Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
CHAPTER I
INTRODUCTORY PROVISIONS
Section 1
Title
This
Act shall be known as the "Philippine Mining Act of 1995."
Section 2
Declaration of Policy
All
mineral resources in public and private lands within the territory
and exclusive economic zone of the Republic of the Philippines are
owned by the State. It shall be the responsibility of the State to
promote their rational exploration, development, utilization and
conservation through the combined efforts of government and the
private sector in order to enhance national growth in a way that
effectively safeguards the environment and protect the rights of
affected communities.
Section 3
Definition of Terms
As
used in and for purposes of this Act, the following terms, whether in
singular or plural, shall mean:
a.
Ancestral lands refers to all lands exclusively and actually
possessed, occupied, or utilized by indigenous cultural communities
by themselves or through their ancestors in accordance with their
customs and traditions since time immemorial, and as may be defined
and delineated by law.
b.
Block or meridional block means an area bounded by one-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 Natural Resources.
d.
Carrying capacity refers to the capacity of natural and human
environments to accommodate and absorb change without experiencing
conditions of instability and attendant degradation.
e. Contiguous
zone refers to water, sea bottom and substratum measured twenty-four
nautical miles (24 n.m.) seaward from the base line of the Philippine
archipelago.
f.
Contract area means land or body of water delineated for purposes of
exploration, development, or utilization of the minerals found
therein.
g.
Contractor means a qualified person acting alone or in consortium who
is a party to a mineral agreement or to a financial or technical
assistance agreement.
h.
Co-production agreement (CA) means an agreement entered into between
the Government and one or more contractors in accordance with Section
26(b) hereof.
i.
Department means the Department of Environment and Natural Resources.
j. Development
means the work undertaken to explore and prepare an ore body or a
mineral deposit for mining, including the construction of necessary
infrastructure and related facilities.
k.
Director means the Director of the Mines and Geosciences Bureau.
l. Ecological
profile or eco-profile refers to geographic-based instruments for
planners and decision-makers which presents an evaluation of the
environmental quality and carrying capacity of an area.
m. Environmental
compliance certificate (ECC) refers to the document issued by the
government agency concerned certifying that the project under
consideration will not bring about an unacceptable environmental
impact and that the proponent has complied with the requirements of
the environmental impact statement system.
n.
Environmental impact statement (EIS) is the document which aims to
identify, predict, interpret, and communicate information regarding
changes in environmental quality associated with a proposed project
and which examines the range of alternatives for the objectives of
the proposal and their impact on the environment.
o.
Exclusive economic zone means the water, sea bottom and subsurface
measured from the baseline of the Philippine archipelago up to two
hundred nautical miles (200 n.m.) offshore.
p.
Existing mining/quarrying right means a valid and subsisting mining
claim or permit or quarry permit or any mining lease contract or
agreement covering a mineralized area granted/issued under pertinent
mining laws.
q.
Exploration means the searching or prospecting for mineral resources
by geological, geochemical or geophysical surveys, remote sensing,
test pitting, trenching, drilling, shaft sinking, tunneling or any
other means for the purpose of determining the existence, extent,
quantity and quality thereof and the feasibility of mining them for
profit.
r.
Financial or technical assistance agreement means a contract
involving financial or technical assistance for large-scale
exploration, development, and utilization of mineral resources.
s. Force majeure
means acts or circumstances beyond the reasonable control of
contractor including, but not limited to, war, rebellion,
insurrection, riots, civil disturbance, blockade, sabotage, embargo,
strike, lockout, any dispute with surface owners and other labor
disputes, epidemic, earthquake, storm, flood or other adverse weather
conditions, explosion, fire, adverse action by government or by any
instrumentality or subdivision thereof, act of God or any public
enemy and any cause that herein describe over which the affected
party has no reasonable control.
t.
Foreign-owned corporation means any corporation, partnership,
association, or cooperative duly registered in accordance with law in
which less than fifty per centum (50%) of the capital is owned
by Filipino citizens.
u.
Government means the government of the Republic of the Philippines.
v. Gross output
means the actual market value of minerals or mineral products from
its mining area as defined in the National Internal Revenue Code.
w. Indigenous
cultural community means a group or tribe of indigenous Filipinos who
have continuously lived as communities on communally-bounded and
defined land since time immemorial and have succeeded in preserving,
maintaining, and sharing common bonds of languages, customs,
traditions, and other distinctive cultural traits, and as may be
defined and delineated by law.
x.
Joint venture agreement (JVA) means an agreement entered into between
the Government and one or more contractors in accordance with Section
26(c) hereof.
y.
Mineral processing means the milling, beneficiation or upgrading of
ores or minerals and rocks or by similar means to convert the same
into marketable products.
z.
Mine wastes and tailings shall mean soil and rock materials from
surface or underground mining and milling operations with no economic
value to the generator of the same.
aa.
Minerals refers to all naturally occurring inorganic substance in
solid, gas, liquid, or any intermediate state excluding energy
materials such as coal, petroleum, natural gas, radioactive
materials, and geothermal energy.
ab.
Mineral agreement means a contract between the government and a
contractor, involving mineral production-sharing agreement,
co-production agreement, or joint-venture agreement.
ac. Mineral land
means any area where mineral resources are found.
ad.
Mineral resource means any concentration of minerals/rocks with
potential economic value.
ae.
Mining area means a portion of the contract area identified by the
contractor for purposes of development, mining, utilization, and
sites for support facilities or in the immediate vicinity of the
mining operations.
af.
Mining operation means mining activities involving exploration,
feasibility, development, utilization, and processing.
ag.
Non-governmental organization (NGO) includes nonstock, nonprofit
organizations involved in activities dealing with resource and
environmental conservation, management and protection.
ah. Net assets
refers to the property, plant and equipment as reflected in the
audited financial statement of the contractor net of depreciation, as
computed for tax purposes, excluding appraisal increase and
construction in progress.
ai.
Offshore means the water, sea bottom and subsurface from the shore or
coastline reckoned from the mean low tide level up to the two hundred
nautical miles (200 n.m.) exclusive economic zone including the
archipelagic sea and contiguous zone.
aj.
Onshore means the landward side from the mean tide elevation,
including submerged lands in lakes, rivers and creeks.
ak. Ore means a
naturally occurring substance or material from which a mineral or
element can be mined and/or processed for profit.
al.
Permittee means the holder of an exploration permit.
am. Pollution
control and infrastructure devices refers to infrastructure,
machinery, equipment and/or improvements used for impounding,
treating or neutralizing, precipitating, filtering, conveying and
cleansing mine industrial waste and tailings as well as eliminating
or reducing hazardous effects of solid particles, chemicals, liquids
or other harmful byproducts and gases emitted from any facility
utilized in mining operations for their disposal.
an.
