. v. Ramos
G.R. No. 127882
Deceber 1, 2004
HELD:
The Supreme Court upheld the constitutionality of the Philippine Mining Law,
its implementing rules and regulations insofar as they relate to financial and
technical agreements as well as the subject Financial and Technical Assistance
Agreement.

Full control is not anathematic to day-to-day management by the contractor,

provided that the State retains the power to direct overall strategy; and to set
aside, reverse or modify plans and actions of the contractor. The idea of full
control is similar to that which is exercised by the board of directors of a
private corporation, the performance of managerial, operational, financial,
marketing and other functions may be delegated to subordinate officers or
given to contractual entities, but the board retains full residual control of the
business.
Sources:
http://www.mgb10.com/policies/REVISED%20IRR%20OF%20MININ
G%20ACT%20OF%201995.pdf
http://www.lawphil.net/judjuris/juri2004/jan2004/gr_127882_2004.
html
http://www.lawphil.net/statutes/repacts/ra1995/ra_7942_1995.html