Republic Act No 7942

1 REPUBLIC ACT NO. 7942 [AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION]

Be it enacted by the Senate and House of Representatives Representatives of the Philippines i n Congress assembled: CHAPTR ! !"TR#$%CT#R& PR#'!S!#"S Section 1  Title  This Act shall be (no)n (no)n as the *Philippine +ining Act Act of  1,,-.* Section / $eclaration of Policy All mineral resources in public and private lands )ithin the territory and e0clusive economic one of the Republic of  the Philippines are o)ned by the State. !t shall be the respo responsi nsibili bility ty of the State State to promo promote te their their ration rational al e0plorat e0ploration2 ion2 developme development2 nt2 utiliation utiliation and conservat conservation ion throug through h the combi combined ned e3orts e3orts of gover governme nment nt and the private sector in order to enhance national gro)th in a )ay )ay that that e3ecti e3ectivel vely y safegu safeguar ards ds the enviro environme nment nt and protect the rights of a3ected communities. Section 4 $e5nition of Terms As used used in and for purpo purposes ses of this this Act2 Act2 the follo)in follo)ing g terms2 )hether in singular or plural2 shall mean: a. Ancest Ancestral ral lands lands refers refers to all lands lands e0clus e0clusive ively ly and actually actually possesse possessed2 d2 occupied2 occupied2 or utilied utilied by indigenous indigenous cultu cultural ral commu communit nities ies by themse themselve lves s or throug through h their their ancestors in accordance )ith their customs and traditions sinc since e time time imme immemo mori rial al22 and and as may may be de5n de5ned ed and and delineated by la). b. Bloc( or meridion meridional al bloc( means means an area area bounded bounded by one6half 718/9 minute of latitude and one6half 718/9 minute of long longit itud ude2 e2 cont contai aini ning ng appr appro o0ima 0imate tely ly eigh eighty ty6on 6one e hectares hectares 71 has.9. c. Burea Bureau u means means the +ines and ;eoscie ;eoscience nces s Burea Bureau u unde underr the the $epa $epart rtme ment nt of nvir nviron onme ment nt and and "atu "atura rall Resources. d. Carrying capacity capacity refers to the capacity of natural natural and human environments to accommodate and absorb change )ith )ithou outt e0pe e0perie rienc ncing ing cond condit itio ions ns of inst instab abili ility ty and and attendant degradation. e. Contig Contiguou uous s one refers refers to )ater2 )ater2 sea bottom bottom and substratum measured t)enty6four t)enty6four nautical mil es 7/< n.m.9 sea)ard from the base line of the Philippine archipelago. f. Contract area area means land or body of of )ater delineated delineated for purposes of e0ploration2 development2 or utiliation of  the minerals found therein. g. Contractor means a =uali5ed =uali5ed person acting acting alone or in consortium )ho is a party to a mineral agreement or to a 5nancial or technical assistance agreement. h. Co6produc Co6production tion agreeme agreement nt 7CA9 means an agreement agreement entered into bet)een the ;overnment and one or more contractors in accordance )ith Section />7b9 hereof. i. $epartment means means the $epartment $epartment of nvironment nvironment and "atural Resources.  ?. $evelopment means the )or( underta(en underta(en to e0plore and prepare an ore body or a mineral deposit for mining2 including the construction of necessary infrastructure and related facilities.