President means the President of the Republic of the Philippines.
ao. Private land
refers to any land belonging to any private person which includes
alienable and disposable land being claimed by a holder, claimant, or
occupant who has already acquired a vested right thereto under the
law, although the corresponding certificate or evidence of title or
patent has not been actually issued.
ap.
Public land refers to lands of the public domain which have been
classified as agricultural lands and subject to management and
disposition or concession under existing laws.
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 of engaging in
miring, with technical and financial capability to undertake mineral
resources development and duly registered in accordance with law at
least sixty per centum (60%) of the capital of which is owned
by citizens of the Philippines: Provided, That a legally organized
foreign-owned corporation shall be deemed a qualified person for
purposes of granting an exploration permit, financial or technical
assistance agreement or mineral processing permit.
ar. Quarrying
means the process of extracting, removing and disposing quarry
resources found on or underneath the surface of private or public
land.
as.
Quarry permit means a document granted to a qualified person for the
extraction and utilization of quarry resources on public or private
lands.
at.
Quarry resources refers to any common rock or other mineral
substances as the Director of Mines and Geosciences Bureau may
declare to be quarry resources such as, but not limited to, andesite,
basalt, conglomerate, coral sand, diatomaceous earth, diorite,
decorative stones, gabbro, granite, limestone, marble, marl, red
burning clays for potteries and bricks, rhyolite, rock phosphate,
sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic
glass: Provided, That such quarry resources do not contain metals or
metallic constituents and/or other valuable minerals in economically
workable 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, precious and semi-precious stones, and
other non-metallic minerals that may later be discovered and which
the: Director declares the same to be of economically workable
quantities, shall not be classified under the category of quarry
resources.
au.
Regional director means the regional director of any mines regional
office under the Department of Environment and Natural Resources.
av. Regional
office means any of the mines regional offices of the Department of
Environment and Natural Resources.
aw.
Secretary means the Secretary of the Department of Environment and
Natural Resources.
ax.
Special allowance refers to payment to the claim-owners or surface
right-owners particularly during the transition period from
Presidential Decree No. 463 and Executive Order No. 279, series of
1987.
ay.
State means the Republic of the Philippines.
az.
Utilization means the extraction or disposition of minerals.
CHAPTER II
GOVERNMENT MANAGEMENT
Section 4
Ownership of Mineral Resources
Mineral
resources are owned by the State and the exploration, development,
utilization, and processing thereof shall be under its full control
and supervision. The State may directly undertake such activities or
it may enter into mineral agreements with contractors.
The State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution.
Section 5
Mineral Reservations
When
the national interest so requires, such as when there is a need to
preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or
ecological value, the President may establish mineral reservations
upon the recommendation of the Director through the Secretary. Mining
operations in existing mineral reservations and such other
reservations as may thereafter be established, shall be undertaken by
the Department or through a contractor: Provided, That a small
scale-mining cooperative covered by Republic Act No. 7076 shall be
given preferential right to apply for a small-scale mining agreement
for a maximum aggregate area of twenty-five percent (25%) of such
mineral reservation, subject to valid existing mining/quarrying
rights as provided under Section 112 Chapter XX hereof. All submerged
lands within the contiguous zone and in the exclusive economic zone
of the Philippines are hereby declared to be mineral reservations.
A ten per centum (10%) share of all royalties and revenues to be derived by the government from the development and utilization of the mineral resources within mineral reservations as provided under this Act shall accrue to the Mines and Geosciences Bureau to be allotted for special projects and other administrative expenses related to the exploration and development of other mineral reservations mentioned in Section 6 hereof.
Section 6
Other Reservations
Mining
operations in reserved lands other than mineral reservations may be
undertaken by the Department, subject to limitations as herein
provided. In the event that the Department cannot undertake such
activities, they may be undertaken by a qualified person in
accordance with the rules and regulations promulgated by the
Secretary. The right to develop and utilize the minerals found
therein shall be awarded by the President under such terms and
conditions as recommended by the Director and approved by the
Secretary: Provided, That the party who undertook the exploration of
said reservation shall be given priority. The mineral land so awarded
shall be automatically excluded from the reservation during the term
of the agreement: Provided, further, That the right of the lessee of
a valid mining contract existing within the reservation at the time
of its establishment shall not be prejudiced or impaired.
Section 7
Periodic Review of Existing Mineral Reservations
The
Secretary shall periodically review existing mineral reservations for
the purpose of determining whether their continued existence is
consistent with the national interest, and upon his recommendation,
the President may, by proclamation, alter or modify the boundaries
thereof or revert the same to the public domain without prejudice to
prior existing rights.
Section 8
Authority of the Department
The
Department shall be the primary government agency responsible for the
conservation, management, development, and proper use of the State’s
mineral resources including those in reservations, watershed areas,
and lands of the public domain. The Secretary shall have the
authority to enter into mineral agreements on behalf of the
Government upon the recommendation of the Director, promulgate such
rules and regulations as may be necessary to implement the intent and
provisions of this Act.
Section 9
Authority of the Bureau
The
Bureau shall have direct charge in the administration and disposition
of mineral lands and mineral resources and shall undertake
geological, mining, metallurgical, chemical, and other researches as
well as geological and mineral exploration surveys. The Director
shall recommend to the Secretary the granting of mineral agreements
to duly qualified persons and shall monitor the compliance by the
contractor of the terms and conditions of the mineral agreements. The
Bureau may confiscate surety, performance and guaranty bonds posted
through an order to be promulgated by the Director. The Director may
deputize, when necessary, any member or unit of the Philippine
National Police, barangay, duly registered non-governmental
organization (NGO) or any qualified person to police all mining
activities.
Section 10
Regional Offices
There
shall be as many regional offices in the country as may be
established by the Secretary, upon the recommendation of the
Director.
Section 11
Processing of Applications
The
system of processing applications for mining rights shall be
prescribed in the rules and regulations of this Act.
Section 12
Survey, Charting and Delineation of Mining Areas
A
sketch plan or map of the contract or mining area prepared by a
deputized geodetic engineer suitable for publication purposes shall
be required during the filing of a mineral agreement or financial or
technical assistance agreement application. Thereafter, the contract
or mining area shall be surveyed and monumented by a deputized
geodetic engineer or bureau geodetic engineer and the survey plan
shall be approved by the Director before the approval of the mining
feasibility.
Section 13
Meridional Blocks
For
purposes of the delineation of the contract or mining areas under
this Act, the Philippine territory and its exclusive economic zone
shall be divided into meridional blocks of one-half (1/2) minute of
latitude and one-half (1/2) minute of longitude.
Section 14
Recording System
There
shall be established a national and regional filing and recording
system. A mineral resource database system shall be set up in the
Bureau which shall include, among others, a mineral rights management
system. The Bureau shall publish at least annually, a mineral gazette
of nationwide circulation containing among others, a current list of
mineral rights, their location in the map, mining rules and
regulations, other official acts affecting mining, and other
information relevant to mineral resources development. A system and
publication fund shall be included in the regular budget of the
Bureau.
