Professional Documents
Culture Documents
Ra 7942 (Ep, Ma, Ftaa)
Ra 7942 (Ep, Ma, Ftaa)
Mineral Reservations
o areas established and proclaimed as mineral reservations by the President upon the
recommendation of the MGB Director through the Secretary
o includes all submerged lands within the contiguous zone and EEZ
Government Reservations
o all proclaimed reserved lands for specific purposes other than mineral reservations.
Requirements:
1. Publication of Notice of Public Hearing
a. at least 30 days before conduct of public hearing
b. Published once in
i. Local newspaper
c. Posted on bulletin boards of
i. all affected municipalities and barangays
2. Conduct of public hearings by MGB
a. Invite all concerned sectors and communities (e.g., NGOs, People’s Organizations,
LGUs)
3. Recommendation Letter of MGB RD to the DENR Sec. stating the grounds for the establishment,
disestablishment, or modification of Mineral Reservation
4. Publication of the recommendation letter
5. DENR Secretary shall cause periodic review of existing Mineral Reservations
a. detailed geological, mineral, and ecological evaluation
b. to determine whether their continued existence is consistent with
i. National interest
ii. Need to preserve strategic raw materials for industries critical to national
development
iii. Need to preserve certain minerals for scientific, cultural, or ecological value
6. Recommendation of Secretary to President
7. President issues Proclamation to
a. alter or modify the boundaries, or
b. revert the boundaries to the public domain, without prejudice to prior existing rights
8. Effect: all valid and existing mining rights shall be respected
Government Reservations
1. Government may directly undertake exploration, development, and utilization of mineral
resources, or if it cannot,
2. Through qualified persons
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3. That the Permittee who undertook the exploration of said Reservation shall be given priority
Mining Operations within Mineral and Government Reservations
Payment of Royalty
Mineral Reservation - not less than 5% of the market value of the gross output of the
minerals/mineral products extracted or produced, exclusive of all other taxes
10% share of royalty, and 10% of other revenues (administrative, clearance, exploration, and other
related fees)
1. accrue to MGB as a Trust Fund
2. deposited in Government depository bank to be allotted for
a. special projects
b. other administrative expenses related to the exploration, development, and environmental
management of minerals in Government Reservations.
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SCOPE OF MINING APPLICATIONS
1. Public or private lands not covered by valid and existing mining rights and mining applications
2. Lands covered by expired/abandoned/canceled mining/quarrying rights
3. Mineral Reservations
4. Timber or forest lands
Approving Agency
1. Military and other Government Reservations Upon prior written clearance by the
Government agency having jurisdiction over
such reservations
2. Areas near or under public or private Upon written consent of the concerned
buildings, cemeteries, archaeological and Government agency or private entity subject
historic sites, bridges, highways, waterways, to technical evaluation and validation by the
railroads, reservoirs, dams, or other MGB
infrastructure projects, public or private works,
including plantations or valuable crops
3. Areas covered by FTAA applications which Upon the written consent of the FTAA
shall be opened for quarry resources mining applicants, except:
applications 1. Sand and gravel permit applications
shall not require consent from the
FTAA, EP or MA applicant, except for
MA or EP applications covering sand,
gravel and/or alluvial gold
4. Areas covered by small-scale mining Upon prior consent of the small-scale miners
1. royalty payment, upon the utilization of
minerals
2. form a Trust Fund for the
socioeconomic development of the
concerned community
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3. Areas which the Secretary may exclude based on proper assessment of their environmental impacts
and implications on sustainable land uses, such as built-up areas and critical watersheds with
appropriate barangay/municipal/city/ provincial Sanggunian ordinance specifying therein the location
and specific boundary of the concerned area
4. Offshore areas within five hundred (500) meters from the mean low tide level and onshore areas
within two hundred (200) meters from the mean low tide level along the coast
5. In case of seabed/marine aggregate quarrying, offshore areas less than 1,500 meters from the mean
low tide level of land or island(s) and where the seabed depth is less than 30 meters measured at
mean sea level
6. Protected areas categorized and established under the National Integrated Protected Areas System
(NIPAS) under RA No. 7586 (EO 79 s. 2012)
7. Prime agricultural lands, in addition to lands covered by RA No. 6657, or the Comprehensive Agrarian
Reform Law of 1988, as amended, including plantations and areas devoted to valuable crops, and
strategic agriculture and fisheries development zones and fish refuge and sanctuaries declared as
such by the Secretary of the Department of Agriculture (DA) (EO 79 s. 2012)
8. Tourism development areas, as identified in the National Tourism Development Plan (NTDP); (EO 79
s. 2012)
9. Other critical areas, island ecosystems, and impact areas of mining as determined by current and
existing mapping technologies, that the DENR may hereafter identify pursuant to existing laws, rules,