presents an evaluation of the environmental =uality and carrying capacity of an area. m. nvironmental nvironmental compliance certi5cate 7CC9 refers refers to the the docu docume ment nt issu issued ed by the the gove goverrnmen nmentt agen agency cy concerned certifying that the pro?ect under consideration )ill )ill not bring bring about about an unacce unaccepta ptable ble enviro environme nmenta ntall impac impactt and that that the propo proponen nentt has complied complied )ith )ith the re=ui re=uire remen ments ts of the envir environm onment ental al impac impactt statem statement ent system. n. nvironmental impact impact statement 7!S9 7!S9 is the document document )hich hich aims ims to iden identi tiffy2 pred predic ict2 t2 int interpr rpret2 and comm commun unic icat ate e info inforrmati mation on rega regarrding ding chan change ges s in environmental =uality associated )ith a proposed pro?ect and )hich )hich e0ami e0amines nes the range range of alter alternat native ives s for the ob?e ob?ect ctiv ives es of the the prop propos osal al and and thei theirr impa impact ct on the the environment. o. 0clusive economic economic one means the the )ater2 sea bottom bottom and and subs subsur urfa face ce meas measur ured ed from from the the base baselin line e of the the Philippine archipelago up to t)o hundred nautical miles 7/@@ n.m.9 o3shore. p. 0isti 0isting ng mining8= mining8=uar uarryi rying ng right means means a valid valid and subsisting mining claim or permit or =uarry permit or any min mining ing lea lease cont contra ract ct or agr agreement ment cover overin ing g a mineralied mineralied area area granted8i granted8issue ssued d under under pertinent pertinent mining mining la)s. =. 0ploratio 0ploration n means the searching searching or prospec prospecting ting for mine minera rall reso resour urce ces s by geol geolog ogic ical al22 geoc geoche hemi mica call or geop geophy hysic sical al surv survey eys2 s2 remo remote te sens sensing ing22 test test pitti pitting ng22 trenchin trenching2 g2 drilling2 drilling2 shaft shaft sin(ing2 sin(ing2 tunneling tunneling or any other means means for the purpos purpose e of deter determini mining ng the e0ist e0istenc ence2 e2 e0tent2 =uantity and =uality thereof and the feasibility of  mining them for pro5t. r. inancial inancial or technical assistance assistance agreement agreement means a contract contract involving 5nancial 5nancial or technical technical assistan assistance ce for large6sc large6scale ale e0plorat e0ploration2 ion2 developmen development2 t2 and utiliatio utiliation n of  mineral resources. resources. s. orce ma?eure means acts or circumstances beyond the reasonable control of contractor including2 but not limited to2 )ar2 rebellion rebellion22 insurrect insurrection2 ion2 riots2 riots2 civil disturbanc disturbance2 e2 bloc(ade2 sabotage2 embargo2 stri(e2 loc(out2 any dispute )ith surface o)ners and other labor disputes2 epidemic2 eart earth= h=ua ua(e (e22 stor storm2 m2 ood ood or othe otherr adve advers rse e )eat )eathe herr conditions2 e0plosion2 5re2 adverse action by government or by any instrumentalit instrumentality y or subdivision subdivision thereof2 thereof2 act of  ;od ;od or any any publ public ic enem enemy y and and any any caus cause e that that here herein in describe over )hich the a3ected party has no reasonable control. t. oreig oreign6o)n n6o)ned ed corporatio corporation n means any corporat corporation2 ion2 partnership2 association2 or cooperative duly registered in accordance )ith la) in )hich less than 5fty per centum 7-@9 of the capital i s o)ned by ilipino citiens. u. ;overnment means means the government government of the Republic Republic of  the Philippines. v. ;ros ;ross s outp output ut means means the actua actuall mar( mar(et et value value of  minera minerals ls or minera minerall produ product cts s from from its mining mining area area as de5ned in the "ational !nternal Revenue Code. ). !ndigenous cultural cultural community means a group group or tribe of indigenous indigenous ilipinos ilipinos )ho have continuously continuously lived as communities communities on communally communally6boun 6bounded ded and de5ned de5ned land since time immemorial and have succeeded in preserving2 maintainin maintaining2 g2 and sharing sharing common common bonds bonds of languages languages22 customs2 customs2 tradition traditions2 s2 and other other distinctiv distinctive e cultural cultural traits2 traits2 and as may be de5ned and delineated by la). 0. Doint Doint venture venture agreement agreement 7D'A9 7D'A9 means an agreement agreement entered into bet)een the ;overnment and one or more contractors in accordance )ith Section />7c9 hereof.

(. $ire $irect ctor or means means the $ire $irect ctor or of the the +ine +ines s and and ;eosciences Bureau.

y. +ineral processing processing means the milling2 milling2 bene5ciation or upgrad upgrading ing of ores ores or minera minerals ls and roc(s roc(s or by simila similarr means to convert the same i nto mar(etable products. products.

l. cologica cologicall pro5le or eco6pro5le eco6pro5le refers refers to geographic6 geographic6 based instruments for planners and decision6ma(ers )hich

. +ine )aste )astes s and tailings tailings shall shall mean soil and roc( roc( materials from surface or underground mining and milling

/ operations )ith no economic value to the generator of the same. aa. +inerals refers to all naturally occurring inorganic substance in solid2 gas2 li=uid2 or any intermediate state e0cluding energy materials such as coal2 petroleum2 natural gas2 radioactive materials2 and geothermal energy. ab. +ineral agreement means a contract bet)een the government and a contractor2 involving mineral production6sharing agreement2 co6production agreement2 or ? oint6venture agreement. ac. +ineral land means any area )here mineral resources are found. ad. +ineral resource means any concentration minerals8roc(s )ith potential economic value.

of 

ae. +ining area means a portion of the contract area identi5ed by the contractor for purposes of development2 mining2 utiliation2 and sites for support facilities or in the immediate vicinity of the mining operations. af. +ining operation means mining activities involving e0ploration2 feasibility2 development2 utiliation2 and processing. ag. "on6governmental organiation 7";#9 includes nonstoc(2 nonpro5t organiations involved in activities dealing )ith resource and environmental conservation2 management and protection. ah. "et assets refers to the property2 plant and e=uipment as reected in the audited 5nancial statement of the contractor net of depreciation2 as computed for ta0 purposes2 e0cluding appraisal increase and construction in progress. ai. #3shore means the )ater2 sea bottom and subsurface from the shore or coastline rec(oned from the mean lo) tide level up to the t)o hundred nautical miles 7/@@ n.m.9 e0clusive economic one including the archipelagic sea and contiguous one. a?. #nshore means the land)ard side from the mean tide elevation2 including submerged lands in la(es2 rivers and cree(s. a(. #re means a naturally occurring substance or material from )hich a mineral or element can be mined and8or processed for pro5t.