CHAPTER III
SCOPE OF APPLICATION
Section 15
Scope of Application
This
Act shall govern the exploration, development, utilization and
processing of all mineral resources.
Section 16
Opening of Ancestral Lands for Mining Operations
No
ancestral land shall be opened for mining-operations without prior
consent of the indigenous cultural community concerned.
Section 17
Royalty Payments
for Indigenous Cultural Communities
In
the event of an agreement with an indigenous cultural community
pursuant to the preceding section, the royalty payment, upon
utilization of the minerals shall be agreed upon by the parties. The
said royalty shall form part of a trust fund for the socioeconomic
well-being of the indigenous cultural community.
Section 18
Areas Open to Mining Operations
Subject
to any existing rights or reservations and prior agreements of all
parties, all mineral resources in public or private lands, including
timber or forestlands as defined in existing laws, shall be open to
mineral agreements or financial or technical assistance agreement
applications. Any conflict that may arise under this provision shall
be heard and resolved by the panel of arbitrators.
Section 19
Areas Closed to Mining Applications
Mineral
agreement or financial or technical assistance agreement applications
shall not be allowed:
a.
In military and other government reservations, except upon prior
written clearance by the government agency concerned;
b. Near or under
public or private buildings, cemeteries, archeological and historic
sites, bridges, highways, waterways, railroads, reservoirs, dams or
other infrastructure projects, public or private works including
plantations or valuable crops, except upon written consent of the
government agency or private entity concerned;
c.
In areas covered by valid and existing mining rights;
d. In areas
expressedly prohibited by law;
e.
In areas covered by small-scale miners as defined by law unless with
prior consent of the small-scale miners, in which case a royalty
payment upon the utilization of minerals shall be agreed upon by the
parties, said royalty forming a trust fund for the socioeconomic
development of the community concerned; and
f.
Old growth or virgin forests, proclaimed watershed forest reserves,
wilderness areas, mangrove forests, mossy forests, national parks
provincial/municipal forests, parks, greenbelts, game refuge and bird
sanctuaries as defined by law and in areas expressly prohibited under
the National Integrated Protected Areas System (NIPAS) under Republic
Act No. 7586, Department Administrative Order No. 25, series of 1992
and other laws.
CHAPTER IV
EXPLORATION PERMIT
Section 20
Exploration Permit
An
exploration permit grants the right to conduct exploration for all
minerals in specified areas. The Bureau shall have the authority to
grant an exploration Permit to a qualified person.
Section 21
Terms and Conditions of the Exploration Permit
An
exploration permit shall be for a period of two (2) years, subject to
annual review and relinquishment or renewal upon the recommendation
of the Director.
Section 22
Maximum Areas for Exploration Permit
The
maximum area that a qualified person may hold at any one time shall
be:
a. Onshore, in any one province
1.
for individuals, twenty (20) blocks: and
b.
for partnerships, corporations, cooperatives, or associations, two
hundred (200) blocks.
b.
Onshore, in the entire Philippines
1.
for individuals, forty (40) blocks; and
2.
for partnerships, corporations, cooperatives, or associations, four
hundred (400) blocks.
c.
Offshore, beyond five hundred meters (500m) from the mean low tide
level:
1.
for individuals, one hundred (100) blocks; and
2.
for partnerships, corporations, cooperatives, or associations, one
thousand (1,000) blocks.
Section 23
Rights and Obligations of the Permittee
An
exploration permit shall grant to the permittee, his heirs or
successors-in-interest, the right to enter, occupy and explore the
area: Provided, That if private or other parties are affected, the
permittee shall first discuss with the said parties the extent,
necessity, and manner of his entry, occupation and exploration and in
case of disagreement, a panel of arbitrators shall resolve the
conflict or disagreement.
The permittee shall undertake an exploration work on the area as specified by its permit based on an approved work program.
Any expenditure in excess of the yearly budget of the approved work program may be carried forward and credited to the succeeding years covering the duration of the permit. The Secretary, through the Director, shall promulgate rules and regulations governing the terms and conditions of the permit.
The
permittee may apply for a mineral production sharing agreement, joint
venture agreement, co-production agreement or financial or technical
assistance agreement over the permit area, which application shall be
granted if the permittee meets the necessary qualifications and the
terms and conditions of any such agreement: Provided, That the
exploration period covered by the exploration permit shall be
included as part of the exploration period of the mineral agreement
or financial or technical assistance agreement.
Section 24
Declaration of Mining Project Feasibility
A
holder of an exploration permit who determines the commercial
viability of a project covering a mining area may, within the term of
the permit, file with the Bureau a declaration of mining project
feasibility accompanied by a work program for development. The
approval of the mining project feasibility and compliance with other
requirements provided in this Act shall entitle the holder to an
exclusive right to a mineral production sharing agreement or other
mineral agreements or financial or technical assistance agreement.
Section 25
Transfer or Assignment
An
exploration permit may be transferred or assigned to a qualified
person subject to the approval of the Secretary upon the
recommendation of the Director.
CHAPTER V
MINERAL AGREEMENTS
Section 26
Modes of Mineral Agreement
For
purposes of mining operations, a mineral agreement may take the
following forms as herein defined:
a.
Mineral production sharing agreement is an agreement where the
Government grants to the contractor the exclusive right to conduct
mining operations within a contract area and shares in the gross
output. The contractor shall provide the financing, technology,
management and personnel necessary for the implementation of this
agreement.
b.
Co-production agreement is an agreement between the Government and
the contractor wherein the Government shall provide inputs to the
mining operations other than the mineral resource.
c.
Joint venture agreement is an agreement where a joint-venture company
is organized by the Government and the contractor with both parties
having equity shares. Aside from earnings in equity, the Government
shall be entitled to a share in the gross output.
A mineral agreement shall grant to the contractor the exclusive right to conduct mining operations and to extract all mineral resources found in the contract area. In addition, the contractor may be allowed to convert his agreement into any of the modes of mineral agreements or financial or technical assistance agreement covering the remaining period of the original agreement subject to the approval of the Secretary.
Section 27
Eligibility
A
qualified person may enter into any of the three (3) modes of mineral
agreement with the government for the exploration, development and
utilization of mineral resources: Provided, That in case the
applicant has been in the mining industry for any length of time, he
should possess a satisfactory environmental track record as
determined by the Mines and Geosciences Bureau and in consultation
with the Environmental Management Bureau of the Department.
Section 28
Maximum Areas for Mineral Agreement
The
maximum area that a qualified person may hold at any time under a
mineral agreement shall be:
a. Onshore, in any one province
1.
for individuals, ten (10) blocks; and
2.
for partnerships, cooperatives, associations, or corporations, one
hundred (100) blocks.
b.
