Republic Act No. 7942

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CHANROBLESVIRTUALLAW
LIBRARY
PHILIPPINEENVIRONMENTLAWSREPUBLICACTNO.
7942ANACTINSTITUTINGANEWSYSTEMOFMINERAL
RESOURCESEXPLORATION,DEVELOPMENT,UTILIZATION,
ANDCONSERVATIONCHANROBLESVIRTUALLAW
LIBRARY

chanroblesvirtualawlibrary
Thiswebpagecontainsthefulltextof
RepublicActNo.7942

REPUBLICACTNO.7942
[ANACTINSTITUTINGANEWSYSTEMOFMINERALRESOURCES
EXPLORATION,DEVELOPMENT,UTILIZATION,ANDCONSERVATION]
Be it enacted by the Senate and House of Representatives of the

PhilippinesinCongressassembled:
chanroblesvirtuallawlibrary
CHAPTERI
INTRODUCTORYPROVISIONS
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Section1
Title
ThisActshallbeknownasthe"PhilippineMiningActof1995."
Section2
DeclarationofPolicy
LawLibrary
PhilippineLaws,Statutes&Codes
PhilippineSupremeCourtDecisions
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WorldWideLegalRecources
USFederalLaws,Statutes&Codes
USSupremeCourtDecisions
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Review
All mineral resources in public and private lands within the territory
and exclusive economic zone of the Republic of the Philippines are
owned by the State. It shall be the responsibility of the State to
promote their rational exploration, development, utilization and
conservation through the combined efforts of government and the
private sector in order to enhance national growth in a way that
effectively safeguards the environment and protect the rights of
affectedcommunities.
Section3
DefinitionofTerms
AsusedinandforpurposesofthisAct,thefollowingterms,whetherin
singularorplural,shallmean:
a. Ancestral lands refers to all lands exclusively and actually

possessed,occupied,orutilizedbyindigenousculturalcommunitiesby
themselves or through their ancestors in accordance with their
customs and traditions since time immemorial, and as may be defined
anddelineatedbylaw.
b.Blockormeridionalblockmeansanareaboundedbyonehalf(1/2)
minute of latitude and onehalf (1/2) minute of longitude, containing
approximatelyeightyonehectares(81has.).
c. Bureau means the Mines and Geosciences Bureau under the
DepartmentofEnvironmentandNaturalResources.
d. Carrying capacity refers to the capacity of natural and human
environments to accommodate and absorb change without
experiencingconditionsofinstabilityandattendantdegradation.
e. Contiguous zone refers to water, sea bottom and substratum
measuredtwentyfournauticalmiles(24n.m.)seawardfromthebase
lineofthePhilippinearchipelago.
f. Contract area means land or body of water delineated for purposes
of exploration, development, or utilization of the minerals found
therein.
g. Contractor means a qualified person acting alone or in consortium
who is a party to a mineral agreement or to a financial or technical
assistanceagreement.
h. Coproduction agreement (CA) means an agreement entered into
between the Government and one or more contractors in accordance
withSection26(b)hereof.
MCLE:
i. Department means the Department of Environment and Natural

Resources.
j.Developmentmeanstheworkundertakentoexploreandpreparean
orebodyoramineraldepositformining,includingtheconstructionof
necessaryinfrastructureandrelatedfacilities.
k.DirectormeanstheDirectoroftheMinesandGeosciencesBureau.
l. Ecological profile or ecoprofile refers to geographicbased

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instruments for planners and decisionmakers which presents an

evaluation of the environmental quality and carrying capacity of an
area.
m.Environmentalcompliancecertificate(ECC)referstothedocument
issuedbythegovernmentagencyconcernedcertifyingthattheproject
under consideration will not bring about an unacceptable
environmental impact and that the proponent has complied with the
requirementsoftheenvironmentalimpactstatementsystem.
DebtKollect
n.Environmentalimpactstatement(EIS)isthedocumentwhichaims
to identify, predict, interpret, and communicate information regarding
changes in environmental quality associated with a proposed project
andwhichexaminestherangeofalternativesfortheobjectivesofthe
proposalandtheirimpactontheenvironment.
o. Exclusive economic zone means the water, sea bottom and
subsurfacemeasuredfromthebaselineofthePhilippinearchipelagoup
totwohundrednauticalmiles(200n.m.)offshore.
p.Existingmining/quarryingrightmeansavalidandsubsistingmining
claim or permit or quarry permit or any mining lease contract or
agreementcoveringamineralizedareagranted/issuedunderpertinent
mininglaws.
Intellectual
Property
q. Exploration means the searching or prospecting for mineral

resources by geological, geochemical or geophysical surveys, remote
sensing,testpitting,trenching,drilling,shaftsinking,tunnelingorany
other means for the purpose of determining the existence, extent,
quantity and quality thereof and the feasibility of mining them for
profit.
r. Financial or technical assistance agreement means a contract
involving financial or technical assistance for largescale exploration,
development,andutilizationofmineralresources.
s.Forcemajeuremeansactsorcircumstancesbeyondthereasonable
control of contractor including, but not limited to, war, rebellion,
insurrection, riots, civil disturbance, blockade, sabotage, embargo,
strike, lockout, any dispute with surface owners and other labor
disputes,epidemic,earthquake,storm,floodorotheradverseweather
conditions, explosion, fire, adverse action by government or by any
instrumentality orsubdivision thereof,act ofGod oranypublicenemy
and any cause that herein describe over which the affected party has
noreasonablecontrol.
t. Foreignowned corporation means any corporation, partnership,
association, or cooperative duly registered in accordance with law in
which less than fifty per centum (50%) of the capital is owned by
Filipinocitizens.
u. Government means the government of the Republic of the
Philippines.
v.Grossoutputmeanstheactualmarketvalueofmineralsormineral
products from its mining area as defined in the National Internal
RevenueCode.
w. Indigenous cultural community means a group or tribe of
indigenous Filipinos who have continuously lived as communities on
communallybounded and defined land since time immemorial and
havesucceededinpreserving,maintaining,andsharingcommonbonds
of languages, customs, traditions, and other distinctive cultural traits,
andasmaybedefinedanddelineatedbylaw.

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x. Joint venture agreement (JVA) means an agreement entered into

between the Government and one or more contractors in accordance
withSection26(c)hereof.
y.Mineralprocessingmeansthemilling,beneficiationorupgradingof
ores or minerals and rocks or by similar means to convert the same
intomarketableproducts.
z. Mine wastes and tailings shall mean soil and rock materials from
surface or underground mining and milling operations with no
economicvaluetothegeneratorofthesame.
aa. Minerals refers to all naturally occurring inorganic substance in
solid,gas,liquid,oranyintermediatestateexcludingenergymaterials
such as coal, petroleum, natural gas, radioactive materials, and
geothermalenergy.
ab.Mineralagreementmeansacontractbetweenthegovernmentand
a contractor, involving mineral productionsharing agreement, co
productionagreement,orjointventureagreement.
ac.Minerallandmeansanyareawheremineralresourcesarefound.
ad.Mineralresourcemeansanyconcentrationofminerals/rockswith
potentialeconomicvalue.
ae.Miningareameansaportionofthecontractareaidentifiedbythe
contractor for purposes of development, mining, utilization, and sites
for support facilities or in the immediate vicinity of the mining
operations.
af. Mining operation means mining activities involving exploration,
feasibility,development,utilization,andprocessing.
ag. Nongovernmental organization (NGO) includes nonstock,
nonprofitorganizationsinvolvedinactivitiesdealingwithresourceand
environmentalconservation,managementandprotection.
ah.Netassetsreferstotheproperty,plantandequipmentasreflected
intheauditedfinancialstatementofthecontractornetofdepreciation,
as computed for tax purposes, excluding appraisal increase and
constructioninprogress.
ai. Offshore means the water, sea bottom and subsurface from the
shoreorcoastlinereckonedfromthemeanlowtideleveluptothetwo
hundred nautical miles (200 n.m.) exclusive economic zone including
thearchipelagicseaandcontiguouszone.
aj. Onshore means the landward side from the mean tide elevation,
includingsubmergedlandsinlakes,riversandcreeks.
ak.Oremeansanaturallyoccurringsubstanceormaterialfromwhich
amineralorelementcanbeminedand/orprocessedforprofit.
al.Permitteemeanstheholderofanexplorationpermit.
am. Pollution control and infrastructure devices refers to
infrastructure, machinery, equipment and/or improvements used for
impounding,treatingorneutralizing,precipitating,filtering,conveying
andcleansingmineindustrialwasteandtailingsaswellaseliminating
or reducing hazardous effects of solid particles, chemicals, liquids or
otherharmfulbyproductsandgasesemittedfromanyfacilityutilizedin
miningoperationsfortheirdisposal.
an.PresidentmeansthePresidentoftheRepublicofthePhilippines.