and regulations, such as, but not limited to, the NIPAS Act (EO 79 s. 2012)
10. Areas expressly prohibited by law
Ancestral Lands
Requirement:
2. Verified by the DENR and/or other office or FPIC obtained in accordance with the
government agency as actually occupied by customary laws of the ICC concerned
ICCs under a claim of time immemorial
possession
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3. Negotiation for Royalty: Request to act as mediators - representatives from the Bureau/Regional
Office(s) concerned, Department offices concerned, LGUs concerned, relevant NGOs/POs and the
Office of the Northern/Southern Cultural Communities
4. In case of disagreement, DENR shall resolve within 3 months
5. Royalty shall form part of a Trust Fund for the socioeconomic well-being of the ICCs in accordance
with the management plan formulated in the ancestral land or domain area
6. That the royalty payment shall be managed and utilized by the ICCs concerned
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COMMON PROVISIONS FOR EP, MA AND FTAA
An Exploration Permit (EP) - is an initial mode of entry in mineral exploration allowing a qualified person
to undertake exploration activities for mineral resources in certain areas open to mining
A Mineral Agreement is an agreement between a Contractor and the Government wherein the
Government grants to the Contractor the exclusive right to conduct mining operations within, but not title
over, the contract area. Mining operations that are allowed under Mineral Agreements include
development/construction and utilization of mineral resources including the continuance of exploration
works during the conduct of development/construction/utilization activities. Mineral Agreements are bound
by the 60%-40% constitutional limitation on foreign ownership and are classified into:
2. Co-Production Agreement (CA) - a mineral agreement wherein the Government provides inputs
to the mining operations other than the mineral resources; and
3. Joint Venture Agreement (JVA) - a mineral agreement wherein the Government and the
Contractor organize a joint venture company with both parties having equity shares. For its share,
the Government is entitled to a share in the gross output of the mining project aside from its
earnings in the equity of the company.
An Financial or Technical Assistance Agreement (FTAA) may be entered into between a Contractor
and the Government for the large-scale exploration, development and utilization of gold, copper, nickel,
chromite, lead, zinc and other minerals except for cement raw materials, marble, granite, sand and gravel
and construction aggregates.
Terms of Permit:
Financial or Technical
Exploration Permit Mineral Agreements
Assistance Agreement
2 yrs. from issuance 25 yrs. from execution 25 yrs. from execution
Renewable: 2 yrs. but not to Renewable: 25 yrs. under Renewable: 25 yrs. under
exceed: same terms and conditions, terms and conditions as may
4 yrs. for nonmetallic without prejudice to changes be provided for by law and
mineral exploration or mutually agreed upon by the mutually agreed upon by the
6 yrs. for metallic government and the parties
mineral exploration contractor
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Maximum Area Qualified Person may hold at one time
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Qualified Persons
Financial or Technical
Exploration Permit Mineral Agreements
Assistance Agreement
1. Any Filipino citizen of legal 1. Any Filipino citizen of legal 1. Any Filipino citizen of legal
age and with capacity to age and with capacity to age and with capacity to
contract; contract contract
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Mandatory Requirements for Application of EP/MA/FTAA
EP MA FTAA
1. Application Form ✓ ✓ ✓
2. For corporation/ partnership/ association/ cooperative: ✓ ✓ ✓
SEC/CDA-certified true copies of Certificate of Registration, *min ACS 2B
Articles of Incorporation/ Partnership/Association and By- PUC 500M
upon grant of
Laws (minimum ACS 100M and PUC 6.25M DMO 2013-01) FTAA
3. Location Map/Sketch Plan (1:50,000 NAMRIA topographic ✓ ✓ ✓
map) showing coordinates/boundaries (in tabulated form)
with major environmental features/other projects (prepared,
sealed and signed by a deputized Geodetic Engineer)
4. Work Program (prepared, sealed and signed by a licensed 2 yrs. 3 yrs. 2 yrs.
Mining Engineer or Geologist)
5. Proof of technical competence in the form of: ✓ ✓ ✓
a. CV and track records in exploration/ environmental
management.
b. Sworn statement of the technical person(s) who will
undertake the implementation of the Work Programs or
employment contract/proof of availed service(s)
6. Proof of financial capability: ✓ ✓ ✓
a. For an individual:
i. Latest ITR
ii. Credit lines/bank guarantees/deposits of at least
P2.5M
b. For corporation/ partnership/ association/ cooperative:
i. Latest audited Financial Statements
ii. Annual Report for the preceding year
iii. Credit lines/bank guarantees/deposits
7. Affidavit of Undertaking (using MGB form) ✓ ✓ ✓
a. The list of all mining applications he/she/it has filed
b. Mining permit/contract granted, including the
corresponding hectarage and location of the areas,
disaggregated on a per province basis; and
c. list of other Applicant(s)/Contractor(s)/ Permittee(s) in
which more than seventy percent (70%) of the authorized
capital stock is held by stockholders of the applicant,
including the corresponding hectarage and location of the
area disaggregated on a per province basis.