Onshore, in the entire Philippines
1.
for individuals, twenty (20) blocks; and
2.
for partnerships, cooperatives, associations, or corporations, two
hundred (200) blocks.
c.
Offshore, in the entire Philippines
1.
for individuals fifty (50) blocks;
2.
for partnerships, cooperatives, associations, or corporations, five
hundred (500) blocks; and
3.
for the exclusive economic zone, a larger area to be determined by
the Secretary.
The maximum areas mentioned above that a contractor may hold under a mineral agreement shall not include mining/quarry areas under operating agreements between the contractor and a claimowner/lessee/permittee/licensee entered into under Presidential Decree No. 463.
Section 29
Filing and Approval of Mineral Agreements
All
proposed mineral agreements shall be filed in the region where the
areas of interest are located, except in mineral reservations which
shall be filed with the Bureau.
The
filing of a proposal for a mineral agreement shall give the proponent
the prior right to areas covered by the same. The proposed mineral
agreement will be approved by the Secretary and copies thereof shall
be submitted to the President. Thereafter, the President shall
provide a list to Congress of every approved mineral agreement within
thirty (30) days from its approval by the Secretary.
Section 30
Assignment/Transfer
Any
assignment or transfer of rights and obligations under any mineral
agreement except a financial or technical assistance agreement shall
be subject to the prior approval of the Secretary. Such assignment or
transfer shall be deemed automatically approved if not acted upon by
the Secretary within thirty (30) working days from official receipt
thereof, unless patently unconstitutional or illegal.
Section 31
Withdrawal from Mineral Agreements
The
contractor may, by giving due notice at any time during the term of
the agreement, apply for the cancellation of the mineral agreement
due to causes which, in the opinion of the contractor, make continued
mining operations no longer feasible or viable. The Secretary shall
consider the notice and issue its decision within a period of thirty
(30) days: Provided, That the contractor has met all its financial,
fiscal and legal obligations.
Section 32
Terms
Mineral
agreements shall have a term not exceeding twenty-five (25) years to
start from the date of execution thereof, and renewable for another
term not exceeding twenty-five (25) years under the same terms and
conditions thereof, without prejudice to changes mutually agreed upon
by the parties. After the renewal period, the operation of the mine
may be undertaken by the Government or through a contractor. The
contract for the operation of a mine shall be awarded to the highest
bidder in a public bidding after due publication of the notice
thereof: Provided, That the contractor shall have the right to equal
the highest bid upon reimbursement of all reasonable expenses of the
highest bidder.
CHAPTER VI
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT
Section 33
Eligibility
Any
qualified person with technical and financial capability to undertake
large-scale exploration, development, and utilization of mineral
resources in the Philippines may enter into a financial or technical
assistance agreement directly with the Government through the
Department.
Section 34
Maximum Contract Area
The
maximum contract area that may be granted per qualified person,
subject to relinquishment shall be:
a.
1,000 meridional blocks onshore;
b.
4,000 meridional blocks offshore; or
c.
Combinations of a and b provided that it shall not exceed the maximum
limits for onshore and offshore areas.
Section 35
Terms and Conditions
The
following terms, conditions, and warranties shall be incorporated in
the financial or technical assistance agreement, to wit:
a.
A firm commitment in the form of a sworn statement, of an amount
corresponding to the expenditure obligation that will be invested in
the contract area: Provided, That such amount shall be subject to
changes as may be provided for in the rules and regulations of this
Act;
b.
A financial guarantee bond shall be posted in favor of the Government
in an amount equivalent to the expenditure obligation of the
applicant for any year;
c.
Submission of proof of technical competence, such as, but not limited
to, its track record in mineral resource exploration, development,
and utilization; details of technology to be employed in the proposed
operation; and details of technical personnel to undertake the
operation;
d.
Representations and warranties that the applicant has all the
qualifications and none of the disqualifications for entering into
the agreement;
e.
Representations and warranties that the contractor has or has access
to all the financing, managerial and technical expertise and, if
circumstances demand, the technology required to promptly and
effectively carry out the objectives of the agreement with the
understanding to timely deploy these resources under its supervision
pursuant to the periodic work programs and related budgets, when
proper, providing an exploration period up to two (2) years,
extendible for another two (2) years but subject to annual review by
the Secretary in accordance with the implementing rules and
regulations of this Act, and further, subject to the relinquishment
obligations;
f.
Representations and warranties that, except for payments for
dispositions for its equity, foreign investments in local enterprises
which are qualified for repatriation, and local supplier’s
credits and such other generally accepted and permissible financial
schemes for raising funds for valid business purposes, 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 area;
g.
The mining operations shall be conducted in accordance with the
provisions of this Act and its implementing rules and regulations;
h. Work programs
and minimum expenditures commitments;
i.
Preferential use of local goods and services to the maximum extent
practicable;
j.
A stipulation that the contractors are obligated to give preference
to Filipinos in all types of mining employment for which they are
qualified and that technology shall be transferred to the same;
k. Requiring the
proponent to effectively use appropriate anti-pollution technology
and facilities to protect the environment and to restore or
rehabilitate mined out areas and other areas affected by mine
tailings and other forms of pollution or destruction;
l. The
contractors shall furnish the Government records of geologic,
accounting, and other relevant data for its mining operations, and
that book of accounts and records shall be open for inspection by the
government;
m.
Requiring the proponent to dispose of the minerals and byproducts
produced under a financial or technical assistance agreement at the
highest price and more advantageous terms and conditions as provided
for under the rules and regulations of this Act;
n.
Provide for consultation and arbitration with respect to the
interpretation and implementation of the terms and conditions of the
agreements; and
o.
Such other terms and conditions consistent with the Constitution and
with this Act as the Secretary may deem to be for the best interest
of the State and the welfare of the Filipino people.
Section 36
Negotiations
A
financial or technical assistance agreement shall be negotiated by
the Department and executed and approved by the President. The
President shall notify Congress of all financial or technical
assistance agreements within thirty (30) days from execution and
approval thereof.
Section 37
Filing and Evaluation of Financial or Technical Assistance Agreement Proposals
All
financial or technical assistance agreement proposals shall be filed
with the Bureau after payment of the required processing fees. If the
proposal is found to be sufficient and meritorious in form and
substance after evaluation, it shall be recorded with the appropriate
government agency to give the proponent the prior right to the area
covered by such proposal: Provided, That existing mineral agreements,
financial or technical assistance agreements and other mining rights
are not impaired or prejudiced thereby. The Secretary shall recommend
its approval to the President.
Section 38
Term of Financial
or Technical Assistance Agreement
A
financial or technical assistance agreement shall have a term not
exceeding twenty-five (25) years to start from the execution thereof,
renewable for not more than twenty-five (25) years under such terms
and conditions as may be provided by law.
