SALIENT FEATURES OF

REPUBLIC ACT NO. 7942, KNOWN

AS
“THE PHILIPPINE MINING ACT OF
1995”
AND ITS REVISED IMPLEMENTING
RULES AND REGULATIONS
 MINING AND SUSTAINABLE
DEVELOPMENT
The current Philippine policy framework for
mining is anchored on Republic Act No.
7942 or the Philippine Mining Act of 1995
and Presidential Decree No. 1586 or the
Philippine Environmental Impact Statement
(EIS) System.
PD No. 1586 or the Philippine Environmental
Impact Statement (EIS) System. Ensures that
environmental concerns are adequately
addressed in all stages of project
implementation. The EIS identifies potential
environmental impacts from development
activities like mining and provides for mitigative
or ameliorative mechanisms to minimize or
eliminate such impacts. It also sets out the
process in obtaining social acceptability.
 RA No. 7942 or the Philippine
Mining Act of 1995. The Act is
considered as the primary tool to
revitalize the mining industry but
with equal emphasis on both social
and environmental responsibilities.
Exploration. Means searching or
prospecting for mineral resources by
geological, geochemical and/or geophysical
surveys, remote sensing, test pitting,
trenching, drilling, shaft sinking, tunneling
or any other means for the purpose of
determining their existence, extent, quality
and quantity and the feasibility of mining
them for profit.
Development. Means the work undertaken to
explore and prepare an orebody or a mineral
deposit for mining, including the construction of
necessary infrastructure and related facilities.

Utilization. Means the extraction, mineral

processing and/or disposition of minerals.
Lease or Lease Contract. A Contract issued by
the government granting the lessee, his heirs,
successors, and assigns the right to extract and
utilize all mineral deposits found on or
underneath the surface of his mining claims
covered by the lease for his own benefit, and to
use the lands covered for the purpose or
purposes specified therein.
Area Relinquishment. The progressive
reduction of the contract area over the six (6)
years exploration period.

Service Contractor. A person or entity who

enters into an agreement to undertake a
specific work related to mining or quarrying
operations of a Contractor/Permit
Holder/Permittee/Lessee.
Environmental Compliance Certificate (ECC).
This is a document issued by the DENR
Secretary certifying that based on the
representations of the proponent, the proposed
project or undertaking as reviewed by the
Environmental Impact Assessment Review
Committee will not cause a significant negative
environmental impacts and that the proponent
is committed to implement its approved
mitigating measures.
Environmental Work Program. Refers to the
comprehensive and strategic environmental
management plan to achieve the environmental
management objectives, criteria and
commitments including protection and
rehabilitation of the disturbed environment
during the exploration period.
Environmental Protection and Enhancement
Program (EPEP). Refers to the
comprehensive and strategic environmental
management plan for the life of the mining
project on which AEPEPs are based and
implemented to achieve the environmental
management objectives, criteria and
commitments including protection and
rehabilitation of the disturbed environment.
5 MODES OF ENTRY IN AREAS OPEN TO
MINING

Exploration Permit. This is a permit issued by the

Government granting the Contractor/Permittee the
right to search or prospect for mineral resources.
 Grants the permit-holder to conduct exploration work for a limited
period only.
 Two (2) years, with possible extension up to 6 yrs;
 Maximum area: 16,200 hectares/permit;
32,000 has in the entire country.
 Area relinquishment: 25% for the first 2 years;
Thereafter, 10% of area/year;
 Priority to enter into either an MPSA or FTAA after submission of
Declaration of Mining Project Feasibility;
 Can be transferred, assigned, sold to other qualified
individuals/corporations.
 Mineral Agreements
a) Mineral Production Sharing Agreement (MPSA)
Contractor has the exclusive right to conduct mining operations within a
specified contract area.
• Limited to Filipinos or Filipino-owned corporation
(Foreign equity not to exceed 40%);
• Minimum authorized capital of PhP 10 M and PhP 10 M paid-up
• Maximum area: 8,100 Hectares/Agreement; 16,000 Has for the entire
country;
• 5 years Exploration Period; 3 years Construction and Development
Period; the rest for production;
• Contract period of 25 years; renewable for another 25 years;
• Can be transferred, assigned, or sold to any qualified
individuals/corporations;
• Can be converted into an FTAA
 Mineral Agreements

b) Co-Production Sharing Agreement

An Agreement between the Government and the Contractor wherein
the the former shall provide inputs to the mining operations other than
the mineral resource.

