Mineral Lands Ppt

7/29/2019 Mineral Lands Ppt

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MINERAL LANDS

The Philippine Mining Act of1995 (RA 7942)

July 16, 2013


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History

1) Spanish regime the concept of jura regalia applied, bywhich royal grants by the king allowed people to ownundertake mining activities or own minerals and minerallands

2) American regime - under the Philippine Bill of 1902, there

was open and free exploration, occupation, and purchase ofmineral deposits and the land where they may be found bycitizens of the US or of said lands.EDU belonged to Filipinosand Americans through recording and location of miningclaims with corresponding performance of annual workobligation and improvements on the mining claims

3) 1935 Constitution all natural resources belonged to theState, but those rights, grants, leases, or concessions grantedearlier were excluded from the contemplation of jura regalia


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4) The Mining Act (CA 137, 11/7/1936) adoptedthe jura regalia doctrine; granted only lease rights

to mining claimants5) Parity Rights Ordinance Appended to the

Constitution (3/11/47) although aliens wereproscribed from participating in the EDU of thecountrys natural resources, US citizens wereallowed as well as US enterprises were allowedfor period July 4, 1946-July 3, 1974

5) Mineral Resources Decree of 1974 (PD 463) EDUthrough licenses, concessions, or leases

6) 1987 Constitution State has full control andsupervision subject to certain agreements;licenses, concessions, or leases disallowed

7) Philippine Mining Act of 1995


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Mineral ReservationsRA 7942 Sec. 5

Mineral Reservations

When the national interest so requires, such as when there is aneed to preserve strategic raw materials for industries critical to

national development, or certain minerals for scientific, cultural orecological value, the President may establish mineral reservationsupon the recommendation of the Director through the Secretary.Mining operations in existing mineral reservations and such otherreservations as may thereafter be established, shall be undertakenby the Department or through a contractor: Provided, That a smallscale-mining cooperative covered by Republic Act No. 7076 shall be

given preferential right to apply for a small-scale mining agreementfor a maximum aggregate area of twenty-five percent (25%) ofsuch mineral reservation, subject to valid existingmining/quarrying rights as provided under Section 112 Chapter XXhereof. All submerged lands within the contiguous zone and in theexclusive economic zone of the Philippines are hereby declared tobe mineral reservations.


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Other ReservationsRA 7942 Sec. 5

Mining operations in reserved lands other than mineralreservations may be undertaken by the Department, subjectto limitations as herein provided. In the event that theDepartment cannot undertake such activities, they may be

undertaken by a qualified person in accordance with therules and regulations promulgated by the Secretary. Theright to develop and utilize the minerals found therein shallbe awarded by the President under such terms and conditionsas recommended by the Director and approved by theSecretary: Provided, That the party who undertook the

exploration of said reservation shall be given priority. Themineral land so awarded shall be automatically excludedfrom the reservation during the term of the agreement:Provided, further, That the right of the lessee of a validmining contract existing within the reservation at the time ofits establishment shall not be prejudiced or impaired.


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Requirements for Exploration ofOther Reservations

1) A prospecting permit from the agency that hasjurisdiction over the area;

2) An exploration permit from the Mines andGeosciences Burea (MGB);

3) If the exploration reveals the presence ofcommercial deposit, the permittee applies withthe MGB for the exclusion of the area from thereservation;

4) Issuance of a Presidential Proclamationexcluding the area from the reservation;

5) A mining agreement approved by the DENR Sec.


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Definition

b. Block or meridional block means an area bounded byone-half (1/2) minute of latitude and one-half (1/2)minute of longitude, containing approximately eighty-one hectares (81 has.).

c. Bureau means the Mines and Geosciences Bureau

under the Department of Environment and NaturalResources.f. Contract area means land or body of water delineated

for purposes of exploration, development, orutilization of the minerals found therein.

h. Co-production agreement (CA) means an agreemententered into between the Government and one ormore contractors in accordance with Section 26(b)hereof.


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j. Development means the work undertaken to explore and prepare anore body or a mineral deposit for mining, including the constructionof necessary infrastructure and related facilities.

k. Director means the Director of the Mines and Geosciences Bureau.

m. Environmental compliance certificate (ECC) refers to the documentissued by the government agency concerned certifying that the

project under consideration will not bring about an unacceptableenvironmental impact and that the proponent has complied withthe requirements of the environmental impact statement system.

n. Environmental impact statement (EIS) is the document which aims

to identify, predict, interpret, and communicate informationregarding changes in environmental quality associated with aproposed project and which examines the range of alternatives forthe objectives of the proposal and their impact on the environment.