8. FTAA Proposal ✓
9. Proof of payment of Filing Fee ✓ ✓ ✓
10.Mining Project Feasibility Study - ✓ -
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EP MA FTAA
1. Environmental Compliance Certificate - ✓ ✓
2. Environmental Protection and Enhancement Program - ✓ ✓
3. Social Development and Management Program - ✓ ✓
4. Certificate of Environmental Management and Community ✓ ✓ ✓
Relations (CEMCRR) or Certificate of Exemption
5. National Commission on Indigenous Peoples (NCIP) ✓ ✓ ✓
Certification
a. For non-ICC/IP area: Certificate of Non-Overlap or
Report on the Field Based Investigation
b. For ICC/IP area: Certification Precondition or
Memorandum of Agreement by and among the
applicant, ICC/IP concerned and the NCIP – shall be
submitted within 90 days from issuance of EP
6. Approved Survey Plan/Application for Order of Survey ✓ ✓
7. Area Status and Clearance from the One Stop-Shop ✓ ✓ ✓
Committee
8. Proof of payment of clearance fee ✓ ✓ ✓
9. Proof(s) that the Notice of Application was: ✓ ✓ ✓
a. Published once in -
i. Local newspaper
ii. National newspaper
b. Posted for 1 week on the bulletin boards of -
i. MGB Regional Office(s)
ii. Province(s) and/or
iii. Municipality(s)/City(s)
c. Radio announced daily for 1 week in a local radio
program
10. Posting of financial guarantees from bonding - - ✓
companies/financial institutions
a. Financial guarantees/performance bond, letter of
credit, or other forms of deposits
b. From Government-accredited bonding company or
financial institution
c. Issued in favor of the Government upon notification by
the Secretary
d. In a currency equivalent to the expenditure
obligations of the applicant for any year;
i. foreign currency negotiable with the BSP or
ii. Philippine Peso
11. Certification from the Panel of Arbitrators concerned as to any ✓ ✓ ✓
adverse claims/ protest/ opposition
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Venue of Application:
1. Regional Office where the areas of interest are located
2. MGB for mineral reservations
3. If application transcends 2 or more regions: apply with region with largest area covered, cc: other
Regional Office by applicant within 3 working days from date of filing
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Requirements for Approval of application
1. Publication
2. Resolution of adverse claim, protest, opposition,
Newspaper Publication
Within 5 working days from receipt of the Notice, the EP applicant shall cause the publication
1. Once in two (2) newspapers
a. one of general circulation published in Metro Manila
b. circulation in the municipality or province where the proposed permit area is located, if there
be such newspapers; otherwise, in the newspaper published in the nearest municipality or
province.
2. Affidavits of publication shall be submitted by the EP applicant to the MGB within five (5) days from
the date of publication of the notice
Posting of Notice
The MGB shall cause the posting of the notice for one week, in a language generally understood in the
concerned locality where it is posted
1. MGB bulletin board
2. Provincial/Municipal/City LGU
3. Copy furnished the barangay(s) where the proposed permit area is located
Radio Announcements
Made daily for one (1) week in a local radio program:
1. Name of applicant
2. Complete address of the applicant
3. Area Location
4. Duration of the permit applied for
5. Instructions that information regarding EP application may be obtained at the MG
Certification of Compliance
1. Issued by authorized officer/s within 5 working days from the last date of posting and radio
announcement
2. Stating that the posting/radio announcement have been complied with
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b. MGB Regional Office for endorsement and transmittal to POA
c. Through P/CENRO for referral to MGB RO for endorsement and transmittal to appropriate
POA
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Transfer or Assignment of EP, MA or FTAA Application
1. Subject to approval of the Regional Director
2. Taking account the national interest and public welfare
3. Transfer or assignment shall be subject to eligibility requirements
4. Transfer or assignment shall not be allowed in cases involving speculation
3. Permittee shall register EP 5. MGB/Regional Office shall 5. MGB shall release the FTAA
in the regional office release MA to contractor to the Contractor after
after registration registration
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Conversion of Permits
EP to MA or FTAA MA to MA or FTAA FTAA to EP
Optional Optional Optional
Totally or partially Totally or partially Totally or partially
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mandatory requirements 5. Compliance with all requirements
6. Evaluate and approve conversion
5. Payment of required 4. Payment of required 7. Payment of required conversion
conversion fee conversion fee fee
8. A copy of the Mineral Agreement
shall be submitted to the President
Term of EP shall be Term of new MA or FTAA shall Term of MA shall be equivalent to the
deducted from the terms of be equivalent to the remaining remaining period of the FTAA
the Exploration/Pre- period of the original
Feasibility Study/Feasibility agreement
Study Period of the Mineral
Agreement or FTAA
Requirements:
1. Letter of Intent addressed to MGB
a. Provide its intention over the area that may not be covered by the conversion to EP
2. Compliance with mandatory requirements
3. Payment of required conversion fee
4. Date of filing of EP shall be reckoned from the date when the MA/FTAA was filed
Transfer or
Transfer or Assignment of MA Transfer or Assignment of FTAA
Assignment of EP
Total or Partial Total or Partial
To Qualified Person/s To Qualified Person/s To Qualified Person/s
Subject to the approval Requirements:
of MGB 1. File Application
2. Payment of Application Fee
3. Transferor/assignor or contractor has complied with all the terms and