Section 39
Option to Convert into a Mineral Agreement
The
contractor has the option to convert the financial or technical
assistance agreement to a mineral agreement at any time during the
term of the agreement, if the economic viability of the contract area
is found to be inadequate to justify large-scale mining operations,
after proper notice to the Secretary as provided for under the
implementing rules and regulations: Provided, That the mineral
agreement shall only be for the remaining period of the original
agreement.
In the case of a foreign contractor, it shall reduce its equity to forty percent (40%) in the corporation, partnership, association, or cooperative. Upon compliance with this requirement by the contractor, the Secretary shall approve the conversion and execute the mineral production-sharing agreement.
Section 40
Assignment/Transfer
A
financial or technical assistance agreement may be assigned or
transferred, in whole or in part, to a qualified person subject to
the prior approval of the President: Provided, That the President
shall notify Congress of every financial or technical assistance
agreement assigned or converted in accordance with this provision
within thirty (30) days from the date of the approval thereof.
Section 41
Withdrawal from Financial
or Technical Assistance Agreement
The
contractor shall manifest in writing to the Secretary his intention
to withdraw from the agreement, if in his judgment the mining project
is no longer economically feasible, even after he has exerted
reasonable diligence to remedy the cause or the situation. The
Secretary may accept the withdrawal: Provided, That the contractor
has complied or satisfied all his financial, fiscal or legal
obligations.
CHAPTER VII
SMALL-SCALE MINING
Section 42
Small-scale Mining
Small-scale
mining shall continue to be governed by Republic Act No. 7076 and
other pertinent laws.
CHAPTER VIII
QUARRY RESOURCES
Section 43
Quarry Permit
Any
qualified person may apply to the provincial/city mining regulatory
board for a quarry permit on privately-owned lands and/or public
lands for building and construction materials such as marble, basalt,
andesite, conglomerate, tuff, adobe, granite, gabbro, serpentine,
inset filling materials, clay for ceramic tiles and building bricks,
pumice, perlite and other similar materials that are extracted by
quarrying from the ground. The provincial governor shall grant the
permit after the applicant has complied with all the requirements as
prescribed by the rules and regulations.
The maximum area which a qualified person may hold at any one time shall be five hectares (5 has.): Provided, That in large-scale quarry operations involving cement raw materials, marble, granite, sand and gravel and construction aggregates, a qualified person and the government may enter into a mineral agreement as defined herein.
A quarry permit shall have a term of five (5) years, renewable for like periods but not to exceed a total term of twenty-five (25) years. No quarry permit shall be issued or granted on any area covered by a mineral agreement or financial or technical assistance agreement.
Section 44
Quarry Fee and Taxes
A
permittee shall, during the term of his permit, pay a quarry fee as
provided for under the implementing rules and regulations. The
permittee shall also pay the excise tax as provided by pertinent
laws.
Section 45
Cancellation of Quarry Permit
A
quarry permit may be cancelled by the provincial governor for
violations of the provisions of this Act or its implementing rules
and regulations or the terms and conditions of said permit: Provided,
That before the cancellation of such permit, the holder thereof shall
be given the opportunity to be heard in an investigation conducted
for the purpose.
Section 46
Commercial Sand and Gravel Permit
Any
qualified person may be granted a permit by the provincial governor
to extract and remove sand and gravel or other loose or
unconsolidated materials which are used in their natural state,
without undergoing processing from an area of not more than five
hectares (5 has.) and in such quantities as may be specified in the
permit.
Section 47
Industrial Sand and Gravel Permit
Any
qualified person may be granted an industrial sand and gravel permit
by the Bureau for the extraction of sand and gravel and other loose
or unconsolidated materials that necessitate the use of mechanical
processing covering an area of more than five hectares (5 has.) at
any one time. The permit shall have a term of five (5) years,
renewable for a like period but not to exceed a total term of
twenty-five (25) years.
Section 48
Exclusive Sand and Gravel Permit
Any
qualified person may be granted an exclusive sand and gravel permit
by the provincial governor to quarry and utilize sand and gravel or
other loose or unconsolidated materials from public lands for his own
use, provided that there will be no commercial disposition thereof.
A mineral agreement or a financial technical assistance agreement contractor shall, however, have the right to extract and remove sand and gravel and other loose unconsolidated materials without need of a permit within the area covered by the mining agreement for the exclusive use in the mining operations: Provided, That monthly reports of the quantity of materials extracted therefrom shall be submitted to the mines regional office concerned: Provided, further, That said right shall be coterminous with the expiration of the agreement.
Holders of existing mining leases shall likewise have the same rights as that of a contractor: Provided, That said right shall be coterminous with the expiry dates of the lease.
Section 49
Government Gratuitous Permit
Any
government entity or instrumentality may be granted a gratuitous
permit by the provincial governor to extract sand and gravel, quarry
or loose unconsolidated materials needed in the construction of
building and/or infrastructure for public use or other purposes over
an area of not more than two hectares (2 has.) for a period
coterminous with said construction.
Section 50
Private Gratuitous Permit
Any
owner of land may be granted a private gratuitous permit by the
provincial governor.
Section 51
Guano Permit
Any
qualified person may be granted a guano permit by the provincial
governor to extract and utilize loose unconsolidated guano and other
organic fertilizer materials in any portion of a municipality where
he has established domicile. The permit shall be for specific caves
and/or for confined sites with locations verified by the Department’s
field officer in accordance with existing rules and regulations.
Section 52
Gemstone Gathering Permit
Any
qualified person may be granted a non-exclusive gemstone gathering
permit by the provincial governor to gather loose stones useful as
gemstones in rivers and other locations.
CHAPTER IX
TRANSPORT, SALE AND PROCESSING OF MINERALS
Section 53
Ore Transport Permit
A
permit specifying the origin and quantity of non-processed mineral
ores or minerals shall be required for their transport. Transport
permits shall be issued by the mines regional director who has
jurisdiction over the area where the ores were extracted. In the case
of mineral ores or minerals being transported from the small-scale
mining areas to the custom mills or processing plants, the Provincial
Mining Regulatory Board (PMRB) concerned shall formulate their own
policies to govern such transport of ores produced by small-scale
miners. The absence of a permit shall be considered as prima
facie evidence of illegal mining and shall be sufficient cause
for the Government to confiscate the ores or minerals being
transported, the tools and equipment utilized, and the vehicle
containing the same. Ore samples not exceeding two metric tons (2
m.t.) to be used exclusively for assay or pilot test purposes shall
be exempted from such requirement.
Section 54
Mineral Trading Registration
No
person shall engage in the trading of mineral products, either
locally or internationally, unless registered with the Department of
Trade and Industry and accredited by the Department, with a copy of
said registration submitted to the Bureau.
