ONO aS ON

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Republic of the Philippines
HOUSE OF REPRESENTATIVES Fee ee VED
Quezon City ine ata

SIXTEENTH CONGRESS
First Regular Session

House BiLLNo.__ 1173

Introduced by: HON. PHILIP A. PICHAY

EXPLANATORY NOTE

Over the last few years, metal prices have risen dramatically principally because of
the increasing demand for copper, gold, and nickel, among others. In 1998 copper,
gold and nickel prices were US$0.75 per Ib., US$ 295.00 per troy ounce and USS
2.10 per Ib., respectively. By 2010, copper was averaging USS 3.35 per Ib., gold USS
1,200.00 per troy ounce and nickel, USS 9.85 per Ib.

7988 2010 compounded Annual
Growth Rate(%)

Copper, USS/Ib. 0.75 3.35 13.23
Gold, USSftr.oz 295,00 1,200.00 12.35
Nickel, US§/b_ 2109.85 13.69

This tremendous growth rate have attracted to the mining industry not only many
foreign and local investors but also small-scale miners, mostly illegal.

In 2010, mining grew by 12% led by copper and gold which grew by 27% to US$ 1.87
billion from US$ 1.47 billion in 2009. Mining contributed 4.3% to our total exports, a
far ory from the 24% contribution it had in the 1970s. With metal prices surging,
however, mining is on its way to recovering lost ground and making significant
contributions to our Gross Domestic Product(GDP).

Last year, foreign investments reached US$ 956 million and could have easily
surpassed the USS 1 billion mark had it not been for excessive regulations, anti-
mining movements, and local Government interference in purely National
Government functions, Despite the mining industry's efforts to address problems
relating to the environment and community development, the efforts of some sectors
to bring down the industry continues,

Responsible mining channels foreign and domestic investments to the countryside,
providing access to a) employment and business opportunities, b) education, c)

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medical services d) skills training @) housing, f) infrastructure and g) public utilities
and generally improving the standard of living of poverty-sticken people, who in all
Probability, would never have the opportunity of improving their standard of living,
National and local taxes, fees and imposts are likewise paid to the Government,
thereby enhancing the delivery of basic public services.

Mining is a capital-intensive undertaking and a well-planned exploration and a welle
engineered and systematic development and utilization of our mineral reserves
require that the deficiencies and limitations of our existing laws be addressed.

A well-regulated mining industry is therefore needed to allow mining to substantially
increase its contribution to the national economy while protecting the environment at
the same time.

On the other hand the Mines and Geosciences Bureau(MGB) was originally
established as the Bureau of Mines on November 16, 1936 by Commonwealth Act
No. 136 and later amended under Presidential Decree No. 1281 on January 16,1978
and Executive Order No. 192 dated June 10,1987,

Under Executive Order No, 192, the powers and functions of the MGB were advisory
in nature and this has remained the same despite the conversion of the MGB from a
Staff bureau to a line bureau of the Department of Environment and Natural
Resources(DENR) under Republic Act No. 7942.

The same Executive Order creating the Department of Environment and Natural
Resources does not also provide for any professional or academic qualification
‘Standards for the Secretary and Assistant Secretary of the MGB.

There is therefore a need not only for a new mining law but for a Cabinet-level
Government agency that can serve as a potent and effective arm in the
administration and supervision of our mineral resources and which is responsive to
the needs of the Filipino people

In view thereof, passage of this bill is urgently sought,

iit

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HOUSE OF REPRESENTATIVES
‘Quezon City

‘SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.__ 1173

Introduced by: HON. PHILIP A. PICHAY.

THE MINING CODE OF THE PHILIPPINES

AN ACT CREATING THE DEPARTMENT OF MINES, INSTITUTING A REVISED
REGULATORY FRAMEWORK FOR THE PHILIPPINE MINING INDUSTRY,
REPEALING FOR THE PURPOSE REPUBLIC ACTS NUMBERED SEVEN
THOUSAND NINE HUNDRED FORTY TWO(R.A. NO. 7942, THE PHILIPPINE
MINING ACT OF 1995), REPUBLIC ACT NUMBERED SEVEN THOUSAND.
SEVENTY SIX(R.A. 7076, THE PEOPLE'S SMALL-SCALE MINING ACT OF 1991),
AND PRESIDENTIAL DECREE NO. 1281(PD 1281, REVISING COMMONWEALTH
ACT NO. 136, CREATING THE BUREAU OF MINES AND FOR OTHER
PURPOSES) AND AMENDING SECTION 15 OF EXECUTIVE ORDER NO.192(EO
192, PROVIDING FOR THE REORGANIZATION OF THE DEPARTMENT OF
ENVIRONMENT, ENERGY AND NATURAL RESOURCES, RENAMING IT AS.
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES AND FOR
OTHER PURPOSES AND SECTION 25 OF REPUBLIC ACT NUMBERED FOUR
THOUSAND TWO HUNDRED SEVENTY FOUR(RA 4274, THE MINING
ENGINEERING LAW OF THE PHILIPPINES) AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