conditions of the Agreement, Law, and IRR at the time of
transfer/assignment
4. Deed of Assignment containing, among others:
a. the transferee/assignee assumes all obligations of the
transferor/assignor under the Agreement
5. For MA: Subject to approval of Secretary, upon recommendation of
MGB / For FTAA: Upon endorsement by MGB, the Secretary may
recommend to President the transfer or assignment of an FTAA
a. If not acted upon by the Secretary/President within 30 calendar
days from official receipt – deemed automatically approved
i. Unless patently unconstitutional, illegal or
ii. where such transfer or assignment is violative of
pertinent rules and regulations
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6. If circumstances warrant and upon the recommendation of the Director,
the Secretary may impose additional conditions for the approval of
transfer/assignment
Cancellation/Termination
Cancellation of EP Cancellation/Revocation/Termination of an FTAA
Request for cancellation addressed to Due process
Secretary/Director/Regional Director concerned
Grounds: Grounds:
1. violation(s) by the Permittee of the terms and provided in Chapter 24
conditions of EP
2. Failure to secure the required proof of
consultation with/project presentation to the
Sanggunian pursuant to RA 7160 within 1
year from issuance of EP
Effect: Effect
1. Upon issuance of the Order declaring with 1. Not release the Contractor from all obligations
finality the cancellation of the Permit covering it may have, particularly regarding ecological
areas within Government Reservations management, at the time of cancellation/
2. Affected areas shall automatically be reverted revocation/termination
to its original status
3. Not release the Permittee from all obligations
it may have, particularly regarding ecological
management, at the time of relinquishment or
cancellation.
Withdrawal
Withdrawal From MA Withdrawal From FTAA
Request for Withdrawal in writing addressed to Request for Withdrawal in writing to the Secretary
the Director cc: Regional Office cc: MGB
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3. Successors-in-interest
Rights:
1. Exclusively conduct mining operations within the contract area with full rights of ingress and egress
2. Right to enter and occupy the contract area
a. If private or other parties are affected - permittee shall first discuss with the said parties the
extent, necessity and manner of entry, occupation and exploration
b. In case of disagreement: POA shall resolve the conflict
3. All other rights provided for in Mining Laws and IRR
Obligations:
1. Fully comply with the terms and conditions of the EP/MA/FTAA
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EXPLORATION PERMITS
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1. Not release the Permittee from all obligations it may have, particularly with regard to ecological
management, at the time of relinquishment or cancellation.
Deemed Approved:
1. If requirements have been complied
2. EP Application for renewal is still awaiting approval 1 month after date of filing
3. Affidavit by the applicant attesting to the full compliance with all the pertinent requirements
4. MGB Director shall issue Renewed EP within 5 working days from receipt of affidavit, for registration
and release
5. Without prejudice to undertake the necessary investigation to determine any liability as to the non-
issuance of the renewed EP within the prescribed period
6. The renewal of EP for the purpose of filing of the declaration of mining project feasibility shall require
approval of the Secretary
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2. filing of the declaration of mining project feasibility and the pertinent MA or
FTAA
4. Complete and final exploration report shall be required in the renewal of EP
5. In case the EP expires prior to approval of declaration of mining project feasibility and/or filing of the
MA or FTAA application
a. EP shall be deemed automatically extended until such time that the MA or FTAA application
is approved
Effect of approval by MGB Director - grant the Permittee the exclusive right to a Mineral Agreement or
FTAA over the permit area
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Permit Area
More than 5,000 ha:
First 2 years: at least 20% of the permit area
Extended exploration period: at least 10% of the remaining permit area
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Minimum Ground Year Pesos/Hectare
Expenditures 1 100
2 100
3 400
4 400
5 900
6 1,150
7 and 1,150
onwards
If minimum ground expenditure for a given year is not met for justifiable
reasons - unexpended amount may be spent on the following year of the
Permit.
If the minimum ground expenditures for the entire term are not met -
unexpended amount shall be paid by the Permittee and shall accrue to
MGB to be used for mining operations in Mineral Reservations or to
other purposes as may be determined by the Bureau
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PROCESS FLOWCHART FOR EP
Filing at MGB Regional Office
(Submission of MGB Form No. 05-1 and 5 sets
of mandatory requirements and payment fee)
Preliminary Evaluation
Initial Evaluation
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MINERAL AGREEMENTS
Additional Mandatory Acceptance Requirements for Holders of Valid and Existing or Expired Mining
Lease Contracts, Operating Agreements, Quarry Permits/Licenses or Unperfected Mining/Quarry Claims
(Whenever Applicable):
1. Appropriate environmental report on the rehabilitation of mined-out and/or mine waste/tailings-
covered areas and anti-pollution measures undertaken during the mining operations.
2. Certification from the Regional Office (RO) concerned that the mining/quarry claims are valid and
subsisting or Report by RO concerned re: compliance with the terms and conditions of the
contract/agreement/permit.