Section 55
Minerals Processing Permit
No
person shall engage in the processing of minerals without first
securing a minerals processing permit from the Secretary. Minerals
processing permit shall be for a period of five (5) years renewable
for like periods but not to exceed a total term of twenty-five (25)
years. In the case of mineral ores or minerals produced by the
small-scale miners, the processing thereof as well as the licensing
of their custom mills, or processing plants shall continue to be
governed by the provisions of Republic Act No. 7076.
Section 56
Eligibility of Foreign-owned/-controlled Corporation
A
foreign-owned/-controlled corporation may be granted a mineral
processing permit.
CHAPTER X
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
Section 57
Expenditure for Community Development
and Science and Mining Technology
A
contractor shall assist in the development of its mining community,
the promotion of the general welfare of its inhabitants, and the
development of science and mining technology.
Section 58
Credited Activities
Activities
that may be credited as expenditures for development of mining
communities, and science and mining technology are the following:
a.
Any activity or expenditure intended to enhance the development of
the mining and neighboring communities of a mining operation other
than those required or provided for under existing laws, or
collective bargaining agreements, and the like; and
b. Any activity
or expenditure directed towards the development of geosciences and
mining technology such as, but not limited to, institutional and
manpower development, and basic and applied researches. Appropriate
supervision and control mechanisms shall be prescribed in the
implementing rules and regulations of this Act.
Section 59
Training and Development
A
contractor shall maintain an effective program of manpower training
and development throughout the term of the mineral agreement and
shall encourage and train Filipinos to participate in all aspects of
the mining operations, including the management thereof. For
highly-technical and specialized mining operations, the contractor
may, subject to the necessary government clearances, employ qualified
foreigners.
Section 60
Use of Indigenous Goods, Services and Technologies
A
contractor shall give preference to the use of local goods, services
and scientific and technical resources in the mining operations,
where the same are of equivalent quality, and are available on
equivalent terms as their imported counterparts.
Section 61
Donations/Turn Over of Facilities
Prior
to cessation of mining operations occasioned by abandonment or
withdrawal of operations, on public lands by the contractor, the
latter shall have a period of one (1) year therefrom within which to
remove his improvements; otherwise, all the social infrastructure and
facilities shall be turned over or donated tax-free to the proper
government authorities, national or local, to ensure that said
infrastructure and facilities are continuously maintained and
utilized by the host and neighboring communities.
Section 62
Employment of Filipinos
A
contractor shall give preference to Filipino citizens in all types of
mining employment within the country insofar as such citizens are
qualified to perform the corresponding work with reasonable
efficiency and without hazard to the safety of the operations. The
contractor, however, shall not be hindered from hiring employees of
his own selection, subject to the provisions of Commonwealth Act No.
613, as amended, for technical and specialized work which, in his
judgment and with the approval of the Director, requires
highly-specialized training or long experience in exploration,
development or utilization of mineral resources: Provided, That in no
case shall each employment exceed five (5) years or the payback
period as represented in original project study, whichever is longer:
Provided, further, That each foreigner employed as mine manager,
vice-president for operations or in an equivalent managerial position
in charge of mining, milling, quarrying or drilling operation shall:
a.
Present evidence of his qualification and work experience; or
b. Shall pass the
appropriate government licensure examination; or
c.
In special cases, may be permitted to work by the Director for a
period not exceeding one (1) year: Provided, however, That if
reciprocal privileges are extended to Filipino nationals in the
country of domicile, the Director may grant waivers or exemptions.
CHAPTER XI
SAFETY AND ENVIRONMENTAL PROTECTION
Section 63
Mines Safety and Environmental Protection
All
contractors and permittees shall strictly comply with all the mines
safety rules and regulations as may be promulgated by the Secretary
concerning the safe and sanitary upkeep of the mining operations and
achieve waste-free and efficient mine development. Personnel of the
Department involved in the implementation of mines safety, health and
environmental rules and regulations shall be covered under Republic
Act No. 7305.
Section 64
Mine Labor
No
person under sixteen (16) years of age shall be employed in any phase
of mining operations and no person under eighteen (18) years of age
shall be employed underground in a mine.
Section 65
Mine Supervision
All
mining and quarrying operations that employ more than fifty (50)
workers shall have at least one (1) licensed mining engineer with at
least five (5) years of experience in mining operations, and one (1)
registered foreman.
Section 66
Mine Inspection
The
regional director shall have exclusive jurisdiction over the safety
inspection of all installations, surface or underground, in mining
operations at reasonable hours of the day or night and as much as
possible in a manner that will not impede or obstruct work in
progress of a contractor or permittee.
Section 67
Power to Issue Orders
The
mines regional director shall, in consultation with the Environmental
Management Bureau, forthwith or within such time as specified in his
order, require the contractor to remedy any practice connected with
mining or quarrying operations, which is not in accordance with
safety and anti-pollution laws and regulations. In case of imminent
danger to life or property, the mines regional director may summarily
suspend the mining or quarrying operations until the danger is
removed, or appropriate measures are taken by the contractor or
permittee.
Section 68
Report of Accidents
In
case of any incident or accident, causing or creating the danger of
loss of life or serious physical injuries, the person in charge of
operations shall immediately report the same to the regional office
where the operations are situated. Failure to report the same without
justifiable reason shall be a cause for the imposition of
administrative sanctions prescribed in the rules and regulations
implementing this Act.
Section 69
Environmental Protection
Every
contractor shall undertake an environmental protection and
enhancement program covering the period of the mineral agreement or
permit. Such environmental program shall be incorporated in the work
program which the contractor or permittee shall submit as an
accompanying document to the application for a mineral agreement or
permit. The work program shall include not only plans relative to
mining operations but also to rehabilitation, regeneration,
revegetation and reforestation of mineralized areas, slope
stabilization of mined-out and tailings covered areas, aquaculture,
watershed development and water conservation; and socioeconomic
development.
Section 70
Environmental Impact Assessment (EIA)
Except
during the exploration period of a mineral agreement or financial or
technical assistance agreement or an exploration permit, an
environmental clearance certificate shall be required based on an
environmental impact assessment and procedures under the Philippine
Environmental Impact Assessment System including Sections 26 and 27
of the Local Government Code of 1991 which require national
government agencies to maintain ecological balance, and prior
consultation with the local government units, non-governmental and
people’s organizations and other concerned sectors of the
community: Provided, That a completed ecological profile of the
proposed mining area shall also constitute part of the environmental
impact assessment. People’s organizations and non-governmental
organizations shall be allowed and encouraged to participate in
ensuring that contractors/permittees shall observe all the
requirements of environmental protection.
Section 71
Rehabilitation
Contractors
and permittees shall technically and biologically rehabilitate the
excavated, mined-out, tailings covered and disturbed areas to the
condition of environmental safety, as may be provided in the
implementing rules and regulations of this Act. A mine rehabilitation
fund shall be created, based on the contractor’s approved work
program, and shall be deposited as a trust fund in a government
depository bank and used for physical and social rehabilitation of
areas and communities affected by mining activities and for research
on the social, technical and preventive aspects of rehabilitation.