and duly registered in accordance )ith la) at least si0ty per centum 7>@9 of the capital of )hich is o)ned by citiens of the Philippines: Provided2 That a legally organied foreign6o)ned corporation shall be deemed a =uali5ed person for purposes of granting an e0ploration permit2 5nancial or technical assistance agreement or mineral processing permit. ar. Euarrying means the process of e0tracting2 removing and disposing =uarry resources found on or underneath the surface of private or public land. as. Euarry permit means a document granted to a =uali5ed person for the e0traction and utiliation of =uarry resources on public or private lands. at. Euarry resources refers to any common roc( or other mineral substances as the $irector of +ines and ;eosciences Bureau may declare to be =uarry resources such as2 but not limited to2 andesite2 basalt2 conglomerate2 coral sand2 diatomaceous earth2 diorite2 decorative stones2 gabbro2 granite2 limestone2 marble2 marl2 red burning clays for potteries and bric(s2 rhyolite2 roc( phosphate2 sandstone2 serpentine2 shale2 tu32 volcanic cinders2 and volcanic glass: Provided2 That such =uarry resources do not contain metals or metallic constituents and8or other valuable minerals in economically )or(able =uantities: Provided2 further2 That non6metallic minerals such as (aolin2 feldspar2 bull =uart2 =uart or silica2 sand and pebbles2 bentonite2 talc2 asbestos2 barite2 gypsum2 bau0ite2 magnesite2 dolomite2 mica2 precious and semi6 precious stones2 and other non6metallic minerals that may later be discovered and )hich the: $irector declares the same to be of economically )or(able =uantities2 shall not be classi5ed under the category of =uarry resources. au. Regional director means the regional director of any mines regional oFce under the $epartment of  nvironment and "atural Resources. av. Regional oFce means any of the mines regional oFces of the $epartment of nvironment and "atural Resources. a). Secretary means the Secretary of the $epartment of  nvironment and "atural Resources. a0. Special allo)ance refers to payment to the claim6 o)ners or surface right6o)ners particularly during the transition period from Presidential $ecree "o. 4 and 0ecutive #rder "o. /G,2 series of 1,G. ay. State means the Republic of the Philippines.

al. Permittee means the holder of an e0ploration permit. am. Pollution control and infrastructure devices refers to infrastructure2 machinery2 e=uipment and8or improvements used for impounding2 treating or neutraliing2 precipitating2 5ltering2 conveying and cleansing mine industrial )aste and tailings as )ell as eliminating or reducing haardous e3ects of solid particles2 chemicals2 li=uids or other harmful byproducts and gases emitted from any facility utilied in mining operations for their disposal. an. President means the President of the Republic of the Philippines. ao. Private land refers to any land belonging to any private person )hich includes alienable and disposable land being claimed by a holder2 claimant2 or occupant )ho has already ac=uired a vested right thereto under the la)2 although the corresponding certi5cate or evidence of title or patent has not been actually issued. ap. Public land refers to lands of the public domain )hich have been classi5ed as agricultural lands and sub?ect to management and disposition or concession under e0isting la)s. a=. Euali5ed person means any citien of the Philippines )ith capacity to contract2 or a corporation2 partnership2 association2 or cooperative organied or authoried for the purpose of engaging in miring2 )ith technical and 5nancial capability to underta(e mineral resources development

a. %tiliation means the e0traction or disposition of  minerals. CHAPTR !! ;#'R"+"T +A"A;+"T Section < #)nership of +i neral Resources +ineral resources are o)ned by the State and the e0ploration2 development2 utiliation2 and processing thereof shall be under its full control and supervision. The State may directly underta(e such activities or it may enter into mineral agreements )ith contractors.  The State shall recognie and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution. Section +ineral Reservations hen the national interest so re=uires2 such as )hen there is a need to preserve strategic ra) materials for industries critical to national development2 or certain minerals for scienti5c2 cultural or ecological value2 the President may establish mineral reservations upon the recommendation of the $irector through the Secretary. +ining operations in e0isting mineral reservations and such other reservations as may thereafter be established2 shall be underta(en by the $epartment or through a contractor: Provided2 That a small scale6mining cooperative covered by Republic Act "o. G@G> shall be given preferential right to apply for a small6scale mining agreement for a ma0imum aggregate