3. ECC for any new phase outside of the originally approved operation under the mining project
4. Mining Project Feasibility Study (MGB Form No. 5-3) or Project Description & Detailed FS
incorporating the social and environmental expenditures, taxes and fees paid for MA applicant with
existing mining operation
5. Approved survey plan of the mining area.
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4. Endorsement from Sanggunian concerned
5. Certification from the Panel of Arbitrators of no pending mining dispute/conflict
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TERMS & CONDITIONS OF MA
Title A stipulation that the Contractor shall not, by virtue of the Mineral
Agreement, acquire any title over the contract/mining area without
prejudice to the acquisition by the Contractor of the land/surface rights
through any mode of acquisition provided for by law;
Representation and 1. The Contractor has, or has access to, all the financing and
Warranties technical capability and technology required
2. Provide an exploration period up to 2 years from date of issuance,
renewable for 2 years but not to exceed a total term of 6 years for
nonmetallic minerals exploration or 8 years for metallic minerals
exploration, subject to annual review and approval by the MGB
a. In cases where further exploration is warranted beyond the
6- or 8-year period and on condition that the Contractor has
substantially implemented the Exploration and
Environmental Work Programs as verified by the Bureau,
the Director may further grant renewal of the Exploration
Period
b. The Contractor shall be required to set up a performance
surety equivalent to the expenditure requirement of the
Exploration and Environmental Work Programs.
c. The conduct of feasibility studies shall be included during
the term of the Exploration Period.
d. The Contractor shall file in the Regional Office concerned
the Declaration of Mining Project Feasibility within the term
of the Exploration Period.
3. The applicant has all the qualifications and none of the
disqualifications for entering into the Agreement
Requirements for Renewal Submit application to MGB CO, copy furnished region.
1. Justification of renewal
2. Comprehensive technical reports on the outcome of the 2-year
Exploration and Environmental Work Programs, signed by a
licensed Mining Engineer or Geologist and an Environmental
Officer
3. Audited FS covering the term of the Exploration Period
4. 2-year Exploration Work Program duly prepared, signed and sealed
by a licensed Mining Engineer or Geologist
5. Environmental Work Program
6. Certification by the Regional Office concerned as to the compliance
of the Contractor with the terms and conditions of the MA during the
Exploration Period; and
7. Other supporting papers as the Bureau may require
Stipulation on 1. Contractor may relinquish totally or partially the original contract
Relinquishment area during the exploration period
2. After exploration period and prior to or upon approval of Declaration
of Mining Project Feasibility by the Director, the Contractor shall
finally relinquish to the Government any portion of the contract area
which
a. shall not be necessary for mining operations and
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b. not covered by any declaration of mining feasibility
3. Submission of geologic report and pertinent maps in the scale of
1:50,000
4. Considerations in the evaluation of the Mining Project Feasibility
Study (MPFS)
a. Expected life of mine
b. Grade management
c. Mining sequence
d. Conservation measures and
e. Capability of the project to pay the Government Share and
f. Capability to absorb the environmental and social costs
Provision Guaranteeing the 1. Guarantee the payment of government share notwithstanding the
Percent of Government grant of any incentives by other government agency/ies
Share 2. Number of operating years without tax holidays should be more
than the number of operating years with tax holidays
3. Minimum exploration expenditures for the remaining area after
relinquishment shall be based on the approved EWP
Stipulation on Total Mining 1. Each mining area after final relinquishment shall not be more than
Area after Final 5,000 ha for metallic minerals and 2,000 ha for nonmetallic
Relinquishment minerals
2. The Director, with the approval of the Secretary, may allow a
Contractor to hold a larger mining area depending upon the nature
of the deposit subject to technical verification and evaluation by the
Bureau as to the technical/financial capability of the Contractor
Stipulation on Compliance The mining operations shall be conducted in accordance with the
With Mining Laws and IRR provisions of the Mining Laws and IRR
Stipulation on Preference to 1. That the Contractor shall give preference to goods and services
Filipino Services and Goods produced and offered in the Philippines of comparative quality and
cost
2. The Contractor shall give preference to qualified Filipino
construction enterprises, construction materials and skills available
in the Philippines, Filipino sub-contractors for road construction and
transportation, and Philippine household equipment, furniture, and
food
3. The Contractor is obliged to give preference to Filipinos in all types
of mining employment for which they are qualified, and that the
technology shall be transferred to the same
Stipulation on Non- 1. The Contractor shall not discriminate based on gender
Discrimination/Gender Bias 2. The Contractor shall respect the rights of women workers to
participate in policy and decision-making processes affecting their
rights and benefits
Stipulation on Environment 1. The Contractor to effectively use the best available appropriate
Protection anti-pollution technology and facilities to protect the environment
2. Restore or rehabilitate mined-out areas and other areas affected by
mine waste/mill tailings and other forms of pollution or destruction
in compliance with the requirements of the ECC
3. This should be undertaken in coordination with the
EMB/Department Regional Office
4. The Contractor shall comply with its obligations under its EPEP and
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its AEPEP, including the allocation of the prescribed annual
environmental expense pursuant to Sec. 171
5. The Contractor shall utilize the best available appropriate and
efficient mining and processing technologies
6. The Contractor shall undertake exploration work on the area as
specified in its Agreement based on an approved Work Program:
Provided, That a negative variance of at least 20% in the Work
Program and corresponding expenditures shall be subject to
approval of the Director
Stipulation on Reporting 1. The Contractor shall furnish the Government an annual report of its
mining operations and records of geologic, accounting, and other
relevant data
2. The book of accounts and records shall be open for inspection by
the Government