CHAPTERI

GENERAL PROVISIONS

Section 1 . Short Title — This Act shall be known as the “Philippine Mining
Code of 2012"

Section 2 . Declaration of Policy — All mineral resources in public and
Private lands, including ancestral lands and domains, 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,
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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 protects the rights of affected
communities,

Section 3. Definition of Terms - As used in and for the purpose of this law,
the following terms, whether in the singular or plural, shall have the following
meanings
(@) “State” means Republic of the Philippines
(b) "President" means the President of the Republic of the Philippines
() “Government” means the Goverment of the Republic of the Philippines
() _“Secretary’ means the Secretary of the Department of Mines
(€) “Ancestral Domain” means areas covered by Certificate/s of Ancestral

Domain Title
() “Ancestral Land" means areas covered by Certificate/s of Ancestral Land Title
(9) “Block or Meridional Block” means an area bounded by one-half minute north

latitude and one-half minute east longitude containing an area of eigthy

one(81) hectares, more or less

(h) "Contiguous Zone" means water, sea bottom and substratum measured
twenty four(24) nautical miles(24 n.m.) seaward from the baseline of the
Philippine Archipelago

() “Contract Area” means land or body of water delineated for purposes of
exploration, development or utilization of the minerals found therein

@) — *Contractor’ means a qualified person acting alone or in a consortium who is
@ party to a mineral agreement or to a financial or technical assistance
agreement

(6) “Co-production agreement” means an agreement entered into between the
Government and one(1) or more Contractors in accordance with Chaper V,
Section 20 hereof

() ‘Department means the Department of Mines(DOM)

(m) "Development" means the work undertaken to prepare an orebody or a
mineral deposit for mining including the construction of necessary
infrastructure and related facilities

(") “Environmental Compliance Certificate(ECC)" means a document issued by
the Government certifying that a mining project has complied with the
requirements of the environmental impact statement system

(0) “Environmental Impact Statement(ElS)’ means a document which aims to

‘identify, predict, interpret, and communicate information regarding changes in
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environmental quality associated with a mining project and which examines
the range of alternatives for the objectives of a mining project and their impact
on the environment

“Exclusive Economic Zone(EEZ)" means the water, sea bottom and
Subsurface measured from the baseline of the Philippine Archipelago up to
two hundred(200) nautical miles(200 n.m.) offshore

“Existing Mining/Quarrying Right” means a valid and subsisting mining claim
oF permit or quarry permit or any mining lease contract or agreement covering
@ mineralized area granted/issued under pertinent mining laws

“Exploration” means the search for mineral deposits 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

“Financial or Technical Assistance Agreement(FTAA)" means a contract
involving financial or technical assistance for large-scale exploration,
development and utilization of mineral deposits

“Force Majeure” means acts or circumstances beyond the reasonable control
of the 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 the National and/or Local Govemment or by any instrumentality of
Subdivision thereof, Acts of God, or any public enemy and any cause over
which the affected party has no reasonable control

“Foreign-Owned Corporation” means any corporation duly registered with the
Securities and Exchange Commission of the Philippines in which more than
forty percent(40%) of the capital is owned by foreigners.

“Government” means the Government of the Republic of the Philippines
“Gross Output" means the market value of minerals or mineral products
extracted from any mineral deposit

“Indigenous Cultural Community(|CC)" means a group or tribe of indigenous
People officially recognized as such by the National Commission on
Indigenous Peoples

“Joint Venture Agreement(JV) means an agreement entered into between the
Government and one(1) or more Contractors in accordance with Chapter V,
Section 20 hereof

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“Minerals* mean all naturally occuring inorganic substances in solid, liquid, or
any intermediate state including sand and gravel. Coal, petroleum,
geothermal energy and natural gas are excluded from this term

“Mineral Agreement’ means a contract between the Government and a
Contractor involving mineral production sharing agreementMPSA), co-
production agreement(CPA) or joint venture agreement(JVA)

“Mineral Deposit” mean a natural deposit or accumulation of minerals

“Mineral Lands" mean those lands in which minerals exist in sufficient quantity
and grade to justify the necessary expenditures to develop and extract said
minerals

“Mining” means to extract minerals and includes all operations necessary for
that purpose such as milling, beneficiation and upgrading of ore, rocks or
minerals

“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 contiguos zone

“Onshore” means the landward side from the mean tide elevation including
submerged lands in lakes, rivers and creeks

“Ore” means a naturally occurring substance or material which can be mined
and/or processed for a profit

“Permit” is a short-term privilege granted by the State to explore, develop and
utilize sand and gravel deposits

"Permittee" means the holder of any mining permit issued in accordance with
this law.