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ao. Private land refers to any land belonging to any private person
whichincludesalienableanddisposablelandbeingclaimedbyaholder,
claimant,oroccupantwhohasalreadyacquiredavestedrightthereto
under the law, although the corresponding certificate or evidence of
titleorpatenthasnotbeenactuallyissued.
ap. Public land refers to lands of the public domain which have been
classified as agricultural lands and subject to management and
dispositionorconcessionunderexistinglaws.
aq.QualifiedpersonmeansanycitizenofthePhilippineswithcapacity
to contract, or a corporation, partnership, association, or cooperative
organized or authorized for the purpose of engaging in miring, with
technical and financial capability to undertake mineral resources
development and duly registered in accordance with law at least sixty
per centum (60%) of the capital of which is owned by citizens of the
Philippines: Provided, That a legally organized foreignowned
corporationshallbedeemedaqualifiedpersonforpurposesofgranting
an exploration permit, financial or technical assistance agreement or
mineralprocessingpermit.
ar.Quarryingmeanstheprocessofextracting,removinganddisposing
quarry resources found on or underneath the surface of private or
publicland.
as.Quarrypermitmeansadocumentgrantedtoaqualifiedpersonfor
the extraction and utilization of quarry resources on public or private
lands.
at. Quarry resources refers to any common rock or other mineral
substances as the Director of Mines and Geosciences Bureau may
declare to be quarry resources such as, but not limited to, andesite,
basalt, conglomerate, coral sand, diatomaceous earth, diorite,
decorative stones, gabbro, granite, limestone, marble, marl, red
burning clays for potteries and bricks, rhyolite, rock phosphate,
sandstone,serpentine,shale,tuff,volcaniccinders,andvolcanicglass:
Provided,Thatsuchquarryresourcesdonotcontainmetalsormetallic
constituents and/or other valuable minerals in economically workable
quantities: Provided, further, That nonmetallic minerals such as
kaolin, feldspar, bull quartz, quartz or silica, sand and pebbles,
bentonite,talc,asbestos,barite,gypsum,bauxite,magnesite,dolomite,
mica, precious and semiprecious stones, and other nonmetallic
mineralsthatmaylaterbediscoveredandwhichthe:Directordeclares
the same to be of economically workable quantities, shall not be
classifiedunderthecategoryofquarryresources.
au. Regional director means the regional director of any mines
regional office under the Department of Environment and Natural
Resources.
av. Regional office means any of the mines regional offices of the
DepartmentofEnvironmentandNaturalResources.
aw.SecretarymeanstheSecretaryoftheDepartmentofEnvironment
andNaturalResources.
ax.Specialallowancereferstopaymenttotheclaimownersorsurface
rightownersparticularlyduringthetransitionperiodfromPresidential
DecreeNo.463andExecutiveOrderNo.279,seriesof1987.
ay.StatemeanstheRepublicofthePhilippines.
az.Utilizationmeanstheextractionordispositionofminerals.
CHAPTERII

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GOVERNMENTMANAGEMENT
Section4
OwnershipofMineralResources
Mineral resources are owned by the State and the exploration,
development, utilization, and processing thereof shall be under its full
control and supervision. The State may directly undertake such
activitiesoritmayenterintomineralagreementswithcontractors.
The State shall recognize and protect the rights of the indigenous
cultural communities to their ancestral lands as provided for by the
Constitution.
Section5
MineralReservations
Whenthenationalinterestsorequires,suchaswhenthereisaneedto
preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or ecological
value, the President may establish mineral reservations upon the
recommendation of the Director through the Secretary. Mining
operationsinexistingmineralreservationsandsuchotherreservations
as may thereafter be established, shall be undertaken by the
Department or through a contractor: Provided, That a small scale
mining cooperative covered by Republic Act No. 7076 shall be given
preferential right to apply for a smallscale mining agreement for a
maximumaggregateareaoftwentyfivepercent(25%)ofsuchmineral
reservation, subject to valid existing mining/quarrying rights as
provided under Section 112 Chapter XX hereof. All submerged lands
within the contiguous zone and in the exclusive economic zone of the
Philippinesareherebydeclaredtobemineralreservations.
A ten per centum (10%) share of all royalties and revenues to be
derivedbythegovernmentfromthedevelopmentandutilizationofthe
mineral resources within mineral reservations as provided under this
ActshallaccruetotheMinesandGeosciencesBureautobeallottedfor
special projects and other administrative expenses related to the
exploration and development of other mineral reservations mentioned
inSection6hereof.
Section6
OtherReservations
Mining operations in reserved lands other than mineral reservations
maybeundertakenbytheDepartment,subjecttolimitationsasherein
provided. In the event that the Department cannot undertake such
activities,theymaybeundertakenbyaqualifiedpersoninaccordance
withtherulesandregulationspromulgatedbytheSecretary.Theright
to develop and utilize the minerals found therein shall be awarded by
thePresidentundersuchtermsandconditionsasrecommendedbythe
Director and approved by the Secretary: Provided, That the party who
undertook the exploration of said reservation shall be given priority.
Theminerallandsoawardedshallbeautomaticallyexcludedfromthe
reservation during the term of the agreement: Provided, further, That
the right of the lessee of a valid mining contract existing within the
reservation at the time of its establishment shall not be prejudiced or
impaired.
Section7
PeriodicReviewofExistingMineralReservations
The Secretary shall periodically review existing mineral reservations
for the purpose of determining whether their continued existence is
consistent with the national interest, and upon his recommendation,
the President may, by proclamation, alter or modify the boundaries

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thereof or revert the same to the public domain without prejudice to

priorexistingrights.
Section8
AuthorityoftheDepartment
The Department shall be the primary government agency responsible
fortheconservation,management,development,andproperuseofthe
States mineral resources including those in reservations, watershed
areas, and lands of the public domain. The Secretary shall have the
authority to enter into mineral agreements on behalf of the
Government upon the recommendation of the Director, promulgate
such rules and regulations as may be necessary to implement the
intentandprovisionsofthisAct.
Section9
AuthorityoftheBureau
The Bureau shall have direct charge in the administration and
dispositionofminerallandsandmineralresourcesandshallundertake
geological, mining, metallurgical, chemical, and other researches as
well as geological and mineral exploration surveys. The Director shall
recommend to the Secretary the granting of mineral agreements to
duly qualified persons and shall monitor the compliance by the
contractorofthetermsandconditionsofthemineralagreements.The
Bureaumayconfiscatesurety,performanceandguarantybondsposted
throughanordertobepromulgatedbytheDirector.TheDirectormay
deputize, when necessary, any member or unit of the Philippine
National Police, barangay, duly registered nongovernmental
organization (NGO) or any qualified person to police all mining
activities.
Section10
RegionalOffices
There shall be as many regional offices in the country as may be
establishedbytheSecretary,upontherecommendationoftheDirector.
Section11
ProcessingofApplications
The system of processing applications for mining rights shall be
prescribedintherulesandregulationsofthisAct.
Section12
Survey,ChartingandDelineationofMiningAreas
A sketch plan or map of the contract or mining area prepared by a
deputized geodetic engineer suitable for publication purposes shall be
required during the filing of a mineral agreement or financial or
technicalassistanceagreementapplication.Thereafter,thecontractor
mining area shall be surveyed and monumented by a deputized
geodetic engineer or bureau geodetic engineer and the survey plan
shall be approved by the Director before the approval of the mining
feasibility.
Section13
MeridionalBlocks
For purposes of the delineation of the contract or mining areas under
this Act, the Philippine territory and its exclusive economic zone shall
be divided into meridional blocks of onehalf (1/2) minute of latitude
andonehalf(1/2)minuteoflongitude.
Section14

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RecordingSystem
There shall be established a national and regional filing and recording
system. A mineral resource database system shall be set up in the
Bureau which shall include, among others, a mineral rights
management system. The Bureau shall publish at least annually, a
mineral gazette of nationwide circulation containing among others, a
current list of mineral rights, their location in the map, mining rules
and regulations, other official acts affecting mining, and other
information relevant to mineral resources development. A system and
publicationfundshallbeincludedintheregularbudgetoftheBureau.
CHAPTERIII
SCOPEOFAPPLICATION
Section15
ScopeofApplication
This Act shall govern the exploration, development, utilization and
processingofallmineralresources.
Section16
OpeningofAncestralLandsforMiningOperations
No ancestral land shall be opened for miningoperations without prior
consentoftheindigenousculturalcommunityconcerned.
Section17
RoyaltyPayments
forIndigenousCulturalCommunities
In the event of an agreement with an indigenous cultural community
pursuant to the preceding section, the royalty payment, upon
utilizationofthemineralsshallbeagreeduponbytheparties.Thesaid
royaltyshallformpartofatrustfundforthesocioeconomicwellbeing
oftheindigenousculturalcommunity.
Section18
AreasOpentoMiningOperations
Subject to any existing rights or reservations and prior agreements of
all parties, all mineral resources in public or private lands, including
timber or forestlands as defined in existing laws, shall be open to
mineral agreements or financial or technical assistance agreement
applications. Any conflict that may arise under this provision shall be
heardandresolvedbythepanelofarbitrators.
Section19
AreasClosedtoMiningApplications
Mineral agreement or financial or technical assistance agreement
applicationsshallnotbeallowed:
a. In military and other government reservations, except upon prior

writtenclearancebythegovernmentagencyconcerned
b.Nearorunderpublicorprivatebuildings,cemeteries,archeological
andhistoricsites,bridges,highways,waterways,railroads,reservoirs,
damsorotherinfrastructureprojects,publicorprivateworksincluding
plantations or valuable crops, except upon written consent of the
governmentagencyorprivateentityconcerned
c.Inareascoveredbyvalidandexistingminingrights
d.Inareasexpressedlyprohibitedbylaw
e. In areas covered by smallscale miners as defined by law unless
with prior consent of the smallscale miners, in which case a royalty
payment upon the utilization of minerals shall be agreed upon by the