b) Joint Venture Agreement

An Agreement where a joint venture company is organized by the
Government and the Contractor with both parties having equity share.
Aside from the earnings in equity, the Government shall be entitled to a
share in the Gross Output.
These two types of mineral agreements are not yet available in view of the
limited resources of government and the standing policy on privatization giving
priority to private sector initiative.
Financial or Technical Assistance
Agreement. This is a contract between the
Government and the Contractor involving
financial or technical assistance for large-
scale exploration, development and
utilization of mineral resources.
 Financial or Technical Assistance Agreements
(FTAA)
• Minimum authorized capital: US$ 4,000,000;
• Minimum project cost: US$ 50,000,000;
• Open both to local and 100 % foreign-owned corporations;
• Maximum area: 81,000 hectares/applicant for the entire country;
• Area relinquishment: First 2 years - 25%; 10% annually thereafter;
• Mandatory Expenditures, per Hectare:
Y1 & 2=$2/ha; Y3 & 4=$8/ha; Y5=$18/ha; Y6=$23/ha;
• Contract periods (max):
Exploration – 6 yrs; Pre-Feasibility – 2 yrs; Feasibility – 2 yrs;
• Construction & Development – 3 years; the rest for production;
• Can be converted back into an MPSA;
• Can be transferred, assigned, or sold to qualified individuals or corporations;
 AREA REDUCTION DURING
EXPLORATION
Contrary to common belief that the grant of
large tracts of land to mining contractors
will result in massive land degradation, it
should be emphasized that the grant of as
much as 81,000 hectares for mineral
exploration is subject to relinquishment.
Small-Scale Mining Permit. This is a permit
issued by the Government granting the
Permittee the right to conduct mining activities
that rely heavily on manual labor using simple
implement and methods and do not use
explosives or heavy mining equipment.
Acceptance, processing, evaluation and
determination of administrative fees for Small-
Scale Mining Permits shall be the duty of the
Provincial/City Mining Regulatory Board.
Quarry Permit. This refers to the permit
granted to a Qualified Person for the
extraction and utilization of quarry
resources on public or private land.
Acceptance, processing, evaluation and
determination of administrative fees for
Quarry Permits shall be the duty of the
Provincial/City Mining Regulatory Board.
 AREAS CLOSED TO MINING
a) Old growth or virgin forests, proclaimed watershed
forest reserves, wilderness areas, mangrove forests,
mossy forests, national parks, provincial/municipal
forests, tree parks, greenbelts, game refuge, bird
sanctuaries and areas proclaimed as marine
reserves/marine parks and tourist zones as defined
by law and identified initial components of the
National Integrated Protected Areas System (NIPAS)
pursuant to R.A. No. 7586 and such areas expressly
prohibited thereunder, as well as under Department
Administrative Order No. 25, Series of 1992, and
other laws.
 AREAS CLOSED TO MINING

b) Areas covered by valid and existing

mining rights and mining applications.
c) Areas that the Secretary may exclude.
d) Areas expressly prohibited by law.
 MINING AND ANCESTRAL
LANDS/INDIGENOUS PEOPLES
In no case shall Mineral Agreements, FTAAs or
mining permits be granted in areas subject of
Certificates of Ancestral Domains/Ancestral Land
Claims (CADC/CALC) or in areas verified by the
Department Regional Office and/or other office or
agency of the Government authorized by law for
such purpose as actually occupied by Indigenous
Cultural Communities under a claim of time
immemorial possession except with their FREE
PRIOR INFORMED CONSENT (FPIC).
 FLOW PROCESS
FILING FINAL EVALUATION

PRELIMINARY EVALUATION APPROVAL

AREA STATUS AND CLEARANCE NUMBERING

CONSENT OF OTHER
AGENCIES REGISTRATION AND
RELEASING
SANGGUNIANG
CERTIFICATION

NCIP CERTIFICATION

P-P-B AND SECURING OF

CERTIFICATIONS
 Environmental and Social Provisions

Environmental Impact Assessment

All mining projects are considered to be environmentally critical and
therefore subject to environmental impact assessment (EIA) and to secure
the necessary Environmental Clearance Certificate from the Environmental
Management Bureau (EMB) of the Department of Environment and Natural
Resources. Activities during the exploration period are, however,
exempted from the EIA/ECC requirement.
Environmental Work Program
In lieu of the ECC requirement during the exploration period, all companies
have to submit an Environmental Work Program (EWP) to correspondingly
address any and all environmental impact that the exploration activities
may incur. This EWP has to have a definitive financial commitment that has
to be included in the annual exploration budget of the concerned company.
Environmental Protection and Enhance Program (EPEP)

During the development and production periods, and in

order to give support in attaining the objectives of the
Environmental Clearance Cerrtificate granted, the
company has to implement a duly approved EPEP. This
means that a company has to implement specific annual
plans, programs and activities to institute environmental
protection measures and/or rehabilitate mining-affected
areas.
Contingent Liability and Rehabilitation Fund (CLRF)