‘Private Land” means any land belonging to a private person covered by
original or transfer certificates of title and includes alienable and disposable
land 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

“Public Land” means lands of the public domain

“Qualified Person’ means a Filipino citizen , of legal age with capacity to
contract or corporations or partnerships registered with the Securities and
Exchange Commission(SEC) at least sity percent(60%) of the capital of
which is owned by Filipino citizens

“Quarry Resources” refers to any common rock or other mineral substances
as the Secretary may declare to be quarry resources such as, but not limited

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to, andesite, basalt, conglomerate, coral sand, diatomaceous earth, diorite,
decorative stones, gabbro, granite, limestone, marble, marl, red burning clays
for potteries and bricks, rhyolites, rock phospate, sandstone, serpentinte,
shale, tuff, volcanic cinders, kaolin, feldspar, bull quartz, quartz or silica, sand
and pebbles, bentonite, talc, asbestos, barite, magnesite, dolomite, mica,
Precious and semi-precious stones, and other non-metallic minerals.

"Regional Office" means any of the regional offices of the Department of
Mines

“Regulations” mean the rules and administrative orders promulgated by the
Secretary to implement the provisions of this Law

“Utilization” means the extraction or disposition of minerals. It is synonymous
to mining operations.

CHAPTER II
ORGANIZATION AND JURISDICTION

Section 4. Department of Min

There is hereby created a Department

of Mines, hereinafter referred to as the Department, which shall absorb the powers

and functions of the Mines and Geosciences Bureau.

Section 6 . Mandate - The Department shall be the primary Government

agency responsible for the conservation, management, development and proper use
of the country’s mineral resources as well as the licensing, permitting and regulation
thereof.

Section 6 . Powers and Functions — The Department of Mines shall have

the following powers and functions:

(@) Have jurisdiction and direct charge in the administration and
disposition of all mineral lands and mineral resources of the country
ensuring their effective protection, development and management:

(6) To grant mineral agreements or other mining permits to duly qualified
persons;

(©) To recommend to the President of the Philippines the approval of
financial or technical assistance agreements;

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Regulate and supervise the operations of all Contractors and
Permittees, including Mineral Processing Permit holders;

Formulate policies, regulations, and programs pertaining to the
mineral reserves and resources of the country, both onshore and
offshore;

Develop technical standards and safety and operating procedures for
mineral resources and reserves exploration, development, and
utilization, provided that such standards and procedures do not
conflict with the practice of Mining Engineering, Metallurgical
Engineering and Geology as provided for under the professional laws;

To issue subpoena and summon witnesses to appear in any
Proceedings pending before the Secretary of Mines, and in
appropriate cases, punish said witnesses for contempt, direct or
indirect, in accordance with pertinent provisions of the Rules of Court;

To impose fines and/or penalties for violation of the provisions of the
mining law or any other laws being implemented by the Department of
Mines, the rules and regulations promulgated hereunder, its orders,
decisions and rulings;

To confiscate surety, performance, and guaranty bonds posted with
the Department of Mines after due notice and hearing in an order to
be promulgated by the Secretary of Mines;

To deputize, when necessary, any member or unit of the Philippine
National Police for purposes of implementing the mining law

To require Contractors or Permittees as part of their mining activities
to keep in their office complete set of books of accounts showing all
receipts and expenditures, the source of such receipts, and the object
of such expenditures, and assign authorized representatives of the
Department of Mines to inspect such books of accounts:

To require Contractors or Permittees to submit to the Department of
Mines a semi-annual report verified under oath containing: an itemized
account or balance sheet for the previous semester, embracing a full