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parties, said royalty forming a trust fund for the socioeconomic

developmentofthecommunityconcernedand
f.Oldgrowthorvirginforests,proclaimedwatershedforestreserves,
wilderness areas, mangrove forests, mossy forests, national parks
provincial/municipal forests, parks, greenbelts, game refuge and bird
sanctuaries as defined by law and in areas expressly prohibited under
the National Integrated Protected Areas System (NIPAS) under
RepublicActNo.7586,DepartmentAdministrativeOrderNo.25,series
of1992andotherlaws.
CHAPTERIV
EXPLORATIONPERMIT
Section20
ExplorationPermit
An exploration permit grants the right to conduct exploration for all
minerals in specified areas. The Bureau shall have the authority to
grantanexplorationPermittoaqualifiedperson.
Section21
TermsandConditionsoftheExplorationPermit
Anexplorationpermitshallbeforaperiodoftwo(2)years,subjectto
annual review and relinquishment or renewal upon the
recommendationoftheDirector.
Section22
MaximumAreasforExplorationPermit
The maximum area that a qualified person may hold at any one time
shallbe:
a.Onshore,inanyoneprovince
1.forindividuals,twenty(20)blocks:and
b.forpartnerships,corporations,cooperatives,orassociations,two
hundred(200)blocks.
b.Onshore,intheentirePhilippines
1.forindividuals,forty(40)blocksand
2. for partnerships, corporations, cooperatives, or associations,
fourhundred(400)blocks.
c.Offshore,beyondfivehundredmeters(500m)fromthemeanlow
tidelevel:
1.forindividuals,onehundred(100)blocksand
2.forpartnerships,corporations,cooperatives,orassociations,one
thousand(1,000)blocks.
Section23
RightsandObligationsofthePermittee
An exploration permit shall grant to the permittee, his heirs or
successorsininterest,therighttoenter,occupyandexplorethearea:
Provided, That if private or other parties are affected, the permittee
shall first discuss with the said parties the extent, necessity, and
manner of his entry, occupation and exploration and in case of
disagreement, a panel of arbitrators shall resolve the conflict or
disagreement.
The permittee shall undertake an exploration work on the area as
specifiedbyitspermitbasedonanapprovedworkprogram.
Any expenditure in excess of the yearly budget of the approved work

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program may be carried forward and credited to the succeeding years

covering the duration of the permit. The Secretary, through the
Director, shall promulgate rules and regulations governing the terms
andconditionsofthepermit.
The permittee may apply for a mineral production sharing agreement,
joint venture agreement, coproduction agreement or financial or
technicalassistanceagreementoverthepermitarea,whichapplication
shallbegrantedifthepermitteemeetsthenecessaryqualificationsand
the terms and conditions of any such agreement: Provided, That the
explorationperiodcoveredbytheexplorationpermitshallbeincluded
aspartoftheexplorationperiodofthemineralagreementorfinancial
ortechnicalassistanceagreement.
Section24
DeclarationofMiningProjectFeasibility
A holder of an exploration permit who determines the commercial
viabilityofaprojectcoveringaminingareamay,withinthetermofthe
permit, file with the Bureau a declaration of mining project feasibility
accompaniedbyaworkprogramfordevelopment.Theapprovalofthe
mining project feasibility and compliance with other requirements
provided in this Act shall entitle the holder to an exclusive right to a
mineralproductionsharingagreementorothermineralagreementsor
financialortechnicalassistanceagreement.
Section25
TransferorAssignment
An exploration permit may be transferred or assigned to a qualified
person subject to the approval of the Secretary upon the
recommendationoftheDirector.
CHAPTERV
MINERALAGREEMENTS
Section26
ModesofMineralAgreement
Forpurposes ofminingoperations,a mineralagreementmay takethe
followingformsashereindefined:
a. Mineral production sharing agreement is an agreement where the

Government grants to the contractor the exclusive right to conduct
mining operations within a contract area and shares in the gross
output. The contractor shall provide the financing, technology,
management and personnel necessary for the implementation of this
agreement.
b.CoproductionagreementisanagreementbetweentheGovernment
andthecontractorwhereintheGovernmentshallprovideinputstothe
miningoperationsotherthanthemineralresource.
c. Joint venture agreement is an agreement where a jointventure
companyisorganizedbytheGovernmentandthecontractorwithboth
parties having equity shares. Aside from earnings in equity, the
Governmentshallbeentitledtoashareinthegrossoutput.
Amineralagreementshallgranttothecontractortheexclusiverightto
conductminingoperationsandtoextractallmineralresourcesfoundin
the contract area. In addition, the contractor may be allowed to
converthisagreementintoanyofthemodesofmineralagreementsor
financial or technical assistance agreement covering the remaining
period of the original agreement subject to the approval of the
Secretary.
Section27
Eligibility

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Aqualifiedpersonmayenterintoanyofthethree(3)modesofmineral
agreement with the government for the exploration, development and
utilization of mineral resources: Provided, That in case the applicant
has been in the mining industry for any length of time, he should
possessasatisfactoryenvironmentaltrackrecordasdeterminedbythe
Mines and Geosciences Bureau and in consultation with the
EnvironmentalManagementBureauoftheDepartment.
Section28
MaximumAreasforMineralAgreement
Themaximumareathataqualifiedpersonmayholdatanytimeunder
amineralagreementshallbe:
a.Onshore,inanyoneprovince
1.forindividuals,ten(10)blocksand
2.forpartnerships,cooperatives,associations,orcorporations,one
hundred(100)blocks.
b.Onshore,intheentirePhilippines
1.forindividuals,twenty(20)blocksand
2.forpartnerships,cooperatives,associations,orcorporations,two
hundred(200)blocks.
c.Offshore,intheentirePhilippines
1.forindividualsfifty(50)blocks
2.forpartnerships,cooperatives,associations,orcorporations,five
hundred(500)blocksand
3.fortheexclusiveeconomiczone,alargerareatobedetermined
bytheSecretary.
Themaximumareasmentionedabovethatacontractormayholdunder
a mineral agreement shall not include mining/quarry areas under
operating
agreements
between
the
contractor
and
a
claimowner/lessee/permittee/licenseeenteredintounderPresidential
DecreeNo.463.
Section29
FilingandApprovalofMineralAgreements
Allproposedmineralagreementsshallbefiledintheregionwherethe
areasofinterestarelocated,exceptinmineralreservationswhichshall
befiledwiththeBureau.
The filing of a proposal for a mineral agreement shall give the
proponent the prior right to areas covered by the same. The proposed
mineral agreement will be approved by the Secretary and copies
thereof shall be submitted to the President. Thereafter, the President
shall provide a list to Congress of every approved mineral agreement
withinthirty(30)daysfromitsapprovalbytheSecretary.
Section30
Assignment/Transfer
Anyassignmentortransferofrightsandobligationsunderanymineral
agreement except a financial or technical assistance agreement shall
be subject to the prior approval of the Secretary. Such assignment or
transfer shall be deemed automatically approved if not acted upon by
the Secretary within thirty (30) working days from official receipt
thereof,unlesspatentlyunconstitutionalorillegal.

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Section31
WithdrawalfromMineralAgreements
Thecontractormay,bygivingduenoticeatanytimeduringthetermof
theagreement,applyforthecancellationofthemineralagreementdue
to causes which, in the opinion of the contractor, make continued
mining operations no longer feasible or viable. The Secretary shall
considerthenoticeandissueitsdecisionwithinaperiodofthirty(30)
days:Provided,Thatthecontractorhasmetallitsfinancial,fiscaland
legalobligations.
Section32
Terms
Mineral agreements shall have a term not exceeding twentyfive (25)
years to start from the date of execution thereof, and renewable for
another term not exceeding twentyfive (25) years under the same
terms and conditions thereof, without prejudice to changes mutually
agreeduponbytheparties.Aftertherenewalperiod,theoperationof
the mine may be undertaken by the Government or through a
contractor.Thecontractfortheoperationofamineshallbeawardedto
thehighestbidderinapublicbiddingafterduepublicationofthenotice
thereof:Provided,Thatthecontractorshallhavetherighttoequalthe
highest bid upon reimbursement of all reasonable expenses of the
highestbidder.
CHAPTERVI
FINANCIALORTECHNICALASSISTANCEAGREEMENT
Section33
Eligibility
Any qualified person with technical and financial capability to
undertake largescale exploration, development, and utilization of
mineral resources in the Philippines may enter into a financial or
technical assistance agreement directly with the Government through
theDepartment.
Section34
MaximumContractArea
Themaximumcontractareathatmaybegrantedperqualifiedperson,
subjecttorelinquishmentshallbe:
a.1,000meridionalblocksonshore
b.4,000meridionalblocksoffshoreor
c. Combinations of a and b provided that it shall not exceed the
maximumlimitsforonshoreandoffshoreareas.
Section35
TermsandConditions
The following terms, conditions, and warranties shall be incorporated
inthefinancialortechnicalassistanceagreement,towit:
a.Afirmcommitmentintheformofaswornstatement,ofanamount
correspondingtotheexpenditureobligationthatwillbeinvestedinthe
contractarea:Provided,Thatsuchamountshallbesubjecttochanges
asmaybeprovidedforintherulesandregulationsofthisAct
b. A financial guarantee bond shall be posted in favor of the
Government in an amount equivalent to the expenditure obligation of
theapplicantforanyyear
c. Submission of proof of technical competence, such as, but not
limited to, its track record in mineral resource exploration,