4 area of t)enty65ve percent 7/-9 of such mineral reservation2 sub?ect to valid e0isting mining8=uarrying rights as provided under Section 11/ Chapter II hereof. All submerged lands )ithin the contiguous one and in the e0clusive economic one of the Philippines are hereby declared to be mineral reservations. A ten per centum 71@9 share of all royalties and revenues to be derived by the government from the development and utiliation of the mineral resources )ithin mineral reservations as provided under this Act shall accrue to the +ines and ;eosciences Bureau to be allotted for special pro?ects and other administrative e0penses related to the e0ploration and development of  other mineral reservations mentioned in Section > hereof. Section > #ther Reservations +ining operations in reserved lands other than mineral reservations may be underta(en by the $epartment2 sub?ect to limitations as herein provided. !n the event that the $epartment cannot underta(e such activities2 they may be underta(en by a =uali5ed person in accordance )ith the rules and regulations promulgated by the Secretary. The right to develop and utilie the minerals found therein shall be a)arded by the President under such terms and conditions as recommended by the $irector and approved by the Secretary: Provided2 That the party )ho undertoo( the e0ploration of said reservation shall be given priority. The mineral land so a)arded shall be automatically e0cluded from the reservation during the term of the agreement: Provided2 further2 That the right of the lessee of a valid mining contract e0isting )ithin the reservation at the time of its establishment shall not be pre?udiced or impaired. Section G Periodic Revie) of 0isting +ineral Reservations  The Secretary shall periodically revie) e0isting mineral reservations for the purpose of determining )hether their continued e0istence is consistent )ith the national interest2 and upon his recommendation2 the President may2 by proclamation2 alter or modify the boundaries thereof or revert the same to the public domain )ithout pre?udice to prior e0isting rights. Section  Authority of the $epartment  The $epartment shall be the primary government agency responsible for the conservation2 management2 development2 and proper use of the StateJs mineral resources including those in reservations2 )atershed areas2 and lands of the public domain. The Secretary shall have the authority to enter into mineral agreements on behalf of the ;overnment upon the recommendation of  the $irector2 promulgate such rules and regulations as may be necessary to implement the intent and provisions of this Act. Section , Authority of the Bureau  The Bureau shall have direct charge in the administration and disposition of mineral lands and mineral resources and shall underta(e geological2 mining2 metallurgical2 chemical2 and other researches as )ell as geological and mineral e0ploration surveys. The $irector shall recommend to the Secretary the granting of mineral agreements to duly =uali5ed persons and shall monitor the compliance by the contractor of the terms and conditions of the mineral agreements. The Bureau may con5scate surety2 performance and guaranty bonds posted through an order to be promulgated by the $irector. The $irector may deputie2 )hen necessary2 any member or unit of the Philippine "ational Police2 barangay2 duly registered non6governmental organiation 7";#9 or any =uali5ed person to police all mining activities. Section 1@ Regional #Fces

 There shall be as many regional oFces in the country as may be established by the Secretary2 upon the recommendation of the $irector. Section 11 Processing of Applications  The system of processing applications for mining rights shall be prescribed in the rules and regulations of this Act. Section 1/ Survey2 Charting and $elineation of +ining Areas A s(etch plan or map of the contract or mining area prepared by a deputied geodetic engineer suitable for publication purposes shall be re=uired during the 5ling of a mineral agreement or 5nancial or technical assistance agreement application. Thereafter2 the contract or mining area shall be surveyed and monumented by a deputied geodetic engineer or bureau geodetic engineer and the survey plan shall be approved by the $irector before the approval of the mining feasibility. Section 14 +eridional Bloc(s or purposes of the delineation of the contract or mining areas under this Act2 the Philippine territory and its e0clusive economic one shall be divided into meridional bloc(s of one6half 718/9 minute of latitude and one6half  718/9 minute of l ongitude. Section 1< Recording System  There shall be established a national and regional 5ling and recording system. A mineral resource database system shall be set up in the Bureau )hich shall include2 among others2 a mineral rights management system. The Bureau shall publish at least annually2 a mineral gaette of  nation)ide circulation containing among others2 a current list of mineral rights2 their location in the map2 mining rules and regulations2 other oFcial acts a3ecting mining2 and other information relevant to mineral resources development. A system and publication fund shall be included in the regular budget of the Bureau. CHAPTR !!! SC#P # APPK!CAT!#" Section 1Scope of Application  This Act shall govern the e0ploration2 development2 utiliation and processing of all mi neral resources. Section 1> #pening of Ancestral Kands for +i ning #perations "o ancestral land shall be opened for mining6operations )ithout prior consent of the indigenous cultural community concerned. Section 1G Royalty Payments for !ndigenous Cultural Communities !n the event of an agreement )ith an indigenous cultural community pursuant to the preceding section2 the royalty payment2 upon utiliation of the minerals shall be agreed upon by the parties. The said royalty shall form part of a trust fund for the socioeconomic )ell6being of the indigenous cultural community. Section 1 Areas #pen to +ining #perations Sub?ect to any e0isting rights or reservations and prior agreements of all parties2 all mineral resources in public or private lands2 including timber or forestlands as de5ned in e0isting la)s2 shall be open to mineral agreements or 5nancial or technical assistance agreement applications. Any conict that may arise under this provision shall be heard and resolved by the panel of arbitrators. Section 1, Areas Closed to +ining Applications

<

+ineral agreement or 5nancial or technical assistance agreement applications shall not be allo)ed: a. !n military and other government reservations2 e0cept upon prior )ritten clearance by the government agency concernedL b. "ear or under public or private buildings2 cemeteries2 archeological and historic sites2 bridges2 high)ays2 )ater)ays2 railroads2 reservoirs2 dams or other infrastructure pro?ects2 public or private )or(s including plantations or valuable crops2 e0cept upon )ritten consent of the government agency or private entity concernedL c. !n areas covered by valid and e0isting mining rightsL d. !n areas e0pressedly prohibited by la)L e. !n areas covered by small6scale miners as de5ned by la) unless )ith prior consent of the small6scale miners2 in )hich case a royalty payment upon the utiliation of  minerals shall be agreed upon by the parties2 said royalty forming a trust fund for the socioeconomic development of  the community concernedL and f. #ld gro)th or virgin forests2 proclaimed )atershed forest reserves2 )ilderness areas2 mangrove forests2 mossy forests2 national par(s provincial8municipal forests2 par(s2 greenbelts2 game refuge and bird sanctuaries as de5ned by la) and in areas e0pressly prohibited under the "ational !ntegrated Protected Areas System 7"!PAS9 under Republic Act "o. G->2 $epartment Administrative #rder "o. /-2 series of 1,,/ and other la)s. CHAPTR !' IPK#RAT!#" PR+!T Section /@ 0ploration Permit An e0ploration permit grants the right to conduct e0ploration for all minerals in speci5ed areas. The Bureau shall have the authority to grant an e0ploration Permit to a =uali5ed person. Section /1  Terms and Conditions of the 0ploration Permit An e0ploration permit shall be for a period of t)o 7/9 years2 sub?ect to annual revie) and relin=uishment or rene)al upon the recommendation of the $irector. Section // +a0imum Areas for 0ploration Permit  The ma0imum area that a =uali5ed person may hold at any one time shall be: a. #nshore2 in any one province 1. for individuals2 t)enty 7/@9 bloc(s: and b. for partnerships2 corporations2 cooperatives2 associations2 t)o hundred 7/@@9 bloc(s.