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and complete statement of all disbursements, and receipts, showing
from what sources such receipts were derived, and to whom and for
what object or purpose such disbursements or payments were made;
all indebtedness or

ities incurred, or existing at the time, and for
what the same were incurred, and the balance of money, if any, on
hand; a statement showing the number of men employed, and for
what purpose and the rate of wages paid to each; a full and complete
statement of the work done in said mine, and amount of ore extracted,
from what part of mine taken, the amount of ore extracted, from what
part of mine taken, the amount sent to mill for production, output of the
mill, and its assay value. Every Contractor or Permittee shall likewise
keep in its office, a full report, under oath, of all discoveries of ores
made in said mine, whether by boring, drifting, sinking, or otherwise
together with the assay value thereof. All discounts, reports, and
correspondence shall be filed with, and shall be subject to verification
by, the Secretary of Mines;

To conduct or undertake mining, metallurgical, geological, chemical,
and other researchers and prepare reports thereon; and to provide
laboratory and technical services to the general public;

To conduct geological and geophysical surveys of the Philippines and
its territorial waters, and to prepare reports and maps therefor;

To conduct other kinds of surveys of all mineralized areas, and
inventory of the mineral resources, of the Philippines and prepare
reports, boundary plans and maps therefor;

To disseminate information concerning the administration and
disposition of mineral lands, mining operations, utilization of minerals,
mineral economics, geological and other surveys, researches, and
such other activities through appropriate reports, bulletins and
circulars

To oversee the mining operations of Contractors/Permittees
particularly on mining practices and methods relating to protection of
life and property, economy of operations, prevention of pollution,
environmental protection and mineral conservation, and order the

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Suspension of any or all mining operations or closure of the mines, if
warranted;

(0) To require the Contractor/Permittee to take necessary measures to
Provide for the growth and development of any industry suitable for
the contract area, other than mining, in order that when the mine is
exhausted or becomes no longer profitable for mining purposes the
People residing therein or those who used to work for the mine will
have a substitute industry or business activity to provide for their
means of livelihood, and to place the mine in a condition suitable for
habitation or agriculture;

(P) To keep records of mining agreements and licenses, and all
documents and instrument related thereto;

() If warranted, to engage in mineral canvassing, exploration,
development, and mining of the mineral resources of the country,
whether found in mineral reservations, in registered mining claims, or
in private and/or public lands;

(8) To exercise complete management and control over areas embraced
by mineral reservations; and

() Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

CHAPTER Ill
THE DEPARTMENT PROPER

Section 7. Composition - The Department Proper shall be composed of the
Office of the Secretary, and the Offices of the UnderSecretaries and Assistant
‘Secretaries, and the Bureaus of the Department.

Section 8. Office of Secretary — The Office of the Secretary shall consist of
the Secretary and his immediate staff.

Section 9. The Secretary - The Secretary shall be appointed by the
President of the Philippines, ‘Subject to confirmation by the Commission on

‘Appointments.

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No officer, extemal auditor, accountant, or legal counsel of any private company or
enterprise primarily engaged in mining and quarrying shall be eligible for appointment
as Secretary within two(2) years from his retirement, resignation or separation
therefrom.

The Secretary shall have the following powers and functions, in addition to those
provided for under Section 7, Chapter 2, Book IV of Executive Order No. 292 dated
July 25,1987 or the Administrative Code of 1987:

(a) Establish policies and standards for the effective, efficient and
economical operation of the Department in accordance with the
programs of the Government;

() Exercise direct supervision and control over all functions and activities
of the Department, as well as its officers and personnel;

(©) Devise a program of international information on the technological and
contractual conditions of the mining industry;

(4) Create regional offices and such other service units and divisions as
may be necessary;

(e) Perform such other functions as may be necessary or proper to attain
the objectives of this law.

Section 10. The UnderSecretaries - The Secretary shall be assisted by
three(3) UnderSecretaries, one(1) for operations, one(1) for policy and programs and
‘one(1) for administrative services. They shall all be appointed by the President of the
Philippines upon the recommendation of the Secretary. They shall have the powers
d for in Section 10, Chapter 2, Book IV of the Administrative

and functions as pro\
Code of 1987,

The Office of the UnderSecretaries shall consist of the UnderSecretaries and their
immediate staff.

Section 11. The Assistant Secretaries — There shall be three(3)
Assistant Secretaries who shall serve as Secretarys of the three(3) bureaus of the
Department as provided for under Section 8 of this law. They shall all be appointed
by the President of the Philippines, upon the recommendation of the Secretary.