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development, and utilization details of technology to be employed in

theproposedoperationanddetailsoftechnicalpersonneltoundertake
theoperation
d. Representations and warranties that the applicant has all the
qualifications and none of the disqualifications for entering into the
agreement
e. Representations and warranties that the contractor has or has
access to all the financing, managerial and technical expertise and, if
circumstances demand, the technology required to promptly and
effectively carry out the objectives of the agreement with the
understanding to timely deploy these resources under its supervision
pursuant to the periodic work programs and related budgets, when
proper,providinganexplorationperioduptotwo(2)years,extendible
foranothertwo(2)yearsbutsubjecttoannualreviewbytheSecretary
inaccordancewiththeimplementingrulesandregulationsofthisAct,
andfurther,subjecttotherelinquishmentobligations
f. Representations and warranties that, except for payments for
dispositions for its equity, foreign investments in local enterprises
which are qualified for repatriation, and local suppliers credits and
such other generally accepted and permissible financial schemes for
raisingfundsforvalidbusinesspurposes,thecontractorshallnotraise
any form of financing from domestic sources of funds, whether in
Philippineorforeigncurrency,forconductingitsminingoperationsfor
andinthecontractarea
g. The mining operations shall be conducted in accordance with the
provisionsofthisActanditsimplementingrulesandregulations
h.Workprogramsandminimumexpenditurescommitments
i.Preferentialuseoflocalgoodsandservicestothemaximumextent
practicable
j.Astipulationthatthecontractorsareobligatedtogivepreferenceto
Filipinosinalltypesofminingemploymentforwhichtheyarequalified
andthattechnologyshallbetransferredtothesame
k.Requiringtheproponenttoeffectivelyuseappropriateantipollution
technology and facilities to protect the environment and to restore or
rehabilitate mined out areas and other areas affected by mine tailings
andotherformsofpollutionordestruction
l. The contractors shall furnish the Government records of geologic,
accounting,andotherrelevantdataforitsminingoperations,andthat
book of accounts and records shall be open for inspection by the
government
m.Requiringtheproponenttodisposeofthemineralsandbyproducts
produced under a financial or technical assistance agreement at the
highestpriceandmoreadvantageoustermsandconditionsasprovided
forundertherulesandregulationsofthisAct
n. Provide for consultation and arbitration with respect to the
interpretation and implementation of the terms and conditions of the
agreementsand
o. Such other terms and conditions consistent with the Constitution
andwiththisActastheSecretarymaydeemtobeforthebestinterest
oftheStateandthewelfareoftheFilipinopeople.
Section36
Negotiations

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Afinancialortechnicalassistanceagreementshallbenegotiatedbythe
Department and executed and approved by the President. The
President shall notify Congress of all financial or technical assistance
agreements within thirty (30) days from execution and approval
thereof.
Section37
FilingandEvaluationofFinancialorTechnicalAssistanceAgreement
Proposals
All financial or technical assistance agreement proposals shall be filed
with the Bureau after payment of the required processing fees. If the
proposal is found to be sufficient and meritorious in form and
substance after evaluation, it shall be recorded with the appropriate
government agency to give the proponent the prior right to the area
coveredbysuchproposal:Provided,Thatexistingmineralagreements,
financial or technical assistance agreements and other mining rights
arenotimpairedorprejudicedthereby.TheSecretaryshallrecommend
itsapprovaltothePresident.
Section38
TermofFinancial
orTechnicalAssistanceAgreement
A financial or technical assistance agreement shall have a term not
exceeding twentyfive (25) years to start from the execution thereof,
renewablefornotmore than twentyfive (25) yearsunder suchterms
andconditionsasmaybeprovidedbylaw.
Section39
OptiontoConvertintoaMineralAgreement
The contractor has the option to convert the financial or technical
assistance agreement to a mineral agreement at any time during the
termoftheagreement,iftheeconomicviabilityofthecontractareais
found to be inadequate to justify largescale mining operations, after
propernoticetotheSecretaryasprovidedforundertheimplementing
rulesandregulations:Provided,Thatthemineralagreementshallonly
befortheremainingperiodoftheoriginalagreement.
In the case of a foreign contractor, it shall reduce its equity to forty
percent (40%) in the corporation, partnership, association, or
cooperative.Uponcompliancewiththisrequirementbythecontractor,
the Secretary shall approve the conversion and execute the mineral
productionsharingagreement.
Section40
Assignment/Transfer
A financial or technical assistance agreement may be assigned or
transferred, in whole or in part, to a qualified person subject to the
prior approval of the President: Provided, That the President shall
notify Congress of every financial or technical assistance agreement
assigned or converted in accordance with this provision within thirty
(30)daysfromthedateoftheapprovalthereof.
Section41
WithdrawalfromFinancial
orTechnicalAssistanceAgreement
The contractor shall manifest in writing to the Secretary his intention
towithdrawfromtheagreement,ifinhisjudgmenttheminingproject
is no longer economically feasible, even after he has exerted
reasonable diligence to remedy the cause or the situation. The
Secretary may accept the withdrawal: Provided, That the contractor

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hascompliedorsatisfiedallhisfinancial,fiscalorlegalobligations.
CHAPTERVII
SMALLSCALEMINING
Section42
SmallscaleMining
Smallscale mining shall continue to be governed by Republic Act No.
7076andotherpertinentlaws.
CHAPTERVIII
QUARRYRESOURCES
Section43
QuarryPermit
Anyqualifiedpersonmayapplytotheprovincial/cityminingregulatory
boardforaquarrypermitonprivatelyownedlandsand/orpubliclands
for building and construction materials such as marble, basalt,
andesite, conglomerate, tuff, adobe, granite, gabbro, serpentine, inset
filling materials, clay for ceramic tiles and building bricks, pumice,
perliteandothersimilarmaterialsthatareextractedbyquarryingfrom
the ground. The provincial governor shall grant the permit after the
applicant has complied with all the requirements as prescribed by the
rulesandregulations.
Themaximumareawhichaqualifiedpersonmayholdatanyonetime
shall be five hectares (5 has.): Provided, That in largescale quarry
operations involving cement raw materials, marble, granite, sand and
gravel and construction aggregates, a qualified person and the
governmentmayenterintoamineralagreementasdefinedherein.
Aquarrypermitshallhaveatermoffive(5)years,renewableforlike
periods but not to exceed a total term of twentyfive (25) years. No
quarry permit shall be issued or granted on any area covered by a
mineralagreementorfinancialortechnicalassistanceagreement.
Section44
QuarryFeeandTaxes
A permittee shall, during the term of his permit, pay a quarry fee as
provided for under the implementing rules and regulations. The
permitteeshallalsopaytheexcisetaxasprovidedbypertinentlaws.
Section45
CancellationofQuarryPermit
A quarry permit may be cancelled by the provincial governor for
violations of the provisions of this Act or its implementing rules and
regulations or the terms and conditions of said permit: Provided, That
beforethecancellationofsuchpermit,theholderthereofshallbegiven
the opportunity to be heard in an investigation conducted for the
purpose.
Section46
CommercialSandandGravelPermit
Any qualified person may be granted a permit by the provincial
governor to extract and remove sand and gravel or other loose or
unconsolidatedmaterialswhichareusedintheirnaturalstate,without
undergoingprocessingfromanareaofnotmorethanfivehectares(5
has.)andinsuchquantitiesasmaybespecifiedinthepermit.
Section47
IndustrialSandandGravelPermit
Any qualified person may be granted an industrial sand and gravel
permit by the Bureau for the extraction of sand and gravel and other

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loose or unconsolidated materials that necessitate the use of

mechanical processing covering an area of more than five hectares (5
has.) at any one time. The permit shall have a term of five (5) years,
renewable for a like period but not to exceed a total term of twenty
five(25)years.
Section48
ExclusiveSandandGravelPermit
Any qualified person may be granted an exclusive sand and gravel
permitbytheprovincialgovernortoquarryandutilizesandandgravel
or other loose or unconsolidated materials from public lands for his
ownuse,providedthattherewillbenocommercialdispositionthereof.
A mineral agreement or a financial technical assistance agreement
contractor shall, however, have the right to extract and remove sand
andgravelandotherlooseunconsolidatedmaterialswithoutneedofa
permit within the area covered by the mining agreement for the
exclusiveuseintheminingoperations:Provided,Thatmonthlyreports
of the quantity of materials extracted therefrom shall be submitted to
the mines regional office concerned: Provided, further, That said right
shallbecoterminouswiththeexpirationoftheagreement.
Holdersofexistingminingleasesshalllikewisehavethesamerightsas
thatofacontractor:Provided,Thatsaidrightshallbecoterminouswith
theexpirydatesofthelease.
Section49
GovernmentGratuitousPermit
Anygovernmententityorinstrumentalitymaybegrantedagratuitous
permitbytheprovincialgovernortoextractsandandgravel,quarryor
loose unconsolidated materials needed in the construction of building
and/or infrastructure for public use or other purposes over an area of
notmorethantwohectares(2has.)foraperiodcoterminouswithsaid
construction.
Section50
PrivateGratuitousPermit
Any owner of land may be granted a private gratuitous permit by the
provincialgovernor.
Section51
GuanoPermit
Any qualified person may be granted a guano permit by the provincial
governor to extract and utilize loose unconsolidated guano and other
organic fertilizer materials in any portion of a municipality where he
hasestablisheddomicile.Thepermitshallbeforspecificcavesand/or
for confined sites with locations verified by the Departments field
officerinaccordancewithexistingrulesandregulations.
Section52
GemstoneGatheringPermit
Any qualified person may be granted a nonexclusive gemstone
gathering permit by the provincial governor to gather loose stones
usefulasgemstonesinriversandotherlocations.
CHAPTERIX
TRANSPORT,SALEANDPROCESSINGOFMINERALS
Section53
OreTransportPermit
A permit specifying the origin and quantity of nonprocessed mineral