The company has to deposit in a government bank a minimum

amount to ensure just and timely compensation for damages and
progressive and sustainable rehabilitation. The Fund has two
components:
– Monitoring Trust Fund (MTF): Minimum of PhP 150,000.00 to
handle the expenses of a multi-sectoral Multi-Partite
Monitoring Team (composed of national and local
government, non-government organization or NGO, and
company representatives) in the conduct of regular
environmental monitoring;
– Rehabilitation Cash Fund (RCF): Minimum of PhP
5,000,000.00 for the company to use to undertake
environmental protection and rehabilitation measures; the
amount to be replenished regularly.
Final Mine Rehabilitation/Decommissioning Plan

Five (5) years before final decommissioning of the

contract/mining area, company must submit to a Mine
Rehabilitation Committee (composed of representatives
from the National and Local Government, non-
government organization, and from the company) a final
min rehabilitation and/or decommissioning plan(s),
including its financial requirements up to post-
decommissioning over a 10-year period for monitoring
purposes.
 Mine Waste and Tailings Fees

– Payment of PhP 0.05 per Metric Ton of mine

waste materials and Php 0.10 per MT of mill
tailings not utilized within a 2-year period;
– Payment of PhP 50.00 per MT for any
discharge of solid materials for tailings not
properly discharged into areas other than the
duly approved tailings disposal area
 Other Mandatory Environmental and Social Expenditures

• Allocation of approx. 10% of the total capital/project costs

for the initial environment-related capital expenditures;

• Annual allocation of a minimum of 1.5% of the operating

costs to undertake/implement the company’s Social
Development Program;

• Royalty payment of 1% of the Gross Output for the

Indigenous Cultural Communities, if the project/mining
area falls within a duly recognized Ancestral Domain
Claim.
 FOUR STAGES OF A MINE
a) Exploration
b) Development and Construction
c) Commercial Production
d) Rehabilitation/Decommissioning
 Stage 1: Exploration
 Scientific, non-destructive assessment of the
mineral potential of the land that can possibly lead
to a decision to mine.
 High cost, high risk endeavor without surety of
success.
 Not a land use nor a development activity.
 The contractor must prepare and submit for
approval a Mining Project Feasibility Study.
 Stage 2: Development & Construction:
 This stage is dependent on Stage 1.

 Submission of the Environmental Compliance

Certificate (ECC) by the contractor prior to any
development stage.

 Allocation of at least 10% of capital expenditures for

environment related expenses.
 Stage 3: Commercial Production:
A) Environmental Obligations:

 Environmental Work Program

 Environmental Protection and Enhancement

Program (EPEP)/Annual EPEP for the
progressive rehabilitation of mine affected
areas.

 Multi-partite Monitoring Team.

 Stage 3: Commercial Production:
A) Environmental Obligations:

 Approximately 3%-5% of annual direct mining

and milling costs shall be allocated for annual
environment protection programs.

 Contingent Liability and Rehabilitation Fund

(CLRF).
 Stage 3: Commercial Production:
B) Social Responsibilities:

 Preferential hiring of Filipinos (IP’s, local

communities).

 Preferential use of indigenous products,

services and technologies.

 Royalty payment of at least 1% of the gross

mining revenue for IPs.
 Stage 3: Commercial Production:
B) Social Responsibilities:

 Allotment of at least 1.5% of opearting costs

for community development and development
of mining technology and geosciences.

 Just compensation for surface

occupants/owners.
 Stage 3: Commercial Production:
C) Safeguards:
Establishment of a Contingent Liability and
Rehabilitation Fund (CLRF). This is in the form of a
Mine Rehabilitation Fund and the Mine Waste and
Tailings Fees.

The Mine Rehabilitation Fund shall be used for the

physical and social rehabilitation of Mine Affected
Areas.
Mine Wastes and Tailings Fee for damages caused
by mine wastes and tailings.
 Stage 4 : Mine Rehabilitation and
Decommissioning
 Submission of a Comprehensive Plan for the final
rehabilitation of disturbed lands including
provision for financial assurances to cover the
cost of rehabilitation and long term maintenance.

 MAIN OBJECTIVE - To restore as close as

possible all affected areas to its state before the
commencement of mining or to a pre-agreed state,
upon consultations with the local government and
the communities, compatible with the natural
environment.
SHARING FROM THE NATIONAL WEALTH

The revised IRR ensures the equitable sharing

of benefits among the four major stakeholders -
the National and Local Governments, the Mining
Contractor and the Host Communities.
 Other Permits:

MINERAL PROCESSING PERMITS

• A 5-year Permit, renewable for like periods, up to a

maximum of 25 years;
• Allows both local and 100% foreign-owned corporations;
• Requirement to submit adequate ore supply contract to
justify the establishment of the processing plant;
• Can be granted for cement plants, smelting and refining;
beneficiation plants; marble cutting and processing
plants, and others of similar nature.
SUSTAINABILITY IN THE CONTEXT OF MINING

The minerals industry can contribute to

Sustainable Development for as long as
mineral resources development is undertaken
with the primary objective of maximizing
environmental, economic and social benefits.
THANK YOU
&
GOOD DAY!