or

 The permittee shall underta(e an e0ploration )or( on the area as speci5ed by its permit based on an approved )or( program. Any e0penditure in e0cess of the yearly budget of the approved )or( program may be carried for)ard and credited to the succeeding years covering the duration of  the permit. The Secretary2 through the $irector2 shall promulgate rules and regulations governing the terms and conditions of the permit.  The permittee may apply for a mineral production sharing agreement2 ?oint venture agreement2 co6production agreement or 5nancial or technical assistance agreement over the permit area2 )hich application shall be granted if  the permittee meets the necessary =uali5cations and the terms and conditions of any such agreement: Provided2  That the e0ploration period covered by the e0ploration permit shall be included as part of the e0ploration period of the mineral agreement or 5nancial or technical assistance agreement. Section /< $eclaration of +ining Pro?ect easibility A holder of an e0ploration permit )ho determines the commercial viability of a pro?ect covering a mining area may2 )ithin the term of the permit2 5le )ith the Bureau a declaration of mining pro?ect feasibility accompanied by a )or( program for development. The approval of the mining pro?ect feasibility and compliance )ith other re=uirements provided in this Act shall entitle the holder to an e0clusive right to a mineral production sharing agreement or other mineral agreements or 5nancial or technical assistance agreement. Section / Transfer or Assignment An e0ploration permit may be transferred or assigned to a =uali5ed person sub?ect to the approval of the Secretary upon the recommendation of the $irector. CHAPTR ' +!"RAK A;R+"TS Section /> +odes of +ineral Agreement or purposes of mining operations2 a mineral agreement may ta(e the follo)ing forms as herein de5ned: a. +ineral production sharing agreement is an agreement )here the ;overnment grants to the contractor the e0clusive right to conduct mining operations )ithin a contract area and shares in the gross output. The contractor shall provide the 5nancing2 technology2 management and personnel necessary for the implementation of this agreement. b. Co6production agreement is an agreement bet)een the ;overnment and the contractor )herein the ;overnment shall provide inputs to the mining operations other than the mineral resource.

b. #nshore2 in the entire Philippines 1. for individuals2 forty 74 +ines Safety and nvironmental Protection All contractors and permittees shall strictly comply )ith all the mines safety rules and regulations as may be promulgated by the Secretary concerning the safe and sanitary up(eep of the mining operations and achieve )aste6free and eFcient mine development. Personnel of  the $epartment involved in the implementation of mines safety2 health and environmental rules and regulations shall be covered under Republic Act "o. G4@-. Section >< +ine Kabor "o person under si0teen 71>9 years of age shall be employed in any phase of mining operations and no

person under eighteen 719 years employed underground in a mine.

of age shall

be

Section >+ine Supervision All mining and =uarrying operations that employ more than 5fty 7-@9 )or(ers shall have at least one 719 licensed mining engineer )ith at least 5ve 7-9 years of e0perience in mining operations2 and one 719 registered foreman. Section >> +ine !nspection  The regional director shall have e0clusive ?urisdiction over the safety inspection of all installations2 surface or underground2 in mining operations at reasonable hours of  the day or night and as much as possible in a manner that )ill not impede or obstruct )or( in progress of a contractor or permittee. Section >G Po)er to !ssue #rders  The mines regional director shall2 in consultation )ith the nvironmental +anagement Bureau2 forth)ith or )ithin such time as speci5ed in his order2 re=uire the contractor to remedy any practice connected )ith mining or =uarrying operations2 )hich is not in accordance )ith safety and anti6pollution la)s and regulations. !n case of  imminent danger to life or property2 the mines regional director may summarily suspend the mining or =uarrying operations until the danger is removed2 or appropriate measures are ta(en by the contractor or permittee. Section > Report of Accidents !n case of any incident or accident2 causing or creating the danger of loss of life or serious physical in?uries2 the person in charge of operations shall immediately report the same to the regional oFce )here the operations are situated. ailure to report the same )ithout ?usti5able reason shall be a cause for the imposition of  administrative sanctions prescribed in the rules and regulations implementing this Act. Section >, nvironmental Protection very contractor shall underta(e an environmental protection and enhancement program covering the period of the mineral agreement or permit. Such environmental program shall be incorporated in the )or( program )hich the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement or permit. The )or( program shall include not only plans relative to mining operations but also to rehabilitation2 regeneration2 revegetation and reforestation of mineralied areas2 slope stabiliation of  mined6out and tailings covered areas2 a=uaculture2 )atershed development and )ater conservationL and socioeconomic development. Section G@ nvironmental !mpact Assessment 7!A9 0cept during the e0ploration period of a mineral agreement or 5nancial or technical assistance agreement or an e0ploration permit2 an environmental clearance certi5cate shall be re=uired based on an environmental impact assessment and procedures under the Philippine nvironmental !mpact Assessment System including Sections /> and /G of the Kocal ;overnment Code of 1,,1 )hich re=uire national government agencies to maintain ecological balance2 and prior consultation )ith the local government units2 non6governmental and peopleJs organiations and other concerned sectors of the community: Provided2 That a completed ecological pro5le of the proposed mining area shall also constitute part of  the environmental impact assessment. PeopleJs organiations and non6governmental organiations shall be allo)ed and encouraged to participate in ensuring that contractors8permittees shall observe all the re=uirements of environmental protection.