Failure to fulfill the above obligation shall mean immediate
suspension or closure of the mining activities of the
contractor/permittee concerned.
CHAPTER XII
AUXILIARY MINING RIGHTS
Section 72
Timber Rights
Any
provision of law to the contrary notwithstanding, a contractor may be
granted a right to cut trees or timber within his mining area as may
be necessary for his mining operations subject to forestry laws,
rules and regulations: Provided, That if the land covered by the
mining area is already covered by existing timber concessions, the
volume of timber needed and the manner of cutting and removal thereof
shall be determined by the mines regional director, upon consultation
with the contractor, the timber concessionaire/permittee and the
Forest Management Bureau of the Department: Provided, further, That
in case of disagreement between the contractor and the timber
concessionaire, the matter shall be submitted to the Secretary whose
decision shall be final. The contractor shall perform reforestation
work within his mining area in accordance with forestry laws, rules
and regulations.
Section 73
Water Rights
A
contractor shall have water rights for mining operations upon
approval of application with the appropriate government agency in
accordance with existing water laws, rules and regulations
promulgated thereunder: Provided, That water rights already granted
or vested through long use, recognized and acknowledged by local
customs, laws, and decisions of courts shall not thereby be impaired:
Provided, further, That the Government reserves the right to regulate
water rights and the reasonable and equitable distribution of water
supply so as to prevent the monopoly of the use thereof.
Section 74
Right to Possess Explosives
A
contractor/exploration permittee shall have the right to possess and
use explosives within his contract/permit area as may be necessary
for his mining operations upon approval of application with the
appropriate government agency in accordance with existing laws, rules
and regulations promulgated thereunder: Provided, That the Government
reserves the right to regulate and control the explosive accessories
to ensure safe mining operations.
Section 75
Easement Rights
When
mining areas are so situated that for purposes of more convenient
mining operations it is necessary to build, construct or install on
the mining areas or lands owned, occupied or leased by other persons,
such infrastructure as roads, railroads, mills, waste dump sites,
tailings ponds, warehouses, staging or storage areas and port
facilities, tramways, runways, airports, electric transmission,
telephone or telegraph lines, dams and their normal flood and
catchment areas, sites for water wells, ditches, canals, new river
beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the
contractor, upon payment of just compensation, shall be entitled to
enter and occupy said mining areas or lands.
Section 76
Entry into Private Lands and Concession Areas
Subject
to prior notification, holders of mining rights shall not be
prevented from entry into private lands and concession areas by
surface owners, occupants, or concessionaires when conducting mining
operations therein: Provided, That any damage done to the property of
the surface owner, occupant, or concessionaire as a consequence of
such operations shall be properly compensated as may be provided for
in the implementing rules and regulations: Provided, further, That to
guarantee such compensation, the person authorized to conduct mining
operation shall, prior thereto, post a bond with the regional
director based on the type of properties, the prevailing prices in
and around the area where the mining operations are to be conducted,
with surety or sureties satisfactory to the regional director.
CHAPTER XIII
SETTLEMENT OF CONFLICTS
Section 77
Panel of Arbitrators
There
shall be a panel of arbitrators in the regional office of the
Department composed of three (3) members, two (2) of whom must be
members of the Philippine Bar in good standing and one a licensed
mining engineer or a professional in a related field, and duly
designated by the Secretary as recommended by the Mines and
Geosciences Bureau Director. Those designated as members of the panel
shall serve as such in addition to their work in the Department
without receiving any additional compensation As much as practicable,
said members shall come from the different bureaus of the Department
in the region. The presiding officer thereof shall be selected by the
drawing of lots. His tenure as presiding officer shall be on a yearly
basis. The members of the panel shall perform their duties and
obligations in hearing and deciding cases until their designation is
withdrawn or revoked by the Secretary. Within thirty (30) working
days, after the submission of the case by the parties for decision,
the panel shall have exclusive and original jurisdiction to hear and
decide on the following:
a.
Disputes involving rights to mining areas;
b.
Disputes involving mineral agreements or permits;
c.
Disputes involving surface owners, occupants and
claimholders/concessionaires; and
d. Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.
Section 78
Appellate Jurisdiction
The
decision or order of the panel of arbitrators may be appealed by the
party not satisfied thereto to the Mines Adjudication Board within
fifteen (15) days from receipt thereof which must decide the case
within thirty (30) days from submission thereof for decision.
Section 79
Mines Adjudication Board
The
Mines Adjudication Board shall be composed of three (3) members. The
Secretary shall be the chairman with the Director of the Mines and
Geosciences Bureau and the Undersecretary for Operations of the
Department as members thereof. The Board shall have the following
powers and functions:
a.
To promulgate rules and regulations governing the hearing and
disposition of cases before it, as well as those pertaining to its
internal functions, and such rules and regulations as may be
necessary to carry out its functions;
b.
To administer oaths, summon the parties to a controversy, issue
subpoenas requiring the attendance and testimony of witnesses or the
production of such books, papers, contracts, records, statement of
accounts, agreements, and other documents as may be material to a
just determination of the matter under investigation, and to testify
in any investigation or hearing conducted in pursuance of this Act;
c. To conduct
hearings on all matters within its jurisdiction, proceed to hear and
determine the disputes in the absence of any party thereto who has
been summoned or served with notice to appear, conduct its
proceedings or any part thereof in public or in private, adjourn its
hearings at any time and place, refer technical matters or accounts
to an expert and to accept his report as evidence after hearing of
the parties upon due notice, direct parties to be joined in or
excluded from the proceedings, correct, amend, or waive any error,
defect or irregularity, whether in substance or in form, give all
such directions as it may deem necessary or expedient in the
determination of the dispute before it, and dismiss the mining
dispute as part thereof, where it is trivial or where further
proceedings by the Board are not necessary or desirable:
1.
To hold any person in contempt, directly or indirectly, and impose
appropriate penalties therefor; and
2.
To enjoin any or all acts involving or arising from any case pending
before it which, if not restrained forthwith, may cause grave or
irreparable damage to any of the parties to the case or seriously
affect social and economic stability.
In any proceeding before the Board, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Act that shall govern. The Board shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Board, the parties may be represented by legal counsel. The findings of fact of the Board shall be conclusive and binding on the parties and its decision or order shall be final and executory.
A petition for review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.
CHAPTER XIV
GOVERNMENT SHARE
Section 80
Government Share
in Mineral Production Sharing Agreement
The
total government share in a mineral production sharing agreement
shall be the excise tax on mineral products as provided in Republic
Act No. 7729, amending Section 151(a) of the National Internal
Revenue Code, as amended.
Section 81
Government Share in Other Mineral Agreements
The
share of the Government in co-production and joint-venture agreements
shall be negotiated by the Government and the contractor taking into
consideration the:
a.
capital investment of the project;
b.
risks involved;
c.
contribution of the project to the economy; and
d.
other factors that will provide for a fair and equitable sharing
between the Government and the contractor.