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q. Exploration means the searching or prospecting formineral resources by geological, geochemical orgeophysical surveys, remote sensing, test pitting,trenching, drilling, shaft sinking, tunneling or any othermeans for the purpose of determining the existence,extent, quantity and quality thereof and the feasibility ofmining them for profit.

r. Financial or technical assistance agreement means acontract involving financial or technical assistance forlarge-scale exploration, development, and utilization ofmineral resources.

x. Joint venture agreement (JVA) means an agreemententered into between the Government and one or morecontractors in accordance with Section 26(c) hereof.


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y. Mineral processing means the milling, beneficiation orupgrading of ores or minerals and rocks or by similarmeans to convert the same into marketable products.

aa. Minerals refers to all naturally occurring inorganicsubstance in solid, gas, liquid, or any intermediate stateexcluding energy materials such as coal, petroleum, naturalgas, radioactive materials, and geothermal energy.

ab. Mineral agreement means a contract between thegovernment and a contractor, involving mineralproduction-sharing agreement, co-production agreement,or joint-venture agreement.

ad. Mineral resource means any concentration ofminerals/rocks with potential economic value.


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ak. Ore means a naturally occurring substance or material fromwhich a mineral or element can be mined and/or processedfor profit.

al. Permittee means the holder of an exploration permit.

aq. Qualified person means any citizen of the Philippines with

capacity to contract, or a corporation, partnership, association,or cooperative organized or authorized for the purpose ofengaging in miring, with technical and financial capability toundertake mineral resources development and dulyregistered in accordance with law at least sixty per

centum (60%) of the capital of which is owned by citizens ofthe Philippines: Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person forpurposes of granting an exploration permit, financial ortechnical assistance agreement or mineral processing permit.


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ar. Quarrying means the process of extracting, removing and disposing quarryresources found on or underneath the surface of private or public land.

as. Quarry permit means a document granted to a qualified person for theextraction and utilization of quarry resources on public or private lands.

at. Quarry resources refers to any common rock or other mineral substances asthe Director of Mines and Geosciences Bureau may declare to be quarryresources 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, volcanic cinders, andvolcanic glass: Provided, That such quarry resources do not contain metalsor metallic constituents and/or other valuable minerals in economicallyworkable quantities: Provided, further, That non-metallic minerals such as

kaolin, feldspar, bull quartz, quartz or silica, sand and pebbles, bentonite,talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, preciousand semi-precious stones, and other non-metallic minerals that may later bediscovered and which the: Director declares the same to be of economicallyworkable quantities, shall not be classified under the category of quarry

resources.


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Classification of Minerals1) First group Metals or metalliferous ores.

Those which contain any of the metallic elements or minerals, ortheir combinations, such as gold, silver, platinum, tin,chromium, iron, manganese, copper, nickel, lead, zinc,cinnabar, tungsten, and the like.

2) Second group Precious stones.Those which contain minerals mainly used for ornamental

purposes such as diamond, ruby, emerald, sapphire, topaz,amethyst, zircon, aquamarine, opal, jade, agate, tourmaline,beryl, garnet, turquoise and the like.

3) Third group Fuels.Those which contain combustible substances in solid, liquid,

gaseous form, such as peat, coal, mineral oils, natural gas, oilshales, asphalt, and the like, but not the recent products oforganic life.


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4) Fourth group Salines and mineral waters.

Those which contain surface or subterranean soluble substances orwaters which by their mineral contents are classified as mineralwaters, such as salt, nitrates, sulphurated, carbonated, sodic, calcic,and other waters.

5) Fifth group Building stone in place, clays, fertilizers, and other

nonmetals.

Those which contain nonmetallic substances, such as:

(a) Those used for building or construction purposes, such asmarble, granite, clay, and the like.

(b) Asbestos, feldspar, lime, mica, guano, phosphate, potash,saltpeter, niter, and the like.

(c) Other substances used in the manufacture of paints, ceramicsand fertilizers and for other industrial purposes.


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Areas Open to Mining Operations

RA 7942 Sec. 18

Subject to any existing rights or reservations and prior agreements ofall 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 assistanceagreement applications. Any conflict that may arise under thisprovision shall be heard and resolved by the panel of arbitrators.

PD 705 Sec. 47

Mining operations in forest lands (public forest, permanent forest orforest reserves, forest reservations) shall be regulated andconducted with due regard to protection, development andutilization of other surface resources.