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oresormineralsshallberequiredfortheirtransport.Transportpermits
shallbeissuedbytheminesregionaldirectorwhohasjurisdictionover
theareawheretheoreswereextracted.Inthecaseofmineraloresor
minerals being transported from the smallscale mining areas to the
custom mills or processing plants, the Provincial Mining Regulatory
Board (PMRB) concerned shall formulate their own policies to govern
suchtransportoforesproducedbysmallscaleminers.Theabsenceof
a permit shall be considered as prima facie evidence of illegal mining
andshallbesufficientcausefortheGovernmenttoconfiscatetheores
or minerals being transported, the tools and equipment utilized, and
thevehiclecontainingthesame.Oresamplesnotexceedingtwometric
tons (2 m.t.) to be used exclusively for assay or pilot test purposes
shallbeexemptedfromsuchrequirement.
Section54
MineralTradingRegistration
No person shall engage in the trading of mineral products, either
locally or internationally, unless registered with the Department of
Trade and Industry and accredited by the Department, with a copy of
saidregistrationsubmittedtotheBureau.
Section55
MineralsProcessingPermit
No person shall engage in the processing of minerals without first
securing a minerals processing permit from the Secretary. Minerals
processingpermitshallbeforaperiodoffive(5)yearsrenewablefor
likeperiodsbutnottoexceedatotaltermoftwentyfive(25)years.In
the case of mineral ores or minerals produced by the smallscale
miners,theprocessingthereofaswellasthelicensingoftheircustom
mills, or processing plants shall continue to be governed by the
provisionsofRepublicActNo.7076.
Section56
EligibilityofForeignowned/controlledCorporation
A foreignowned/controlled corporation may be granted a mineral
processingpermit.
CHAPTERX
DEVELOPMENTOFMININGCOMMUNITIES,SCIENCEANDMINING
TECHNOLOGY
Section57
ExpenditureforCommunityDevelopment
andScienceandMiningTechnology
A contractor shall assist in the development of its mining community,
the promotion of the general welfare of its inhabitants, and the
developmentofscienceandminingtechnology.
Section58
CreditedActivities
Activities that may be credited as expenditures for development of
mining communities, and science and mining technology are the
following:
a.Anyactivityorexpenditureintendedtoenhancethedevelopmentof
the mining and neighboring communities of a mining operation other
than those required or provided for under existing laws, or collective
bargainingagreements,andthelikeand
b. Any activity or expenditure directed towards the development of
geosciences and mining technology such as, but not limited to,
institutional and manpower development, and basic and applied
researches. Appropriate supervision and control mechanisms shall be
prescribedintheimplementingrulesandregulationsofthisAct.

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Section59
TrainingandDevelopment
Acontractorshallmaintainaneffectiveprogramofmanpowertraining
and development throughout the term of the mineral agreement and
shall encourage and train Filipinos to participate in all aspects of the
mining operations, including the management thereof. For highly
technical and specialized mining operations, the contractor may,
subject to the necessary government clearances, employ qualified
foreigners.
Section60
UseofIndigenousGoods,ServicesandTechnologies
A contractor shall give preference to the use of local goods, services
and scientific and technical resources in the mining operations, where
the same are of equivalent quality, and are available on equivalent
termsastheirimportedcounterparts.
Section61
Donations/TurnOverofFacilities
Priortocessationofminingoperationsoccasionedbyabandonmentor
withdrawal of operations, on public lands by the contractor, the latter
shall have a period of one (1) year therefrom within which to remove
hisimprovementsotherwise,allthesocialinfrastructureandfacilities
shall be turned over or donated taxfree to the proper government
authorities, national or local, to ensure that said infrastructure and
facilities are continuously maintained and utilized by the host and
neighboringcommunities.
Section62
EmploymentofFilipinos
A contractor shall give preference to Filipino citizens in all types of
mining employment within the country insofar as such citizens are
qualifiedtoperformthecorrespondingworkwithreasonableefficiency
and without hazard to the safety of the operations. The contractor,
however, shall not be hindered from hiring employees of his own
selection, subject to the provisions of Commonwealth Act No. 613, as
amended, for technical and specialized work which, in his judgment
and with the approval of the Director, requires highlyspecialized
trainingorlongexperienceinexploration,developmentorutilizationof
mineral resources: Provided, That in no case shall each employment
exceed five (5) years or the payback period as represented in original
project study, whichever is longer: Provided, further, That each
foreigner employed as mine manager, vicepresident for operations or
in an equivalent managerial position in charge of mining, milling,
quarryingordrillingoperationshall:
a.Presentevidenceofhisqualificationandworkexperienceor
b.Shallpasstheappropriategovernmentlicensureexaminationor
c. In special cases, may be permitted to work by the Director for a
period not exceeding one (1) year: Provided, however, That if
reciprocalprivilegesareextendedtoFilipinonationalsinthecountryof
domicile,theDirectormaygrantwaiversorexemptions.
CHAPTERXI
SAFETYANDENVIRONMENTALPROTECTION
Section63
MinesSafetyandEnvironmentalProtection
All contractors and permittees shall strictly comply with all the mines
safety rules and regulations as may be promulgated by the Secretary
concerningthe safe andsanitaryupkeep of theminingoperationsand

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achieve wastefree and efficient mine development. Personnel of the

Departmentinvolvedintheimplementationofminessafety,healthand
environmental rules and regulations shall be covered under Republic
ActNo.7305.
Section64
MineLabor
No person under sixteen (16) years of age shall be employed in any
phaseofminingoperationsandnopersonundereighteen(18)yearsof
ageshallbeemployedundergroundinamine.
Section65
MineSupervision
All mining and quarrying operations that employ more than fifty (50)
workers shall have at least one (1) licensed mining engineer with at
least five (5) years of experience in mining operations, and one (1)
registeredforeman.
Section66
MineInspection
The regional director shall have exclusive jurisdiction over the safety
inspection of all installations, surface or underground, in mining
operations at reasonable hours of the day or night and as much as
possibleinamannerthatwillnotimpedeorobstructworkinprogress
ofacontractororpermittee.
Section67
PowertoIssueOrders
The mines regional director shall, in consultation with the
Environmental Management Bureau, forthwith or within such time as
specified in his order, require the contractor to remedy any practice
connected with mining or quarrying operations, which is not in
accordancewithsafetyandantipollutionlawsandregulations.Incase
ofimminentdangertolifeorproperty,theminesregionaldirectormay
summarilysuspendtheminingorquarryingoperationsuntilthedanger
is removed, or appropriate measures are taken by the contractor or
permittee.
Section68
ReportofAccidents
In case of any incident or accident, causing or creating the danger of
loss of life or serious physical injuries, the person in charge of
operations shall immediately report the same to the regional office
where the operations are situated. Failure to report the same without
justifiable reason shall be a cause for the imposition of administrative
sanctions prescribed in the rules and regulations implementing this
Act.
Section69
EnvironmentalProtection
Every contractor shall undertake an environmental protection and
enhancementprogramcoveringtheperiodofthemineralagreementor
permit.Suchenvironmentalprogramshallbeincorporatedinthework
program which the contractor or permittee shall submit as an
accompanyingdocumenttotheapplicationforamineralagreementor
permit. The work program shall include not only plans relative to
miningoperationsbutalsotorehabilitation,regeneration,revegetation
andreforestationofmineralizedareas,slopestabilizationofminedout
and tailings covered areas, aquaculture, watershed development and