, ntry into Private Kands and Concession Areas Section G1 Rehabilitation Contractors and permittees shall technically and biologically rehabilitate the e0cavated2 mined6out2 tailings covered and disturbed areas to the condition of  environmental safety2 as may be provided in the implementing rules and regulations of this Act. A mine rehabilitation fund shall be created2 based on the contractorJs approved )or( program2 and shall be deposited as a trust fund in a government depository ban( and used for physical and social rehabilitation of areas and communities a3ected by mining activities and f or research on the social2 technical and preventive aspects of  rehabilitation. ailure to ful5ll the above obligation shall mean immediate suspension or closure of the mining activities of the contractor8permittee concerned. CHAPTR I!! A%I!K!AR& +!"!"; R!;HTS Section G/  Timber Rights Any provision of la) to the contrary not)ithstanding2 a contractor may be granted a right to cut trees or timber )ithin his mining area as may be necessary for his mining operations sub?ect to forestry la)s2 rules and regulations: Provided2 That if the land covered by the mining area is already covered by e0isting timber concessions2 the volume of timber needed and the manner of cutting and removal thereof shall be determined by the mines regional director2 upon consultation )ith the contractor2 the timber concessionaire8permittee and the orest +anagement Bureau of the $epartment: Provided2 further2 That in case of disagreement bet)een the contractor and the timber concessionaire2 the matter shall be submitted to the Secretary )hose decision shall be 5nal. The contractor shall perform reforestation )or( )ithin his mining area in accordance )ith forestry la)s2 rules and regulations. Section G4 ater Rights A contractor shall have )ater rights for mining operations upon approval of application )ith the appropriate government agency in accordance )ith e0isting )ater la)s2 rules and regulations promulgated thereunder: Provided2 That )ater rights already granted or vested through long use2 recognied and ac(no)ledged by local customs2 la)s2 and decisions of courts shall not thereby be impaired: Provided2 further2 That the ;overnment reserves the right to regulate )ater rights and the reasonable and e=uitable distribution of )ater supply so as to prevent the monopoly of the use thereof. Section G< Right to Possess 0plosives A contractor8e0ploration permittee shall have the right to possess and use e0plosives )ithin his contract8permit area as may be necessary for his mining operations upon approval of application )ith the appropriate government agency in accordance )ith e0isting la)s2 rules and regulations promulgated thereunder: Provided2 That the ;overnment reserves the right to regulate and control the e0plosive accessories to ensure safe mi ning operations. Section Gasement Rights hen mining areas are so situated that for purposes of  more convenient mining operations it is necessary to build2 construct or install on the mining areas or lands o)ned2 occupied or leased by other persons2 such infrastructure as roads2 railroads2 mills2 )aste dump sites2 tailings ponds2 )arehouses2 staging or storage areas and port facilities2 tram)ays2 run)ays2 airports2 electric transmission2 telephone or telegraph lines2 dams and their normal ood and catchment areas2 sites for )ater )ells2 ditches2 canals2 ne) river beds2 pipelines2 umes2 cuts2 shafts2 tunnels2 or mills2 the contractor2 upon payment of   ?ust compensation2 shall be entitled to enter and occupy said mining areas or lands. Section G>

Sub?ect to prior noti5cation2 holders of mining rights shall not be prevented from entry into private lands and concession areas by surface o)ners2 occupants2 or concessionaires )hen conducting mining operations therein: Provided2 That any damage done to the property of the surface o)ner2 occupant2 or concessionaire as a conse=uence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations: Provided2 further2 That to guarantee such compensation2 the person authoried to conduct mining operation shall2 prior thereto2 post a bond )ith the regional director based on the type of properties2 the prevailing prices in and around the area )here the mining operations are to be conducted2 )ith surety or sureties satisfactory to the regional director. CHAPTR I!!! STTK+"T # C#"K!CTS Section GG Panel of Arbitrators  There shall be a panel of arbitrators in the regional oFce of the $epartment composed of three 749 members2 t)o 7/9 of )hom must be members of the Philippine Bar in good standing and one a licensed mining engineer or a professional in a related 5eld2 and duly designated by the Secretary as recommended by the +ines and ;eosciences Bureau $irector. Those designated as members of the panel shall serve as such in addition to their )or( in the $epartment )ithout receiving any additional compensation As much as practicable2 said members shall come from the di3erent bureaus of the $epartment in the region. The presiding oFcer thereof shall be selected by the dra)ing of lots. His tenure as presiding oFcer shall be on a yearly basis. The members of the panel shall perform their duties and obligations in hearing and deciding cases until their designation is )ithdra)n or revo(ed by the Secretary. ithin thirty 74@9 )or(ing days2 after the submission of the case by the parties for decision2 the panel shall have e0clusive and original ?urisdiction to hear and decide on the follo)ing: a. $isputes involving rights to mining areasL b. $isputes involving mineral agreements or permitsL c. $isputes involving surface o)ners2 occupants and claimholders8concessionairesL and d. $isputes pending before the Bureau and $epartment at the date of the e3ectivity of this Act. Section G Appellate Durisdiction