The Office of the Assistant Secretaries shall consist of the Assistant Secretaries and

their immediate staf.
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Section 12. Qualifications - No person shall be appointed Secretary,
Undersecretary for Operations, or Assistant Secretary of the Bureau for Mining
Regulation unless he is a natural-bom citizen of the Philippines, at least forty(40)
years of age, a holder of a Bachelor of Science in Mining Engineering degree from
any reputable University or College, a Registered Mining Engineer, a resident of the
Philippines for the last ten(10) years, of good moral character, of proven competence
in any field of mining, and has not publicly displayed hostility to mining

No person shall be appointed UnderSecretary for Policy and Programs, and
Administrative Services or Assistant Secretary for Mineral Economics unless he is a
natural-born citizen of the Philippines, at least thirty five(36) years of age, a resident
Of the Philippines for the last five(S) years, of good moral character, of proven
competence in mining, metallurgy, geology, law, management or economics, and has
not publicly displayed hostility to mining,

No person shall be appointed Assistant Secretary for Mining Technology unless he is
@ natural-born citizen of the Philippines, at least thirty five(35) years of age, a
Registered Mining Engineer, a resident of the Philippines for the last five(5) years, of
good moral character, of proven competence in mining, and has not publicly
displayed hostility to mining.

No person shall be appointed Assistant Secretary for Metallurgical Technology
unless he is a natural-born citizen of the Philippines, at least thirty five(35) years of
age, a Registered Metallurgical Engineer, a resident of the Philippines for the last
five(6) years, of good moral character, of proven competence in metallurgy, and has
Not publicly displayed hostility to mining.

No person shall be appointed Assistant Secretary for Geological Survey unless he is
@ natural-born citizen of the Philippines, at least thirty five(35) years of age, a
Registered Geologist, a resident of the Philippines for the last five(5) years, of good
moral character, and of proven competence in geology, and has not publicly
displayed hostility to mining,

No person who has publicly displayed hostility to mining shall be appointed to any
Position in the Department, its Bureaus and attached agencies and corporations,
including their subsidiaries

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Section 13. Bureaus - The Department shall have the following bureaus,

namely, the Bureau of Mining Technology, and the Bureau of Mineral Economics.

The bureaus shall have the following powers and functions:

(b)

(@) Bureau of Mining Regulations

(1) Assist the Department, through the UnderSecretary for Operations, in
the administration and disposition of all mineral lands and mineral
resources of the country

(2) Recommend to the Secretary, through the UnderSecretary for
Operations, the grant of mineral agreements or other mining permits,
except mineral processing permits, to duly qualified persons;

(3) Recommend to the Secretary, through the UnderSecretary for
Operations the approval of financial or technical assistance agreements;

(4) Assist the Department, through the UnderSecretary for Operations, in
the regulation and supervision of the operations of all Contractors and
Permittees, except those of Mineral Processing Permit holders:

(6) Assist the Department in exercising complete management and control
over areas embraced by mineral reservations;

(6) Assist the Department, through the UnderSecretary for Operations, in
the formulation of policies, regulations, and programs pertaining to the
mineral reserves and resources of the country, both onshore and
offshore, provided that such policies, regulations, and programs do not
Conflict with the practice of Mining Engineering, Metallurgical
Engineering, and Geology, as provided for by the professional laws

(7) Assist in the formulation and implementation of policies to develop and
increase the mineral reserves of the country;

(8) Assist in the formulation of sectoral plans and programs relative to the
exploration, development and utilization of mineral and reserves;

(9) Provide consultative training and advisory services to practitioners and
institutions in the areas of regulated activities;
(10) Formulate such rules and regulations as may be necessary for the

effective implementation of this law.

Bureau of Mining Technology

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Assist the Department in overseeing the mining operations of
Contractors/Permittees particularly on mining practices and methods
relating to protection of life and property, economy of operations,
prevention of pollution, environmental protection and mineral
conservation, and social development

Assist the Department in ensuring that Contractors/Permittees take
necessary measures to provide for the growth and development of any
industry suitable for the contract area, other than mining, in order that
when the mine is exhausted or becomes no longer profitable for mining
purposes the people residing therein or those who used to work for the
mine will have a substitute industry or business activity to provide for
their means of livelihood, and to place the mine in a condition suitable
for habitation or agriculture;

Assist the Department in enforcing rules and regulations on
environmental protection and enhancement, social development,
mineral conservation, and mine safety,

Assist the Department in verifying every Contractor or Permittee’s full
report, under oath, of all discoveries of ores made in their mines,
whether by boring, drifting, sinking, or otherwise together with the assay
value thereof.

Develop technical standards, safety and operating procedures for
mineral resources and reserves exploration, development, and
utilization, provided that such standards and procedures do not conflict
with the practice of the Mining Engineering, Metallurgical Engineering,
and Geology as provided for by the professional laws.