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waterconservationandsocioeconomicdevelopment.
Section70
EnvironmentalImpactAssessment(EIA)
Except during the exploration period of a mineral agreement or
financial or technical assistance agreement or an exploration permit,
an environmental clearance certificate shall be required based on an
environmentalimpactassessmentandproceduresunderthePhilippine
Environmental Impact Assessment System including Sections 26 and
27 of the Local Government Code of 1991 which require national
government agencies to maintain ecological balance, and prior
consultation with the local government units, nongovernmental and
peoples organizations and other concerned sectors of the community:
Provided, That a completed ecological profile of the proposed mining
areashallalsoconstitutepartoftheenvironmentalimpactassessment.
Peoples organizations and nongovernmental organizations shall be
allowed and encouraged to participate in ensuring that
contractors/permittees shall observe all the requirements of
environmentalprotection.
Section71
Rehabilitation
Contractors and permittees shall technically and biologically
rehabilitate the excavated, minedout, tailings covered and disturbed
areas to the condition of environmental safety, as may be provided in
the implementing rules and regulations of this Act. A mine
rehabilitationfundshallbecreated,basedonthecontractorsapproved
workprogram,andshallbedepositedasatrustfundinagovernment
depositorybankandusedforphysicalandsocialrehabilitationofareas
and communities affected by mining activities and for research on the
social, technical and preventive aspects of rehabilitation. Failure to
fulfilltheaboveobligationshallmeanimmediatesuspensionorclosure
oftheminingactivitiesofthecontractor/permitteeconcerned.
CHAPTERXII
AUXILIARYMININGRIGHTS
Section72
TimberRights
Anyprovisionoflawtothecontrarynotwithstanding,acontractormay
begrantedarighttocuttreesortimberwithinhisminingareaasmay
be necessary for his mining operations subject to forestry laws, rules
andregulations:Provided,Thatifthelandcoveredbytheminingarea
isalreadycoveredbyexistingtimberconcessions,thevolumeoftimber
needed and the manner of cutting and removal thereof shall be
determinedbytheminesregionaldirector,uponconsultationwiththe
contractor, the timber concessionaire/permittee and the Forest
ManagementBureauoftheDepartment:Provided,further,Thatincase
ofdisagreementbetweenthecontractorandthetimberconcessionaire,
themattershallbesubmittedtotheSecretarywhosedecisionshallbe
final.Thecontractorshallperformreforestationworkwithinhismining
areainaccordancewithforestrylaws,rulesandregulations.
Section73
WaterRights
A contractor shall have water rights for mining operations upon
approval of application with the appropriate government agency in
accordance with existing water laws, rules and regulations
promulgated thereunder: Provided, That water rights already granted
or vested through long use, recognized and acknowledged by local
customs, laws, and decisions of courts shall not thereby be impaired:
Provided, further, That the Government reserves the right to regulate
water rights and the reasonable and equitable distribution of water

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supplysoastopreventthemonopolyoftheusethereof.
Section74
RighttoPossessExplosives
Acontractor/explorationpermitteeshallhavetherighttopossessand
useexplosiveswithinhiscontract/permitareaasmaybenecessaryfor
his mining operations upon approval of application with the
appropriategovernmentagencyinaccordancewithexistinglaws,rules
and regulations promulgated thereunder: Provided, That the
Government reserves the right to regulate and control the explosive
accessoriestoensuresafeminingoperations.
Section75
EasementRights
When mining areas are so situated that for purposes of more
convenient mining operations it is necessary to build, construct or
installontheminingareasorlandsowned,occupiedorleasedbyother
persons, such infrastructure as roads, railroads, mills, waste dump
sites, tailings ponds, warehouses, staging or storage areas and port
facilities,tramways,runways,airports,electrictransmission,telephone
or telegraph lines, dams and their normal flood and catchment areas,
sitesforwaterwells,ditches,canals,newriverbeds,pipelines,flumes,
cuts, shafts, tunnels, or mills, the contractor, upon payment of just
compensation, shall be entitled to enter and occupy said mining areas
orlands.
Section76
EntryintoPrivateLandsandConcessionAreas
Subject to prior notification, holders of mining rights shall not be
prevented from entry into private lands and concession areas by
surfaceowners,occupants,orconcessionaireswhenconductingmining
operationstherein:Provided,Thatanydamagedonetothepropertyof
the surface owner, occupant, or concessionaire as a consequence of
suchoperationsshallbeproperlycompensatedasmaybeprovidedfor
in the implementing rules and regulations: Provided, further, That to
guaranteesuchcompensation,thepersonauthorizedtoconductmining
operation shall, prior thereto, post a bond with the regional director
basedonthetypeofproperties,theprevailingpricesinandaroundthe
area where the mining operations are to be conducted, with surety or
suretiessatisfactorytotheregionaldirector.
CHAPTERXIII
SETTLEMENTOFCONFLICTS
Section77
PanelofArbitrators
There shall be a panel of arbitrators in the regional office of the
Departmentcomposedofthree(3)members,two(2)ofwhommustbe
members of the Philippine Bar in good standing and one a licensed
mining engineer or a professional in a related field, and duly
designated by the Secretary as recommended by the Mines and
Geosciences Bureau Director. Those designated as members of the
panel shall serve as such in addition to their work in the Department
withoutreceivinganyadditionalcompensationAsmuchaspracticable,
saidmembersshallcomefromthedifferentbureausoftheDepartment
in the region. The presiding officer thereof shall be selected by the
drawing of lots. His tenure as presiding officer 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
withdrawn or revoked by the Secretary. Within thirty (30) working
days, after the submission of the case by the parties for decision, the
panel shall have exclusive and original jurisdiction to hear and decide
onthefollowing:

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a.Disputesinvolvingrightstominingareas
b.Disputesinvolvingmineralagreementsorpermits
c.
Disputes
involving
surface
claimholders/concessionairesand
owners,
occupants
and
d.DisputespendingbeforetheBureauandtheDepartmentatthedate
oftheeffectivityofthisAct.
Section78
AppellateJurisdiction
The decision or order of the panel of arbitrators may be appealed by
the party not satisfied thereto to the Mines Adjudication Board within
fifteen (15) days from receipt thereof which must decide the case
withinthirty(30)daysfromsubmissionthereoffordecision.
Section79
MinesAdjudicationBoard
TheMinesAdjudicationBoardshallbecomposedofthree(3)members.
TheSecretaryshallbethechairmanwiththeDirectoroftheMinesand
Geosciences Bureau and the Undersecretary for Operations of the
Department as members thereof. The Board shall have the following
powersandfunctions:
a. To promulgate rules and regulations governing the hearing and

dispositionofcasesbeforeit,aswellasthosepertainingtoitsinternal
functions,andsuchrulesandregulationsasmaybenecessarytocarry
outitsfunctions
b. To administer oaths, summon the parties to a controversy, issue
subpoenasrequiringtheattendanceandtestimonyofwitnessesorthe
production of such books, papers, contracts, records, statement of
accounts, agreements, and other documents as may be material to a
just determination of the matter under investigation, and to testify in
anyinvestigationorhearingconductedinpursuanceofthisAct
c.Toconducthearingsonallmatterswithinitsjurisdiction,proceedto
hear and determine the disputes in the absence of any party thereto
who has been summoned or served with notice to appear, conduct its
proceedings or any part thereof in public or in private, adjourn its
hearings at any time and place, refer technical matters or accounts to
an expert and to accept his report as evidence after hearing of the
partiesuponduenotice,directpartiestobejoinedinorexcludedfrom
the proceedings, correct, amend, or waive any error, defect or
irregularity,whetherinsubstanceorinform,giveallsuchdirectionsas
itmaydeemnecessaryorexpedientinthedeterminationofthedispute
before it, and dismiss the mining dispute as part thereof, where it is
trivialorwherefurtherproceedingsbytheBoardarenotnecessaryor
desirable:
1. To hold any person in contempt, directly or indirectly, and

imposeappropriatepenaltiesthereforand
2. To enjoin any or all acts involving or arising from any case
pending before it which, if not restrained forthwith, may cause
grave or irreparable damage to any of the parties to the case or
seriouslyaffectsocialandeconomicstability.
InanyproceedingbeforetheBoard,therulesofevidenceprevailingin
courts of law or equity shall not be controlling and it is the spirit and
intentionofthisActthatshallgovern.TheBoardshalluseeveryandall
reasonable means to ascertain the facts in each case speedily and
objectivelyandwithoutregardtotechnicalitiesoflaworprocedure,all
intheinterestofdueprocess.InanyproceedingbeforetheBoard,the
partiesmayberepresentedbylegalcounsel.Thefindingsoffactofthe

3+,/,33,1((19,5210(17/$:65(38%/,&$&712$1$&7,167,787,1*$1(:6<67(02)0,1(5$/5(6285&(6(;3
Boardshallbeconclusiveandbindingonthepartiesanditsdecisionor
ordershallbefinalandexecutory.
Apetitionfor reviewbycertiorari and question of law may be filed by
the aggrieved party with the Supreme Court within thirty (30) days
fromreceiptoftheorderordecisionoftheBoard.
CHAPTERXIV
GOVERNMENTSHARE
Section80
GovernmentShare
inMineralProductionSharingAgreement
Thetotalgovernmentshareinamineralproductionsharingagreement
shallbetheexcisetaxonmineralproductsasprovidedinRepublicAct
No. 7729, amending Section 151(a) of the National Internal Revenue
Code,asamended.
Section81
GovernmentShareinOtherMineralAgreements
The share of the Government in coproduction and jointventure
agreementsshallbenegotiatedbytheGovernmentandthecontractor
takingintoconsiderationthe:
a.capitalinvestmentoftheproject
b.risksinvolved
c.contributionoftheprojecttotheeconomyand
d. other factors that will provide for a fair and equitable sharing
betweentheGovernmentandthecontractor.
The Government shall also be entitled to compensations for its other
contributions which shall be agreed upon by the parties, and shall
consist, among other things, the contractors income tax, excise tax,
special allowance, withholding tax due from the contractors foreign
stockholders arising from dividend or interest payments to the said
foreign stockholders, in case of a foreign national, and all such other
taxes,dutiesandfeesasprovidedforunderexistinglaws.
The Government share in financial or technical assistance agreement
shallconsistof,amongotherthings,thecontractorscorporateincome
tax, excise tax, special allowance, withholding tax due from the
contractors foreign stockholders arising from dividend or interest
payments to the said foreign stockholder in case of a foreign national
andallsuchothertaxes,dutiesandfeesasprovidedforunderexisting
laws.
ThecollectionofGovernmentshareinfinancialortechnicalassistance
agreement shall commence after the financial or technical assistance
agreement contractor has fully recovered its preoperating expenses,
exploration,anddevelopmentexpenditures,inclusive.
Section82
AllocationofGovernmentShare
TheGovernmentshareasreferredtointheprecedingsectionsshallbe
shared and allocated in accordance with Sections 290 and 292 of
RepublicActNo.7160otherwiseknownastheLocalGovernmentCode
of 1991. In case the development and utilization of mineral resources
is undertaken by a governmentowned or controlled corporation, the
sharing and allocation shall be in accordance with Sections 291 and
292ofthesaidCode.
CHAPTERXV
TAXESANDFEES
Section83