3. The Contractor shall submit annually starting from the date of
approval of the Agreement, progress reports of the exploration
activities
4. The progress reports shall be accompanied by raw geologic,
geophysical, and geochemical data plotted in a 1:50,000 scale
map, at a minimum
5. A quarterly report containing activities and accomplishments for
each quarter shall also be submitted
6. At the end of the exploration term, the Contractor shall submit the
final report with the detailed list of activities with the corresponding
expenditures. The final report shall be accompanied by a 1:50,000
geologic map of the contract area acceptable by international
standards
7. All reports referred to herein shall be submitted to the
Bureau/Regional Office concerned
8. That the Contractor in the case of a juridical entity shall annually
submit a copy of its SEC-received GIS
Stipulation on Disposition 1. The Contractor shall dispose of the minerals and by-products
produced at the highest market price
2. Negotiate for more advantageous terms and conditions subject to
the right to enter long-term sales or marketing contracts or foreign
exchange and commodity hedging contracts which the Government
acknowledges to be acceptable notwithstanding that the sale price
of the minerals may from time to time be lower, or the terms and
conditions of sales are less favorable, than that available elsewhere
3. The MGB is furnished a copy of the said Sales Agreement subject
to confidentiality between the Bureau and the Contractor;
Stipulation on Consultation A stipulation providing for consultation and arbitration with respect to
and Arbitration the interpretation and implementation of the terms and conditions of the
Agreement
Stipulation on Monetary The Contractor shall pay fees, taxes, royalties, and other obligations in
Obligations accordance with existing laws, rules, and regulations
Stipulations on Alien 1. That alien employment shall be limited to technologies requiring
Employment and Use of highly specialized training and experience subject to the required
Foreign Technologies approval under existing laws, rules, and regulations
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2. That in every case where foreign technology are utilized and where
alien executives are employed, an effective program of training
understudies shall be undertaken
Stipulation on Compliance The Contractor shall conform with laws, rules and regulations
with Labor Laws regarding, among others, labor, safety, and health standards
Stipulation on Confining The Contractor shall confine its mining operations to its contract/mining
Mining Operations within the area and that it shall not interfere with the rights of other
Permit Area Contractors/Lessees/operators/Permittees/Permit Holders
Stipulation on Protection of 1. The Contractor shall recognize and respect the rights, customs,
Locals/ICCs and traditions of local communities, particularly ICCs
2. The Contractor shall contribute to the development of the host and
neighboring communities of the mining area, local geoscience and
mining technology
Stipulation on Cancellation The MA shall be canceled, revoked, or terminated for failure of the
of MA Contractor to comply with the terms and conditions thereof or for other
grounds as provided for in Sec. 230
Stipulation on Non- The withdrawal by the Contractor from the MA shall not release it from
Extinguishment of all financial, environmental, legal and fiscal obligations under the
Obligations Agreement
Stipulation on Designation of That a financing institution that has granted a loan to the Contractor for
Assignees for Loan the mining project shall have the authority to:
Obligations 1. designate its assignee of the Mineral Agreement in case of the
Contractor’s default from such loan
2. That the assignee is a Qualified Person
3. The assignment shall be subject to approval by the Secretary
Stipulation on That the Contractor shall commence development, construction and/or
Commencement of Mining utilization activities after the required endorsement of the project by the
Activities vis-à-vis Sanggunian concerned is secured pursuant to RA 7160
Endorsement of Sanggunian
Stipulation on Assumption of The Contractor shall assume all the risks which are inherent and
Risks incidental to the mining operations such that it will not be entitled for
reimbursement of expenses even if no minerals in commercial quantity
are developed and produced
Stipulation on Inspection of 1. The financial records of the Contractor related to the mining
Financial Records operations shall be open to Government inspection of all
reasonable times upon prior written notice
2. The Government or its representative shall be part of the committee
or group that shall audit the financial records of the Contractor
Stipulation on Denying That the MA does not grant beneficial ownership of the minerals to the
Beneficial Ownership of Contractor
Minerals
Stipulation On Minimum That the Contractor shall execute a Sworn Statement during the
Ground Expenditures existence of the Agreement that:
1. It shall comply with the minimum ground expenditures during the
exploration and prefeasibility periods:
Year Pesos/Hectare
1 100
2 100
3 400
4 400
5 900
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6 1,150
7 and onwards 1,150
2. In case the minimum ground expenditure for a given year is not met
a. For justifiable reasons – the unexpended amount may be
spent on the following year of the given exploration period
of the Agreement
b. Unjustified – the unexpended amount shall be paid by the
Contractor and shall accrue to the Bureau to be used for
mining operations in Mineral Reservations or to other
purposes as may be determined by the Bureau
c. The failure of the Contractor to pay the said amount within
the prescribed period shall be a ground for the cancellation
of its Agreement
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MINERAL AGREEMENT PROCESS FLOWCHART
Preliminary Evaluation
NCIP
Certification
Publication, Posting, Radio Announcement and
Securing of Certifications
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FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENTS (FTAA)
Activities to be completed
1. Exploration – up to 2 years from date of FTAA execution, extendible for another 2 years
2. Pre-Feasibility Study, if warranted – up to 2 years from expiration of the exploration period
3. Feasibility study – up to 2 years from the expiration of the exploration/pre-feasibility study period
4. Development, construction and utilization - upon approval of the declaration of mining project
feasibility up to the remaining years of the FTAA
* Any 2 or more of the above periods may be simultaneously undertaken in one approved contract area, as the need of the Contractor may
arise, subject to the pertinent provisions of Sec. 56
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pre-operating expenses, exploration, and development expenditures, inclusive.