‘Conduet research on mine safety and technology

Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

(©) Bureau of Metallurgical Technology

a)
@)

Assist the Department in the issuance of Mineral Processing Permits
Assist the Department, through the UnderSecretary for Operations, in
the regulation and supervision of the operations of all Mineral
Processing Permit holders;

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(3) To conduct or undertake metallurgical, chemical, and similar
fesearchers and prepare reports thereon; and to provide laboratory
services to the general public;

(4) Develop technical standards, safety and operating procedures for
mineral processing and metallurgical operations that such standards
and procedures do not conflict with the practice of the Metallurgical
Engineering, Mining Engineering, and Geology as provided for by the
professional laws,

(8) Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

(d) Bureau of Geological Survey

(1) To conduct geological and geophysical surveys of the Philippines and
its territorial waters, and to prepare reports and maps therefor:

(2) To prepare geohazard maps for the entire country;

(3) If warranted, to engage in mineral canvassing, exploration,
development, and mining of the mineral resources of the country,
whether found in mineral reservations, in registered mining claims, or in
private and/or public lands;

(4) To conduct other kinds of surveys of all mineralized areas, and
inventory of the mineral resources, of the Philippines and prepare
reports, boundary plans and maps therefor;

(6) Develop technical standards, safety and operating procedures for
mineral processing and metallurgical operations that such standards
and procedures do not conflict with the practice of the Geology, Mining
Engineering, and Metallurgical Engieering as provided for by the
professional laws.

(6) Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

(©) Bureau of Mineral Economics

(1) To disseminate information conceming the administration and
disposition of mineral lands, mining operations, utilization of minerals,
mineral economics, and other surveys, researches, and such other
activities through appropriate reports, bulletins and circulars.

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(2) To require Contractors or Permittees, including Mineral Processing
Permit Holders, as part of their mining and processing activities to keep
in their offices complete set of books of accounts showing all receipts
and expenditures, the source of such receipts, and the object of such
expenditures, and assign authorized representatives of the Department
of Mines to inspect such books of accounts;

(3) Formulate such rules and regulations as may be necessary for the
effective implementation of this law.

CHAPTER IV
ATTACHED AGENCIES AND CORPORATIONS

Section 14, - All Government agencies and corporations, whether created by
law or registered with the Securities and Exchange Commission, which are involved
in mining, shall henceforth be transferred to the Department of Mines. The Secretary
shall be, in a concurrent capacity, be the ex-officio Chairman of said agencies and
corporations provided that the Secretary shall, in no case, be the Chief Executive
Officer or Chief Operating Officer of the same and/or their subsidiaries, any law to the
contrary notwithstanding.

The Secretary may recommend to the President the reorganization of these agencies
and corporations.

CHAPTER V
OWNERSHIP OF MINERAL LANDS AND MINERAL DEPOSITS

Section 15. State Ownership of Mineral Deposits.- All mineral deposits in
public or private land, including those in ancestral domains and ancestral lands within
the terrtiorial limits of the Republic of the Philippines whether found in, on, or under
the surface of dry lands, beds of creeks, rivers, lakes or other submerged lands
within the territiorial waters or on the continental or insular shelf or its analogue in an
archipelago seawards from the shores of the Philippines belong to the state,
inalienably and imprescriptively, and the administration, disposition and utilization
thereof shall be governed by this Law and by the rules and regulations promulgated
thereunder and other laws. Minerals cannot be the subject of acquisitive prescription.

Section 16. Minerals Excluded from Other Rights to Lands- The
ownership or the right to use public or private land, ancestral domains and ancestral

lands whether exposed or submerged, for agricultural, logging, industrial,
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commercial, residential, petroleum exploration/utilization, or any purpose other than
mining, does not include the ownership of nor the tight to develop or utilize the
mineral deposits found in, on or under the surface of such lands.

Section 17. Mineral Deposits Open to Location ~ Subject to any existing
rights or reservations, all mineral deposits in public or private lands, ancestral domain
or ancestral lands including timber or forest land as defined in existing laws shall be
open to mineral agreements or financial or technical assistance agreements.

CHAPTER VI
MINERAL RESERVATIONS

Section 18. Establishment Mineral Reservations - When the national
interest so requires, such as when there is a need to preserve strategic raw materials
critical to the national interest, national defense and/or development or certain
minerals for scientific, cultural or ecological value, the President may establish
mineral reservations, without prejudice to existing prioir rights, upon the
Fecommendation of the Secretary. All submerged lands within the contiguous zone
and the exclusive economic zone are hereby declared mineral reservations. Mining
operations within mineral reservations may be undertaken by the Department or by
private Contractors,

The President may alter or modify the boundaries of any mineral reservation as he
may deem proper.