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IncomeTaxes
After the lapse of the income tax holiday as provided for in the
Omnibus Investments Code, the contractor shall be liable to pay
income tax as provided in the National Internal Revenue Code, as
amended.
Section84
ExciseTaxonMineralProducts
Thecontractorshallbeliabletopaytheexcisetaxonmineralproducts
as provided for under Section 151 of the National Internal Revenue
Code: Provided, however, That with respect to a mineral production
sharing agreement, the excise tax on mineral products shall be the
governmentshareundersaidagreement.
Section85
MineWastesandTailingsFees
A semiannual fee to be known as mine wastes and tailings fee is
herebyimposedonalloperatingminingcompaniesinaccordancewith
the implementing rules and regulations. The mine wastes and tailings
fee shall accrue to a reserve fund to be used exclusively for payment
fordamagesto:
a.Livesandpersonalsafety
b. Lands, agricultural crops and forest products, marine life and
aquaticresources,culturalresourcesand
c.Infrastructureandtherevegetationandrehabilitationofsiltedfarm
lands and other areas devoted to agriculture and fishing caused by
miningpollution.
This is in addition to the suspension or closure of the activities of the
contractoratanytimeandthepenalsanctionsimposeduponthesame.
The Secretary is authorized to increase mine wastes and tailings fees,
when public interest so requires, upon the recommendation of the
Director.
Section86
OccupationFees
There shall be collected from any holder of a mineral agreement,
financial or technical assistance agreement or exploration permit on
publicorprivatelands,anannualoccupationfeeinaccordancewiththe
followingschedule:
a.ForexplorationpermitFivepesos(P5.00)perhectareorfraction
thereofperannum
b. For mineral agreements and financial or technical assistance
agreementsFiftypesos(P50.00)perhectareorfractionthereofper
annumand
c.FormineralreservationOnehundredpesos(P100.00)perhectare
orfractionthereofperannum.
The Secretary is authorized to increase the occupation fees provided
herein when the public interest so requires, upon recommendation of
theBureauDirector.
Section87
MannerofPaymentofFees
The fees shall be paid on the date the mining agreement is registered
withtheappropriateofficeandonthesamedateeveryyearthereafter.
It shall be paid to the treasurer of the municipality or city where the

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onshoreminingareasarelocated,ortotheDirectorincaseofoffshore
mining areas. For this purpose, the appropriate officer shall submit to
thetreasurerofthemunicipalityorcitywheretheonshoreminingarea
is located, a complete list of all onshore mining rights registered with
hisoffice,indicatingthereinthenamesoftheholders,areainhectares,
location, and date registered. If the fee is not paid on the date
specified,itshallbeincreasedbytwentyfivepercentum(25%).
Section88
AllocationofOccupationFees
Thirtypercentum(30%)ofalloccupationalfeescollectedfromholders
of mining rights in onshore mining areas shall accrue to the province
and seventy per centum (70%) to the municipality in which the
onshore mining areas are located. In a chartered city, the full amount
shallaccruetothecityconcerned.
Section89
FilingFeesandOtherCharges
The Secretary is authorized to charge reasonable filing fees and other
chargesashemayprescribeinaccordancewiththeimplementingrules
andregulations.
CHAPTERXVI
INCENTIVES
Section90
Incentives
The contractors in mineral agreements, and financial or technical
assistance agreements shall be entitled to the applicable fiscal and
nonfiscal incentives as provided for under Executive Order No. 226,
otherwiseknownastheOmnibusInvestmentsCodeof1987.Provided,
That holders of exploration permits may register with the Board of
Investmentsandbe entitledto thefiscal incentivesgrantedunderthe
said Code for the duration of the permits or extensions thereof:
Provided,further,Thatminingactivitiesshallalwaysbeincludedinthe
investmentprioritiesplan.
Section91
IncentivesforPollutionControlDevices
Pollution control devices acquired, constructed or installed by
contractors shall not be considered as improvements on the land or
building where they are placed, and shall not be subject to real
property and other taxes or assessments: Provided, however, That
paymentofminewastesandtailingsfeesisnotexempted.
Section92
IncomeTaxCarryForwardofLosses
Anetoperatinglosswithoutthebenefitofincentivesincurredinanyof
the first ten (10) years of operations may be carried over as a
deductionfromtaxableincomeforthenextfive(5)yearsimmediately
following the year of such loss. The entire amount of the loss shall be
carriedovertothefirstofthefive(5)taxableyearsfollowingtheloss,
andanyportionofsuchlosswhichexceedsthetaxableincomeofsuch
firstyearshallbedeductedinlikemannerfromthetaxableincomeof
thenextremainingfour(4)years.
Section93
IncomeTaxAcceleratedDepreciation
Fixedassetsmaybedepreciatedasfollows:
a. To the extent of not more than twice as fast as the normal rate of
depreciation or depreciated at normal rate of depreciation if the

3+,/,33,1((19,5210(17/$:65(38%/,&$&712$1$&7,167,787,1*$1(:6<67(02)0,1(5$/5(6285&(6(;3
expectedlifeisten(10)yearsorlessor
b. Depreciated over any number of years between five (5) years and
the expected life if the latter is more than ten (10) years, and the
depreciation thereon allowed as deduction from taxable income:
Provided, That the contractor notifies the Bureau of Internal Revenue
at the beginning of the depreciation period which depreciation rate
allowedbythissectionwillbeused.
Incomputingfortaxableincome,unlessotherwiseprovidedinthisAct,
thecontractormay,athisoption,deductexplorationanddevelopment
expenditures accumulated at cost as of the date of the prospecting or
explorationanddevelopmentexpenditurespaidorincurredduringthe
taxable year: Provided, That the total amount deductible for
explorationanddevelopmentexpendituresshallnotexceedtwentyfive
per centum (25%) of the net income from mining operations. The
actual exploration and development expenditures minus the twenty
five per centum (25%) net income from mining shall be carried
forwardtothesucceedingyearsuntilfullydeducted.
Net income from mining operation is defined as gross income from
operationslessallowabledeductionswhicharenecessaryorrelatedto
mining operations. Allowable deductions shall include mining, milling
andmarketingexpenses,depreciationofpropertiesdirectlyusedinthe
mining operations. This paragraph shall not apply to expenditures for
the acquisition or improvement of property of a character which is
subjecttotheallowancesfordepreciation.
Section94
InvestmentGuarantees
The contractor shall be entitled to the basic rights and guarantees
provided in the Constitution and such other rights recognized by the
governmentasenumeratedhereunder:
a. Repatriation of investments. The right to repatriate the entire

proceedsoftheliquidationoftheforeigninvestmentinthecurrencyin
which the investment was originally made and at the exchange rate
prevailingatthetimeofrepatriation.
b. Remittance of earnings. The right to remit earnings from the
investment in the currency in which the foreign investment was
originally made and at the exchange rate prevailing at the time of
remittance.
c.Foreignloansandcontracts.Therighttoremitattheexchangerate
prevailingatthetimeofremittancesuchsumsasmaybenecessaryto
meet the payments of interest and principal on foreign loans and
foreign obligations arising from financial or technical assistance
contracts.
d.Freedomfromexpropriation.Therighttobefreefromexpropriation
by the Government of the property represented by investments or
loans, or of the property of the enterprise except for public use or in
the interest of national welfare or defense and upon payment of just
compensation. In such cases, foreign investors or enterprises shall
have the right to remit sums received as compensation for the
expropriated property in the currency in which the investment was
originally made and at the exchange rate prevailing at the time of
remittance.
e. Requisition of investment. The right to be free from requisition of
the property represented by the investment or of the property of the
enterprises except in case of war or national emergency and only for
the duration thereof. Just compensation shall be determined and paid
eitheratthetimeorimmediatelyaftercessationofthestateofwaror
national emergency. Payments received as compensation for the