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The following shall be strictly considered in evaluating FTAA Proposals
1. Contributions to the economic growth
2. Contribution to general welfare of the country
3. The development of local scientific and technical resources,
4. Contribution to community and Local Government development programs
Negotiation of FTAA
1. Negotiating Panel shall recommend execution of FTAA and approval to President
a. Upon being satisfied with the terms & conditions of the proposed FTAA
b. With the applicant's compliance with all the requirements
2. Negotiating Panel shall calendar the proposed FTAA for negotiation
3. Negotiating Panel shall make the corresponding notification to the applicant
4. If after the negotiation, the terms and conditions acceptable to the Negotiating Panel have been
incorporated in the proposed FTAA
a. a Resolution to that effect shall be made within fifteen (15) working days and signed, at least,
by the majority of the Negotiating Panel
b. Based on the Resolution, the Secretary shall forthwith recommend the negotiated FTAA
application to the President for consideration/approval
c. The President shall notify Congress of the approved FTAA within thirty (30) calendar days
from the date of its approval.
1. While awaiting for the approval of the FTAA application by the President
2. The Secretary may, upon the request of the FTAA applicant,
3. The term of the TEP shall be deducted from the exploration period of the FTAA
4. In the event that the FTAA application is disapproved by the President, the TEP is deemed
automatically canceled
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infrastructure and development in the contract area
a. Fifty Million US Dollars ($50,000,000.00) or its Philippine
Peso equivalent
5. In case the minimum ground expenditure for a given year is not met
a. For justifiable reasons – the unexpended amount may be
spent on the following year of the given exploration period
of the Agreement
Title A stipulation that the Contractor shall not, by virtue of the FTAA,
acquire any title over the contract/mining area without prejudice to the
acquisition by the Contractor of the land/surface rights through any
mode of acquisition provided for by law
Representation and 1. The Contractor has, or has access to, all the financing and
Warranties technical capability and technology required
2. Provide an exploration period up to 2 years from date of issuance,
renewable for 2 years, subject to annual review by the Secretary
3. The applicant has all the qualifications and none of the
disqualifications for entering into the Agreement
4. That the Contractor shall not raise any form of financing from
domestic sources of funds, whether in Philippine or foreign
currency, for conducting its mining operations for and in the
contract/mining area except for payments for dispositions for
a. its equity
b. foreign investments in local enterprises which are qualified
for repatriation and
c. local supplier's credits and
d. such other generally accepted and permissible financial
schemes for raising funds for valid business purposes
Stipulation on First 2 years: at least 25% of the original contract area
Relinquishment Extended exploration period and Pre-Feasibility Study Period: at least
10% of the remaining contract area
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ii. not covered by any declaration of mining feasibility
with corresponding
b. Submission of geologic report and pertinent maps in the
scale 1:50,000
c. Each mining area after final relinquishment shall not be
more than 5,000 ha
i. The Director, with the approval of the Secretary,
may allow a Contractor to hold a larger mining area
depending upon
1. the nature of the mineral deposit and
2. technical verification by the Bureau
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Stipulation on Performance That the Contractor shall perform its activities within the periods
of Activities within the Period expressed in the FTAA plans and work programs, save as may be
in FTAA excused by force majeure
Stipulation on Preference to 1. That the Contractor shall give preference to goods and services
Filipino Services and Goods produced and offered in the Philippines of comparative quality and
cost
2. The Contractor shall give preference to qualified Filipino
construction enterprises, construction materials and skills available
in the Philippines, Filipino sub-contractors for road construction and
transportation, and Philippine household equipment, furniture, and
food
3. The Contractor is obliged to give preference to Filipinos in all types
of mining employment for which they are qualified, and that the
technology shall be transferred to the same
Stipulation on Non- 1. The Contractor shall not discriminate based on gender
Discrimination/Gender Bias 2. The Contractor shall respect the rights of women workers to
participate in policy and decision-making processes affecting their
rights and benefits
Stipulation on Environment 1. The Contractor to effectively use the best available appropriate
Protection anti-pollution technology and facilities to protect the environment
2. Restore or rehabilitate mined-out areas and other areas affected by
mine waste/mill tailings and other forms of pollution or destruction
in compliance with the requirements of the ECC and PD 984
3. This should be undertaken in coordination with the
EMB/Department Regional Office
4. The Contractor shall comply with its obligations under its EPEP and
its AEPEP, including the allocation of the prescribed annual
environmental expense pursuant to Sec. 171
5. The Contractor shall utilize the best available appropriate and