the

 The decision or order of the panel of arbitrators may be appealed by the party not satis5ed thereto to the +ines Ad?udication Board )ithin 5fteen 71-9 days from receipt thereof )hich must decide the case )ithin thirty 74@9 days from submission thereof for decision. Section G, +ines Ad?udication Board  The +ines Ad?udication Board shall be composed of three 749 members. The Secretary shall be the chairman )ith the $irector of the +ines and ;eosciences Bureau and the %ndersecretary for #perations of the $epartment as members thereof. The Board shall have the follo)ing po)ers and functions:   a. To promulgate rules and regulations governing the hearing and disposition of cases before it2 as )ell as those pertaining to its internal functions2 and such rules and regulations as may be necessary to carry out its functionsL b. To administer oaths2 summon the parties to a controversy2 issue subpoenas re=uiring the attendance and testimony of )itnesses or the production of such boo(s2 papers2 contracts2 records2 statement of accounts2 agreements2 and other documents as may be material to a  ?ust determination of the matter under investigation2 and to testify in any investigation or hearing conducted in pursuance of this ActL

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c. To conduct hearings on all matters )ithin its  ?urisdiction2 proceed to hear and determine the disputes in the absence of any party thereto )ho has been summoned or served )ith notice to appear2 conduct its proceedings or any part thereof in public or in private2 ad?ourn its hearings at any time and place2 refer technical matters or accounts to an e0pert and to accept his report as evidence after hearing of the parties upon due notice2 direct parties to be ?oined in or e0cluded from the proceedings2 correct2 amend2 or )aive any error2 defect or irregularity2 )hether in substance or in form2 give all such directions as it may deem necessary or e0pedient in the determination of the dispute before it2 and dismiss the mining dispute as part thereof2 )here it is trivial or )here further proceedings by the Board are not necessary or desirable: 1. To hold any person in contempt2 directly or indirectly2 and impose appropriate penalties thereforL and /. To en?oin any or all acts involving or arising from any case pending before it )hich2 if not restrained forth)ith2 may cause grave or irreparable damage to any of the parties to the case or seriously a3ect social and economic stability. !n any proceeding before the Board2 the rules of evidence prevailing in courts of la) or e=uity shall not be controlling and it is the spirit and intention of this Act that shall govern. The Board shall use every and all reasonable means to ascertain the facts in each case speedily and ob?ectively and )ithout regard to technicalities of la) or procedure2 all in the interest of due process. !n any proceeding before the Board2 the parties may be represented by legal counsel. The 5ndings of fact of the Board shall be conclusive and binding on the parties and its decision or order shall be 5nal and e0ecutory. A petition for revie) by certiorari and =uestion of la) may be 5led by the aggrieved party )ith the Supreme Court )ithin thirty 74@9 days from receipt of the order or decision of the Board. CHAPTR I!' ;#'R"+"T SHAR Section @ ;overnment Share in +ineral Production Sharing Agreement  The total government share in a mineral production sharing agreement shall be the e0cise ta0 on mineral products as provided in Republic Act "o. GG/,2 amending Section 1-17a9 of the "ational !nternal Revenue Code2 as amended. Section 1 ;overnment Share in #ther +ineral Agreements  The share of the ;overnment in co6production and ?oint6 venture agreements shall be negotiated by the ;overnment and the contractor ta(ing into consideration the: a. capital investment of the pro?ectL b. ris(s involvedL

foreign national and all such other ta0es2 duties and fees as provided for under e0isting la)s.  The collection of ;overnment share in 5nancial or technical assistance agreement shall commence after the 5nancial or technical assistance agreement contractor has fully recovered its pre6operating e0penses2 e0ploration2 and development e0penditures2 inclusive. Section / Allocation of ;overnment Share  The ;overnment share as referred to in the preceding sections shall be shared and allocated in accordance )ith Sections /,@ and /,/ of Republic Act "o. G1>@ other)ise (no)n as the Kocal ;overnment Code of 1,,1. !n case the development and utiliation of mineral resources is underta(en by a government6o)ned or 6controlled corporation2 the sharing and allocation shall be in accordance )ith Sections /,1 and /,/ of the said Code. CHAPTR I'  TAIS A"$ S Section 4 !ncome Ta0es After the lapse of the income ta0 holiday as provided for in the #mnibus !nvestments Code2 the contractor shall be liable to pay income ta0 as provided in the "ational !nternal Revenue Code2 as amended. Section < 0cise Ta0 on +ineral Products  The contractor shall be liable to pay the e0cise ta0 on mineral products as provided for under Section 1-1 of the "ational !nternal Revenue Code: Provided2 ho)ever2 That )ith respect to a mineral production sharing agreement2 the e0cise ta0 on mineral products shall be the government share under said agreement. Section +ine astes and Tailings ees A semi6annual fee to be (no)n as mine )astes and tailings fee is hereby imposed on all operating mining companies in accordance )ith the implementing rules and regulations. The mine )astes and tailings fee shall accrue to a reserve fund to be used e0clusively for payment for damages to: a. Kives and personal safetyL b. Kands2 agricultural crops and forest products2 marine life and a=uatic resources2 cultural resourcesL and c. !nfrastructure and the revegetation and rehabilitation of  silted farm lands and other areas devoted to agriculture and 5shing caused by mining pollution.  This is in addition to the suspension or closure of the activities of the contractor at any time and the penal sanctions imposed upon the same.  The Secretary is authoried to increase m ine )astes and tailings fees2 )hen public interest so re=uires2 upon the recommendation of the $irector. Section > #ccupation ees