3+,/,33,1((19,5210(17/$:65(38%/,&$&712$1$&7,167,787,1*$1(:6<67(02)0,1(5$/5(6285&(6(;3
requisitioned property may be remitted in the currency in which the

investments were originally made and at the exchange rate prevailing
atthetimeofremittance.
f. Confidentiality. Any confidential information supplied by the
contractor pursuant to this Act and its implementing rules and
regulations shall be treated as such by the Department and the
Government,andduringthetermoftheprojecttowhichitrelates.
CHAPTERXVII
GROUNDFORCANCELLATION,REVOCATION,ANDTERMINATION
Section95
LateorNonfilingofRequirements
Failure of the permittee or contractor to comply with any of the
requirements provided in this Act or in its implementing rules and
regulations, without a valid reason, shall be sufficient ground for the
suspensionofanypermitoragreementprovidedunderthisAct.
Section96
ViolationoftheTermsandConditions
ofPermitsorAgreements
Violation of the terms and conditions of the permits or agreements
shallbeasufficientgroundforcancellationofthesame.
Section97
NonPaymentofTaxesandFees
Failure to pay the taxes and fees due the Government for two (2)
consecutive years shall cause the cancellation of the exploration
permit,mineralagreement,financialortechnicalassistanceagreement
andotheragreementsandthereopeningoftheareasubjectthereofto
newapplicants.
Section98
SuspensionorCancellation
ofTarIncentivesandCredits
Failuretoabidebythetermsandconditionsoftaxincentiveandcredits
shall cause the suspension or cancellation of said incentives and
credits.
Section99
FalsehoodorOmissionofFactsintheStatement
All statements made in the exploration permit, mining agreement and
financial or technical assistance agreement shall be considered as
conditions and essential parts thereof and any falsehood in said
statements or omission of facts therein which may alter, change or
affectsubstantiallythefactssetforthinsaidstatementsmaycausethe
revocation and termination of the exploration permit, mining
agreementandfinancialortechnicalassistanceagreement.
CHAPTERXVIII
ORGANIZATIONALANDINSTITUTIONALARRANGEMENTS
Section100
FromStaffBureautoLineBureau
The Mines and Geosciences Bureau is hereby transformed into a line

bureau consistent with Section 9 of this Act: Provided, That under the
Mines and Geosciences Bureau shall be the necessary mines regional,
districtandotherpertinentofficesthenumberandspecificfunctions
ofwhichshallbeprovidedintheimplementingrulesandregulationsof
thisAct.
CHAPTERXIX
PENALPROVISIONS

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Section101
FalseStatements
Anypersonwhoknowinglypresentsanyfalseapplication,declaration,
or evidence to the Government or publishes or causes to be published
any prospectus or other information containing any false statement
relating to mines, mining operations or mineral agreements, financial
ortechnicalassistanceagreementsandpermitsshall,uponconviction,
be penalized by a fine of not exceeding Ten thousand pesos
(P10,000.00).
Section102
IllegalExploration
Any person undertaking exploration work without the necessary
explorationpermitshall,uponconviction,bepenalizedbyafineofnot
exceedingFiftythousandpesos(P50,000.00).
Section103
TheftofMinerals
Any person extracting minerals and disposing the same without a
miningagreement,lease,permit,license,orstealsmineralsororesor
the products thereof from mines or mills or processing plants shall,
uponconviction,beimprisonedfromsix(6)monthstosix(6)yearsor
paya finefrom Tenthousand pesos (P10,000.00) toTwenty thousand
pesos(P20,000.00)orboth,atthediscretionoftheappropriatecourt.
Inaddition,heshallbeliabletopaydamagesandcompensationforthe
minerals removed, extracted, and disposed of. In the case of
associations, partnerships, or corporations, the president and each of
the directors thereof shall be responsible for the acts committed by
suchassociation,corporation,orpartnership.
Section104
DestructionofMiningStructures
Any person who willfully destroys or damages structures in or on the
mining area or on the mill sites shall, upon conviction, be imprisoned
for a period not to exceed five (5) years and shall, in addition, pay
compensationforthedamageswhichmayhavebeencausedthereby.
Section105
MinesArson
Any person who willfully sets fire to any mineral stockpile, mine or
workings, fittings or a mine, shall be guilty of arson and shall be
punished,uponconviction,bytheappropriatecourtinaccordancewith
the provisions of the Revised Penal Code and shall, in addition, pay
compensationforthedamagescausedhereby.
Section106
WillfulDamagetoaMine
Any person who willfully damages a mine, unlawfully causes water to
runintoamine,orobstructsanyshaftorpassagetoamine,orrenders
useless,damagesordestroysanymachine,appliance,apparatus,rope,
chain, tackle, or any other things used in a mine, shall be punished,
upon conviction, by the appropriate court, by imprisonment not
exceeding a period of five (5) years and shall, in addition, pay
compensationforthedamagescausedthereby.
Section107
IllegalObstructiontoPermitteesorContractors
Any person who, without justifiable cause, prevents or obstructs the

3+,/,33,1((19,5210(17/$:65(38%/,&$&712$1$&7,167,787,1*$1(:6<67(02)0,1(5$/5(6285&(6(;3
holderof anypermit, agreementor lease fromundertakinghismining

operationsshallbepunished,uponconvictionbytheappropriatecourt,
by a fine not exceeding Five thousand pesos (P5,000.00) or
imprisonmentnotexceedingone(1)year,orboth,atthediscretionof
thecourt.
Section108
ViolationoftheTermsandConditionsoftheEnvironmentalCompliance
Certificate
Any person who willfully violates or grossly neglects to abide by the
terms and conditions of the environmental compliance certificate
issuedtosaidpersonandwhichcausesenvironmentaldamagethrough
pollutionshallsufferthepenaltyofimprisonmentofsix(6)monthsto
six (6) years or a fine of Fifty thousand pesos (P50,000.00) to Two
hundred thousand pesos (P200,000.00), or both, at the discretion of
thecourt.
Section109
IllegalObstructiontoGovernmentOfficials
Any person who illegally prevents or obstructs the Secretary, the

Director or any of their representatives in the performance of their
duties under the provisions of this Act and of the regulations
promulgated hereunder shall be punished upon conviction, by the
appropriate court, by a fine not exceeding Five thousand pesos
(P5,000.00)orbyimprisonmentnotexceedingone(1)year,orboth,at
thediscretionofthecourt.
Section110
OtherViolations
Any other violation of this Act and its implementing rules and
regulations shall constitute an offense punishable with a fine not
exceedingFivethousandpesos(P5,000.00).
Section111
Fines
The Secretary is authorized to charge fines for late or nonsubmission
ofreportsinaccordancewiththeimplementingrulesandregulationsof
thisAct.
CHAPTERXX
TRANSITORYANDMISCELLANEOUSPROVISIONS
Section112
NonImpairment
ofExistingMining/QuarryingRights
All valid and existing mining lease contracts, permits/licenses, leases
pending renewal, mineral productionsharing agreements granted
under Executive Order No. 279, at the date of effectivity of this Act,
shallremainvalid,shallnotbeimpaired,andshallberecognizedbythe
Government: Provided, That the provisions of Chapter XIV on
government share in mineral productionsharing agreement and of
Chapter XVI on incentives of this Act shall immediately govern and
apply to a mining lessee or contractor unless the mining lessee or
contractor indicates his intention to the secretary, in writing, not to
avail of said provisions: Provided, further, That no renewal of mining
leasecontractsshallbemadeaftertheexpirationofitsterm:Provided,
finally, That such leases, productionsharing agreements, financial or
technical assistance agreements shall comply with the applicable
provisionsofthisActanditsimplementingrulesandregulations.
Section113
RecognitionofValidandExistingMiningClaimsandLease/Quarry

3+,/,33,1((19,5210(17/$:65(38%/,&$&712$1$&7,167,787,1*$1(:6<67(02)0,1(5$/5(6285&(6(;3
Applications
Holders of valid and existing mining claims, lease/quarry applications
shall be given preferential rights to enter into any mode of mineral
agreement with the government within two (2) years from the
promulgationoftherulesandregulationsimplementingthisAct.
Section114
SeparabilityClause
If any of the provision of this Act is held or declared to be
unconstitutional or invalid by a competent court, the other provisions
hereof shall continue to be in force as if the provision so annulled or
voidedhadneverbeenincorporatedinthisAct.
Section115
RepealingandAmendingClause
All laws, executive orders, presidential decrees, rules and regulations
or parts thereof which are inconsistent with any of the provisions of
thisActareherebyrepealedoramendedaccordingly.
Section116
EffectivityClause
This Act shall take effect thirty (30) days following its complete
publication in two (2) newspapers of general circulation in the
Philippines.
Approved:March3,1995
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Republic Act No. 7942

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

Be it enacted by the Senate and House of Representatives of the

a. Ancestral lands refers to all lands exclusively and actually

i. Department means the Department of Environment and Natural

instruments for planners and decisionmakers which presents an

q. Exploration means the searching or prospecting for mineral

x. Joint venture agreement (JVA) means an agreement entered into

thereof or revert the same to the public domain without prejudice to

a. In military and other government reservations, except upon prior

parties, said royalty forming a trust fund for the socioeconomic

program may be carried forward and credited to the succeeding years

a. Mineral production sharing agreement is an agreement where the

development, and utilization details of technology to be employed in

loose or unconsolidated materials that necessitate the use of

achieve wastefree and efficient mine development. Personnel of the

a. To promulgate rules and regulations governing the hearing and

1. To hold any person in contempt, directly or indirectly, and

a. Repatriation of investments. The right to repatriate the entire

requisitioned property may be remitted in the currency in which the

The Mines and Geosciences Bureau is hereby transformed into a line

holderof anypermit, agreementor lease fromundertakinghismining

Any person who illegally prevents or obstructs the Secretary, the

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