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Areas Closed to Mining Operations

a. In military and other government reservations, except uponprior written clearance by the government agencyconcerned;

b. Near or under public or private buildings, cemeteries,

archeological and historic sites, bridges, highways,waterways, railroads, reservoirs, dams or other infrastructureprojects, public or private works including plantations orvaluable crops, except upon written consent of thegovernment agency or private entity concerned subject totechnical evaluation and validation by the Bureau;

-unless authorized by the DENR Sec. with permission of theDPWH Sec.


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c. In areas covered by valid and existingmining rights.

- example: areas covered by FTAA apps whichshall be opened for quarry resources mining

applications upon written consent of theFTAA applicants

- sand and gravel permit apps , consent of

FTAA. EP, MA apps not required but thosecovering sand, gravel and/or alluvial goldrequire consent


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d. In areas expressly prohibited by law;

e. In areas covered by small-scale miners asdefined by law unless with prior consent ofthe small-scale miners, in which case a

royalty payment upon the utilization ofminerals shall be agreed upon by the parties,said royalty forming a trust fund for thesocioeconomic development of the

community concerned;


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g. DENR Project Areas upon prior consentfrom the concerned agency


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Exploration PermitAn exploration permit grants the right to conduct exploration

for all minerals in specified areas. The Bureau shall havethe authority to grant an exploration Permit to a qualifiedperson.

An exploration permit shall be for a period of two (2) years,

subject to annual review and relinquishment or renewalupon the recommendation of the Director.

Notes:

-Term shall be 2 years from issuance, renewable for like

periods, but not to exceed 4yrs for non-metallic mineralexploration or 6yrs for metallic.

-Transfer allowed subject to approval of the Sec. uponrecommendation of the Dir


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Notes:

-exploration does not allow the extraction of the

minerals that may be discovered, but only thelocation of the minerals

-exploration may be directly undertaken by the

DENR, however, if it cannot do so, any qualifiedperson in specified areas determined by the Sec.

-foreign-owned corporations may hold explorationpermits

-grantee spends its own funds without any right torecover anything should no minerals incommercial quantities be discovered


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- if the grantee determines that the area hascommercial viability, he may file with the MGB

(within the term of the permit) a declaration ofmining project feasibility and a work programfor development, the approval thereof andcompliance with other requirements of RA 7942shall entitle him to a mineral agreement

- A declaration of mining project feasibility meansa document proclaiming the presence of mineralsin a specific site, which are recoverable by sociallyacceptable, environmentally safe, and

economically sound methods.- Exploration permits can be revoked by the State in

the public interest.


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Mineral Agreements (MAs)

1) Mineral Production Sharing Agreement (MPSA)

2) Co-production Agreement (CA)

3) Joint-venture Agreement (JVA)

Notes:

-the above are transferable with the approval of the

DENR Sec upon recommendation of the Dir.-term is 25yrs renewable for same period


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Pertinent Provision of the 1987Constitution

Art. XII Sec. 2

xxx The exploration, development, and

utilization of natural resources shall be under thefull control and supervision of the State. The Statemay directly undertake such activities, or it mayenter into co-production, joint venture, orproduction-sharing agreements with Filipinocitizens, or corporations or associations at leastsixty per centum of whose capital is owned bysuch citizens. xxxxx


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Summary:

1) The State may directly undertake EDU; OR

2) The State may enter into:

-co-production-joint venture

-production-sharing agreements

With Filipino citizens or corp/assoc at least60% Fil-owned


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Mineral Production SharingAgreement (MPSA)

-contract between the contractor and theRepublic of the Philippines represented bythe DENR Sec.

-the total value of the production and sale ofminerals derived from the mining operationsshall be accounted for and divided betweenthe govt and the contractor

-Contractor-assumes the exploration risk suchthat if no minerals are found, he is notentitled to reimbursement


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-govt share consists in excise taxes

-the govt shares in the gross output, govthas least participation;

-contractor provides the financing,

technology, management, and personnel


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Co-production Agreement (CA) govt provides input to the mining

operations

- govt compensation consists in excise taxes,income taxes, allowance, withholdingtaxes, other duties/fees


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Joint-venture Agreement (JVA)- govt has the greatest participation

- govt organizes a joint-venture company,in which, together with the contractor, it

shares in the equity- govt also shares in the gross output aside

from sharing in the equity

- govt compensation consists in excise taxes,income taxes, allowance, withholdingtaxes, other duties/fees


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Who are qualified to contract withthe govt?