The Government shall also be entitled to compensations for its other contributions which shall be agreed upon by the parties, and shall consist, among other things, the contractor’s income tax, excise tax, special allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national, and all such other taxes, duties and fees as provided for under existing laws.
The Government share in financial or technical assistance agreement shall consist of, among other things, the contractor’s corporate income tax, excise tax, special allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign national and all such other taxes, duties and fees as provided for under existing laws.
The
collection of Government share in financial or technical assistance
agreement shall commence after the financial or technical assistance
agreement contractor has fully recovered its pre-operating expenses,
exploration, and development expenditures, inclusive.
Section 82
Allocation of Government Share
The
Government share as referred to in the preceding sections shall be
shared and allocated in accordance with Sections 290 and 292 of
Republic Act No. 7160 otherwise known as the Local Government Code of
1991. In case the development and utilization of mineral resources is
undertaken by a government-owned or -controlled corporation, the
sharing and allocation shall be in accordance with Sections 291 and
292 of the said Code.
CHAPTER XV
TAXES AND FEES
Section 83
Income Taxes
After
the lapse of the income tax holiday as provided for in the Omnibus
Investments Code, the contractor shall be liable to pay income tax as
provided in the National Internal Revenue Code, as amended.
Section 84
Excise Tax on Mineral Products
The
contractor shall be liable to pay the excise tax on mineral products
as provided for under Section 151 of the National Internal Revenue
Code: Provided, however, That with respect to a mineral production
sharing agreement, the excise tax on mineral products shall be the
government share under said agreement.
Section 85
Mine Wastes and Tailings Fees
A
semi-annual fee to be known as mine wastes and tailings fee is hereby
imposed on all operating mining companies in accordance with the
implementing rules and regulations. The mine wastes and tailings fee
shall accrue to a reserve fund to be used exclusively for payment for
damages to:
a.
Lives and personal safety;
b.
Lands, agricultural crops and forest products, marine life and
aquatic resources, cultural resources; and
c.
Infrastructure and the revegetation and rehabilitation of silted farm
lands and other areas devoted to agriculture and fishing caused by
mining pollution.
This is in addition to the suspension or closure of the activities of the contractor at any time and the penal sanctions imposed upon the same.
The
Secretary is authorized to increase mine wastes and tailings fees,
when public interest so requires, upon the recommendation of the
Director.
Section 86
Occupation Fees
There
shall be collected from any holder of a mineral agreement, financial
or technical assistance agreement or exploration permit on public or
private lands, an annual occupation fee in accordance with the
following schedule:
a.
For exploration permit — Five pesos (P5.00) per hectare or
fraction thereof per annum;
b.
For mineral agreements and financial or technical assistance
agreements — Fifty pesos (P50.00) per hectare or fraction
thereof per annum; and
c.
For mineral reservation — One hundred pesos (P100.00) per
hectare or fraction thereof per annum.
The Secretary is authorized to increase the occupation fees provided herein when the public interest so requires, upon recommendation of the Bureau Director.
Section 87
Manner of Payment of Fees
The
fees shall be paid on the date the mining agreement is registered
with the appropriate office and on the same date every year
thereafter. It shall be paid to the treasurer of the municipality or
city where the onshore mining areas are located, or to the Director
in case of offshore mining areas. For this purpose, the appropriate
officer shall submit to the treasurer of the municipality or city
where the onshore mining area is located, a complete list of all
onshore mining rights registered with his office, indicating therein
the names of the holders, area in hectares, location, and date
registered. If the fee is not paid on the date specified, it shall be
increased by twenty-five per centum (25%).
Section 88
Allocation of Occupation Fees
Thirty
per centum (30%) of all occupational fees collected from
holders of mining rights in onshore mining areas shall accrue to the
province and seventy per centum (70%) to the municipality in
which the onshore mining areas are located. In a chartered city, the
full amount shall accrue to the city concerned.
Section 89
Filing Fees and Other Charges
The
Secretary is authorized to charge reasonable filing fees and other
charges as he may prescribe in accordance with the implementing rules
and regulations.
CHAPTER XVI
INCENTIVES
Section 90
Incentives
The
contractors in mineral agreements, and financial or technical
assistance agreements shall be entitled to the applicable fiscal and
non-fiscal incentives as provided for under Executive Order No. 226,
otherwise known as the Omnibus Investments Code of 1987. Provided,
That holders of exploration permits may register with the Board of
Investments and be entitled to the fiscal incentives granted under
the said Code for the duration of the permits or extensions thereof:
Provided, further, That mining activities shall always be included in
the investment priorities plan.
Section 91
Incentives for Pollution Control Devices
Pollution
control devices acquired, constructed or installed by contractors
shall not be considered as improvements on the land or building where
they are placed, and shall not be subject to real property and other
taxes or assessments: Provided, however, That payment of mine wastes
and tailings fees is not exempted.
Section 92
Income Tax-Carry Forward of Losses
A
net operating loss without the benefit of incentives incurred in any
of the first ten (10) years of operations may be carried over as a
deduction from taxable income for the next five (5) years immediately
following the year of such loss. The entire amount of the loss shall
be carried over to the first of the five (5) taxable years following
the loss, and any portion of such loss which exceeds the taxable
income of such first year shall be deducted in like manner from the
taxable income of the next remaining four (4) years.
Section 93
Income Tax-Accelerated Depreciation
Fixed
assets may be depreciated as follows:
a.
To the extent of not more than twice as fast as the normal rate of
depreciation or depreciated at normal rate of depreciation if the
expected life is ten (10) years or less; or
b.
Depreciated over any number of years between five (5) years and the
expected life if the latter is more than ten (10) years, and the
depreciation thereon allowed as deduction from taxable income:
Provided, That the contractor notifies the Bureau of Internal Revenue
at the beginning of the depreciation period which depreciation rate
allowed by this section will be used.
In computing for taxable income, unless otherwise provided in this Act, the contractor may, at his option, deduct exploration and development expenditures accumulated at cost as of the date of the prospecting or exploration and development expenditures paid or incurred during the taxable year: Provided, That the total amount deductible for exploration and development expenditures shall not exceed twenty-five per centum (25%) of the net income from mining operations. The actual exploration and development expenditures minus the twenty-five per centum (25%) net income from mining shall be carried forward to the succeeding years until fully deducted.
Net
income from mining operation is defined as gross income from
operations less allowable deductions which are necessary or related
to mining operations. Allowable deductions shall include mining,
milling and marketing expenses, depreciation of properties directly
used in the mining operations. This paragraph shall not apply to
expenditures for the acquisition or improvement of property of a
character which is subject to the allowances for depreciation.
Section 94
Investment Guarantees
The
contractor shall be entitled to the ba