efficient mining and processing technologies
6. The Contractor shall undertake exploration work on the area as
specified in its Agreement based on an approved Work Program:
Provided, That a negative variance of at least 20% in the Work
Program and corresponding expenditures shall be subject to
approval of the Director
Stipulation on Reporting 1. The Contractor shall furnish the Government an annual report of its
mining operations and records of geologic, accounting, and other
relevant data
2. The book of accounts and records shall be open for inspection by
the Government
3. The Contractor shall submit annually starting from the date of
approval of the Agreement, progress reports of the exploration
activities
4. The progress reports shall be accompanied by raw geologic,
geophysical, and geochemical data plotted in a 1:50,000 scale
map, at a minimum
5. A quarterly report containing activities and accomplishments for
each quarter shall also be submitted
6. At the end of the exploration term, the Contractor shall submit the
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final report with the detailed list of activities with the corresponding
expenditures. The final report shall be accompanied by a 1:50,000
geologic map of the contract area acceptable by international
standards
7. All reports referred to herein shall be submitted to the
Bureau/Regional Office concerned
8. The Contractor in the case of a juridical entity shall annually submit
a copy of its SEC-received GIS
Stipulation on Non- The withdrawal by the Contractor from the FTAA shall release it from
Extinguishment of any and all financial, environmental, legal and/or fiscal obligations
Obligations including settlement of all obligations that should have accrued to the
Government during the term of the FTAA
Stipulation on Cancellation 1. A stipulation that the FTAA shall be canceled, revoked or
Of FTAA for Failure to terminated for failure of the Contractor to comply with the terms and
Comply with Terms and conditions
Conditions 2. In case of cancellation
a. contractor shall no longer be required to meet the minimum
expenditure requirement for the remaining period
b. such cancellation/revocation/termination shall not release
the Contractor from any and all obligations it may have,
particularly with regard to ecological management, at the
time of cancellation/ revocation/termination
Stipulation on Disposition 1. The Contractor shall dispose of the minerals and by-products
produced at the highest market price
2. Negotiate for more advantageous terms and conditions subject to
the right to enter long-term sales or marketing contracts or foreign
exchange and commodity hedging contracts which the Government
acknowledges to be acceptable notwithstanding that the sale price
of the minerals may from time to time be lower, or the terms and
conditions of sales are less favorable, than that available elsewhere
3. The MGB is furnished a copy of the said Sales Agreement subject
to confidentiality between the Bureau and the Contractor;
Stipulation on Consultation A stipulation providing for consultation and arbitration with respect
and Arbitration to the interpretation and implementation of the terms and
conditions of the Agreement
Stipulation on Monetary The Contractor shall pay fees, taxes, royalties, and other
Obligations obligations in accordance with existing laws, rules, and regulations
Stipulations on Alien 1. That alien employment shall be limited to technologies requiring
Employment and Use of highly specialized training and experience subject to the required
Foreign Technologies approval under existing laws, rules, and regulations
2. That in every case where foreign technology are utilized and where
alien executives are employed, an effective program of training
understudies shall be undertaken
Stipulation on Designation of That the Contractor shall conform with laws and rules to:
Assignees for Loan 1. Designate its assignee of the FTAA in case of the Contractor’s
Obligations default from such loan
2. That the assignee is a Qualified Person
3. The assignment shall be subject to approval by the President
Stipulation on Confining The Contractor shall confine its mining operations to its contract/mining
Mining Operations within the area and that it shall not interfere with the rights of other
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Permit Area Contractors/Lessees/operators/Permittees/Permit Holders
Stipulation on Protection of 1. The Contractor shall recognize and respect the rights, customs,
Locals/ICCs and traditions of local communities, particularly ICCs
2. The Contractor shall contribute to the development of the host and
neighboring communities of the mining area, local geoscience and
mining technology
Stipulation on That prior to the commencement of the development and/or utilization
Commencement of Mining activities, the Contractor shall:
Activities vis-à-vis 1. comply with the required consultation/with project presentation to
Endorsement of Sanggunian the Sanggunian concerned prior to the implementation of the EWP
2. secure endorsement of the project by the Sanggunian
Provision Guaranteeing the 1. Provision guaranteeing the payment of the Government Share
Percent of Government notwithstanding the grant of any incentives by other Government
Share agency/ies.
2. The mine should have a profitable operating life of more than ten
(10) years, to ensure the collection of the Government Share, given
the cost recovery period.
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FTAA PROCESS FLOWCHART
Preliminary Evaluation
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