Section 19. Maximum Area of Mineral Reservations - The total area of
mineral reservations onshore that the President may proclaim shall not exceed three
million(3,000,000) hectares at any given time except during times of national
emergency officially declared as such by the President in which the President may, at
his discretion, proclaim such mineral reservations as he may deem necessary
without any limit as to the total area.

Section 20. Reversion of Mineral Reservations - The President may,at
any time, revert to the public domain any mineral reservation.

Section 21. Other Reservations- Exploration, development or mining
operations in reservations other than mineral reservations may be undertaken by the
Department or through a Qualified Person selected through competitive bidding

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under such terms and conditions as may be prescribed by the Secretary, subject to
the approval of the President.

CHAPTER VII
GOVERNMENT MANAGEMENT

Section 22. Authority of the Department - The Department shall be the
primary 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 and to
promulgate rules and regulations as may be necessary to implement the intent and
provisions of this law.

Section 23. Regional Offices - There shall be as many regional offices in
the country as may be established by the Secretary

Section 24. Processing of Applications - The system of processing
applications for mining rights shall be prescribed in the rules and regulations of this
law.

Section 25. Survey, Charting and Delineation of Mining Areas ~ A sketch
plan or map of the contract or mining area suitable for publication purposes and
prepared by a Geodetic Engineer duly deputized by the Department shall be required
during the filing of a mineral or financial or technical assistance agreement. After all
clearances have been granted, the contract or mining area shall be surveyed and
monumented by a deputized Geodetic Engineer and the survey plan shall be
approved by the Secretary or his duly authorized representative before the mineral
agreement or financial or technical assistance agreement is approved

Section 26. Meridional Blocks - For purposes of delineation of the contract
or mining areas under this law, the Philippine territory and its exclusive economic
zone shall be divided into meridional blocks of one-half minute(1/2’) latitude and one-
half minute(1/2’) longitude.

Section 27. Recording System - There shall be established a national and
regional filing and recording system. A mineral resource database system shall be

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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 locations in
the map, mining rules and regulations, other official acts, affecting mining and other
information relevant to mineral resources development.

CHAPTER VIII
SCOPE OF APPLICATION

Section 28. Scope of Application - This law shall govern the exploration,
development, mining and processing of all mineral resources

Section 29. Areas Open to Mining Operations - Subject to existing rights
or reservations or prior agreements, all mineral resources in public or private lands,
ancestral domains, ancestral lands, including timber or forestlands as defined by law
shall be open to mineral agreements or financial or technical assistance agreements
applications.

In ancestral domains or lands, consent of the Indigenous Cultural
Communities shall be secured by the applicant before any mineral agreement or
financial or technical assistance agreement is approved.

Section 30. Areas Closed to Mining Applications — Mineral agreement or

financial or technical assistance agreement applications shall not be allowed:

(@) _ In military or other Government reservations except upon prior clearance of
the Government agency concerned

(b) Near or under public or private buildings, cemeteries, archaelogical and
historic sites, bridges, highways, waterways, railroads, reservoirs, dams, or
other infrastructure projects, public or private works, including plantations,
areas with valuable crops, except upon written consent of the Government
agency or private entity concerned

(©) _ Imareas covered by valid and existing mining rights

(@) _ Inareas expressly prohibited by law

(2) In areas mortgaged to Government financial institutions, Government-owned
and controlled corporations or Government agencies, regardless of whether
the mining rights are expired or not, without the consent of the concemed
Government financial institution, Government-owned and controlled
corporations or Government agencies.

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() Old growth or virgin forests, proclaimed watershed forest reserves, wilderness
area, 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
Area System(NIPAS) under Republic Act No. 7586 and other laws

CHAPTER IX
MINERAL AGREEMENTS

Section 31. Modes of Mineral Agreements - For purposes of exploration,
development and mining operations, a mineral agreement may take the following
forms as herein defined:

(@) Mineral Production Sharing Agreement(MPSA) — is an agreement where
the Government grants to the Contractor the exclusive right to conduct
exploration, development and 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 the agreement

(b) Co-production Agreement(CPA) - is an agreement between the
Government and the Contractor wherein the Government shall provide
inputs to the mining operations other than the mineral deposit.The
Govemment shall earn a rate of return on its inputs and shall share in the
gross output

(c) Joint Venture Agreement(JVA) — is an agreement where a joint venture
company is organized by the Goverment and the Contractor with both
parties having equity shares. Aside from earnings in equity, the
Govemment also shares in the gross output.