1) Individuals

- Fil citizen, of legal age, with capacity toenter into a contract

2) Corp/partnership/assoc/coop

- 60% Fil-owned- duly registered according to law


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Application Process

1) File in the region where area is located2) Approval by the DENR Sec.3) Dir notifies contractor to register application

with the MGB (inside mineral reservations)or with the Regional Office (outsidereservations) within 15 working days fromreceipt of notice

4) President receives copies5) President provides Congress with copies of

approves MAs within 30 days fromapproval by Sec.


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Maximum Areas Allowable forMineral Agreements

Onshore Offshore

Individuals

a) In any province 10 blocks

b) Entire Phils 20 50

Corp, et. al.

a) In any province 100

b) ) Entire Phils 200 500

c) EEZ Determinable by theDENR Sec

Determinable by theDENR Sec


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Financial or Technical AssistanceAgreement (FTAA)

-applicable to large-scale EDU

-govt share consist, among others, income tax, excisetax, special allowance, w/tax on dividends andinterests, duties/fees

-govt share same as with JVA and CA except that inFTAA, govt share commences only aftercontractor has fully recovered its pre-operatingexpenses, exploration, and development expenses

-EDU of gold, copper, nickel, chromite, lead, zinc,etc. EXCEPT cement raw matls, marble, granite,sand, gravel, construction aggregates


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-term is 25yrs renewable for another 25yrs

-mine should have a profitable operating life ofmore than 10yrs to ensure the share of the govt,given a maximum 5-yr period to recover costs

-may be transferred with the approval of the Pres.

-contractor agrees to give preference to qualifiedFilipinos in employment and to transfer thetechnology to them; aliens may be hired forwork requiring high specialized experience

-contractor likewise agrees to give preference togoods and services produced locally


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Art. XII Sec. 2xxxxxxxxxThe President may enter into agreements with foreign-owned

corporations involving either technical or financial assistancefor large-scale exploration, development, and utilization ofminerals, petroleum, and other mineral oils according to thegeneral terms and conditions provided by law, based on realcontributions to the economic growth and general welfare ofthe country. In such agreements, the State shall promote thedevelopment and use of local scientific and technicalresources.

The President shall notify the Congress of every contractentered into in accordance with this provision, within thirtydays from its execution.


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Maximum Areas Allowable forFTAA

1) Onshore

-1,000 meridional blocks

2) Offshore

-4,000

3) Combination of the two without exceedingthe limits for onshore and offshore


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Mining Operations under FTAA

1) Exploration 2yrs from executionextendible for another 2yrs

2) Pre-feasibility study, if warranted up to

2yrs from expiration of exploration period3) Feasibility study up to 2yrs from

expiration of 1 and 2 or from declaration of

mining project feasibility4) Development, construction, utilization

remaining term of FTAA


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Application Process

1) application filed with the MGB, but if theapp covers two or more regions, with theRegional Office with the largest area

covered2) Publication, posting, radio announcement

3) DENR Sec. recommends approval to the

Pres.4) Pres notifies Congress within 30 days from

approval


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La Bugal-Blaan Tribal Assoc., Inc.v Ramos

Issues

1) WON WMCP FTAA violates the 1987Constitution considering that it allows foreign-owned companies not only to provide financialand technical assistance, but allows them tooperate and manage mining activities when thestate should have full control/supervision overEDU of the countrys natural resources

2) WON either technical or financial assistanceshould be taken to mean technicaland financialassistance


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Ruling1) Given the inadequacy of Fil capital and

technology in large-scale EDU activities, theState may secure the help of foreign assistors.The assistor may be given reasonablemanagement, operational, marketing, audit,and other prerogatives to protect its

investments and to enable the business tosucceed. The foreign contractors providecapital, technology, and technical know-how,and managerial expertise in the creation and

operation of large-scale mining/extractiveenterprises; and the government, through theDENR and MGB actively exercises controland supervision over the entire operation


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2) The use of the word involving impliesthat there agreements with foreign

corporations are not limited to merefinancial or technical assistance.


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Quarry Resources

Quarry sand and gravel, guano, andgemstone resources in private and/orpublic lands may be extracted, removed,

disposed and/or utilized.

In large-scale quarry operations of cement

raw matls, marble, granite, and sand andgravel and construction aggregates, anyqualified person may apply for an MA.