c. contribution of the pro?ect to the economyL and d. other factors that )ill provide for a fair and e=uitable sharing bet)een the ;overnment and the contractor.  The ;overnment shall also be entitled to compensations for its other contributions )hich shall be agreed upon by the parties2 and shall consist2 among other things2 the contractorJs income ta02 e0cise ta02 special allo)ance2 )ithholding ta0 due from the contractorJs foreign stoc(holders arising from dividend or interest payments to the said foreign stoc(holders2 in case of a foreign national2 and all such other ta0es2 duties and fees as provided for under e0isting la)s.  The ;overnment share in 5nancial or technical assistance agreement shall consist of2 among other things2 the contractorJs corporate income ta02 e0cise ta02 special allo)ance2 )ithholding ta0 due from the contractorJs foreign stoc(holders arising from dividend or interest payments to the said foreign stoc(holder in case of a

 There shall be collected from any holder of a mineral agreement2 5nancial or technical assistance agreement or e0ploration permit on public or private lands2 an annual occupation fee in accordance )ith the follo)ing schedule: a. or e0ploration permit M ive pesos 7P-.@@9 per hectare or fraction thereof per annumL b. or mineral agreements and 5nancial or technical assistance agreements M ifty pesos 7P-@.@@9 per hectare or fraction thereof per annumL and c. or mineral reservation M #ne hundred pesos 7P1@@.@@9 per hectare or fraction thereof per annum.  The Secretary is authoried to increase the occupation fees provided herein )hen the public interest so re=uires2 upon recommendation of the Bureau $irector.

11 Section G +anner of Payment of ees  The fees shall be paid on the date the mining agreement is registered )ith the appropriate oFce and on the same date every year thereafter. !t shall be paid to the treasurer of the municipality or city )here the onshore mining areas are located2 or to the $irector in case of o3shore mining areas. or this purpose2 the appropriate oFcer shall submit to the treasurer of the municipality or city )here the onshore mining area is located2 a complete list of all onshore mining rights registered )ith his oFce2 indicating therein the names of the holders2 area in hectares2 location2 and date registered. !f the fee is not paid on the date speci5ed2 it shall be increased by t)enty65ve per centum 7/-9. Section  Allocation of #ccupation ees  Thirty per centum 74@9 of all occupational fees collected from holders of mining rights in onshore mining areas shall accrue to the province and seventy per centum 7G@9 to the municipality in )hich the onshore mining areas are located. !n a chartered city2 the full amount shall accrue to the city concerned. Section , iling ees and #ther Charges  The Secretary is authoried to charge reasonable 5ling fees and other charges as he may prescribe in accordance )ith the implementing rules and regulations. CHAPTR I'! !"C"T!'S Section ,@ !ncentives  The contractors in mineral agreements2 and 5nancial or technical assistance agreements shall be entitled to the applicable 5scal and non65scal incentives as provided for under 0ecutive #rder "o. //>2 other)ise (no)n as the #mnibus !nvestments Code of 1,G. Provided2 That holders of e0ploration permits may register )ith the Board of !nvestments and be entitled to the 5scal incentives granted under the said Code for the duration of the permits or e0tensions thereof: Provided2 further2 That mining activities shall al)ays be included in the investment priorities plan. Section ,1 !ncentives for Pollution Control $evices Pollution control devices ac=uired2 constructed or installed by contractors shall not be considered as improvements on the land or building )here they are placed2 and shall not be sub?ect to real property and other ta0es or assessments: Provided2 ho)ever2 That payment of mine )astes and tailings fees is not e0empted. Section ,/ !ncome Ta06Carry or)ard of Kosses A net operating loss )ithout the bene5t of incentives incurred in any of the 5rst ten 71@9 years of operations may be carried over as a deduction from ta0able income for the ne0t 5ve 7-9 years immediately follo)ing the year of such loss. The entire amount of the loss shall be carried over to the 5rst of the 5ve 7-9 ta0able years follo)ing the loss2 and any portion of such loss )hich e0ceeds the ta0able income of such 5rst year shall be deducted in li(e manner from the ta0able income of the ne0t remaining four 7 3ectivity Clause  This Act shall ta(e e3ect thirty 74@9 days follo)ing its complete publication in t)o 7/9 ne)spapers of general circulation in the Philippines. Approved: +arch 42 1,,-