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Notes

-quarry license permit shall be filed with the

Provincial Gov/City Mayor through theProvincial/City Mining Regulatory Board

-area not more than five has. And a

production rate of not more than 50,000tons in a yr and/or project cost not morethan P10M

-term 5yrs renewable in like period but notto exceed 25yrs


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Miscellaneous

Ore transport permit - specifies the origin and quantity of non-processed ores or mineralsMineral trading registration traders should be registered with

the DTI and accredited by the DENR, copy sent to MGBMineral processing permit issued by the Sec.; term of 5yrs

renewable for like periods but not to exceed 25yrs

Absence of the above-stated documents shall be prima facieevidence of illegal mining and will lead to the seizure of thematerials and the conveyances and tools used pendinginvestigation. If finally found to be obtained withoutdocuments, a complaint for theft of minerals may ensue.

A person conducting mineral operations may enter into privatelands upon agreement with surface owners and payment ofjust compensation. Disagreements may be brought before thePanel of Arbitrators (POA). Agreement as to entry shall beregistered with the MGB.

D f E i d


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Department of Environment andNatural Resources

RA 7942 Sec. 8

The Department shall be the primary government agencyresponsible for the conservation, management, development,and proper use of the States mineral resources including

those in reservations, watershed areas, and lands of the publicdomain. The Secretary shall have the authority to enter intomineral agreements on behalf of the Government upon therecommendation of the Director, promulgate such rules andregulations as may be necessary to implement the intent andprovisions of this Act.

-Findings of facts of the DENR Sec. are conclusive.


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Mines and Geosciences Bureau

1) The Bureau shall have direct charge in theadministration and disposition of mineral landsand mineral resources;

2) shall undertake geological, mining, metallurgical,chemical, and other researches as well as geologicaland mineral exploration surveys. Provided, that forareas closed to mining application as provided underSection 15 hereof, the Bureau can undertake studies

for purposes of research and development;

3) The Bureau may confiscate surety, performance andguaranty bonds posted through an order to bepromulgated by the Director;


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4) The Director shall recommend to theSecretary the granting of mineral agreements

or to endorse to the DENR Sec. for action bythe President the grant of FTAA to dulyqualified persons;

5) shall monitor the compliance by the

contractor of the terms and conditions of themineral agreements.6) The Director may deputize, when necessary,

any member or unit of the Philippine

National Police, barangay, duly registerednon-governmental organization (NGO) orany qualified person to police all miningactivities.


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7) To cancel or recommend cancellation,after due process, mining rights, miningapplications, and mining claims for non-compliance with pertinent laws, rules, andregulations.

8) To hear and decide cases involving,among others, cancellation/enforcementof mining contracts except those that

involve judicial question.


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The Local Government

Local Government Code Sec. 8

b. In coordination with the Bureau/RegionalOffice(s) and subject to valid and existing mining

rights, to approve applications for small-scalemining, sand and gravel, quarry, guano, gemstonegathering and gratuitous permits and forindustrial sand and gravel permits not exceedingfive (5) hectares;

h. To act as mediator between the IndigenousCultural Community(ies) and the Contractor(s) asmay be requested;


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Jurisdiction and ReviewA. Panel of Arbitrators (POA) has the exclusive and original

jurisdiction to hear and decide as to questions of fact and oftechnical experience:

1) Disputes involving rights to mining areas2) Disputes involving MAs and permits3) Disputes involving surface owners, occupants, and

claimholders/concessionaires4) Disputes pending before the MGB and the DENR

B. Appeal before the Mines Adjudication Board (MAB) within 15daysfrom receipt of decision of POA

C. Court of Appeals under Rule 43

D. Supreme Court (via certiorari) within 30days from receipt ofdecision of MGB.


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Peoples Small-Scale MiningAct of 1991 (RA 7076)

P ti t P i i f th 1987


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Art. XII Sec. 2xxxxxxxx

The Congress may, by law, allow small-scale utilization of natural resources byFilipino citizens, xxxx

Notes:-small-scale mining may be undertaken only by

Filipino citizens


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Small-scale mining refers to mining activities that rely heavily onmanual labor using simple tools and methods. It does not useexplosives or heavy mining equipment and requires only a

small capital investment. Agreements; CA, JV, MPSA.Areas excluded: existing forest, tourist, marine parks and

wildlife reservations

Applications shall be filed with the Office of the Provincial/City

Mayor through the Provincial/City Mining Regulatory Boardfor areas outside mineral reservations and in the regionaloffice for those inside mineral reservations.

Provincial/City Mining Regulatory Board awards contracts toqualified Filipino citizens individually or in the form of a

cooperative of small-scale miners. The contract shall not besubcontracted, assigned, or transferred.

Transport of ores/minerals/mineral products issued accordingto the rules of the Provincial/City Mining Regulatory Board.

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