‘A mineral agreement shall grant to the Contractor the exclusive right to conduct
exploration, development and mining operations in the Contract Area, except in those
areas within rivers, streams, creeks, lakes and other bodies of water in which a
separate sand and gravel permit or mineral agreement shall be secured. The
Contractor may be allowed to convert his agreement into any of the modes of mineral
agreements or financial or technical assistance agreements covering the remaining
Period of the original agreement subject to the approval of the Secretary.

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Section 32. Eligibility - A qualified person may enter into any of the
three(3) modes of mineral agreements with the Government for exploration,
development and mining.

Section 33.- Maximum Areas for Mineral Agreement ~ The maximum area
that a qualified person may apply for and hold at any given time under a mineral
agreement shall be

(a) Onshore, in the entire Philippines —

(1) For individuals, six(6) meridional blocks or four hundred eigthy
six(486) hectares

(2) For corporations and partnerships, sixty(60) meridional blocks or
four thousand eight hundred sixty(4,860) hectares

(6) Offshore, in the entire Philippines, including the exclusive economic

zone -
(1) For individuals, twelve(12) meridional blocks or nine hundred
seventy two(972) hectares
(2) For corporations and partnerships, one huindred twenty(120)
meridional blocks or nine thousand seven hundred twenty(9,720)
hectares
The maximum areas that can be applied for above shall include Contract Areas
covered by operating agreements or other forms of contracts with other parties
covering exploration, development and mining operations and existing mineral
agreement applications.

Section 34, 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 Department.

The filing of a proposal for a Mineral Agreement shall give the applicant the
prior right to areas covered by the same. The proposed mineral agreement will be
‘Subject to the approval of the Secretary

Section 36. Assignment/Transfer.- Any assignment or transfer of rights and
obligations under any Mineral Agreement or Permits, except a Financial or Technical
Assistance Agreement shall be subject to approval by the Secretary. Such
assignment or transfer shall be deemed automatically approved if not acted upon by
the Secretary or his duly authorized representative within thirty(30) days from receipt
thereof unless patently unconstitutional or illegal

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No assignment or transfer shall be allowed unless the mineral agreement or permit
has been in existence for at least five(5) years and provided that the
assignee/transferee is a Qualified Person, has the technical and financial capability
to explore, develop, or operate the mines and_ has also been in existence for at least
five(6) years. Provided further that subsequent assignments/transfers shall also be
made only every five(6) years at a time. Provided finally that the assignment may be
allowed if the Contractor or transferee have not violated mining and environmental
faws and that proof of payment of capital gains tax, documentary stamps tax, transfer
tax and other taxes have been submitted,

For purposes of computing the capital gains, documentary stamps taxes, transfer tax
and other atxes, the mineral agreement shall be the subject of a mine valuation by a
Private Licensed Mining Engineer and a Licensed Mining Engineer of the
Department. The higher of the two(2) valuations shall be the basis for computing the
taxes,

Application/s for mineral agreement/ or permit/s shall not be eligible for assignment
or transfer,

Section 37. 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 a decision within a period of thirty(30)
days. Provided that the Contractor has met all its technical, financial, and legal
obligations.

Section 38. 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 subject to changes that may be
mutually agreed upon by the Parties. After the renewal period, the operation of the
minesite may be undertaken by the Government or through a Contractor. The
‘shall be awarded to the highest bidder in a public

contract for the operation of a
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.

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Chapter X
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT

Nn 39. Eligibility — Any Qualified Person or Foreign-Owned Corporation
with technical and financial capability to undertake large-scale exploration,
development and mining operations may enter into a Financial or Technical
Assistance Agreement with the Government provided that areas covered by rivers,
streams, creeks, lakes and similar bodies of water shall not be covered by the
Contract Area of the financial or technical assistance agreement and in which a
Qualified Person, but not a Foreign-Owned Corporation, May secure a separate sand
and gravel permit or mineral agreement.

Section 40. Maximum Contract Area - The maximum Contract Area that

may be granted per Qualified Person/Foreign-Owned Corporation, shall be:

(a) Onshore, in the entire Philippines — Sixty(60) meridional blocks or
four thousand eight hundred sixty(4,860) hectares

(b) Offshore, in the entire Philippines, including the exclusive economic
Zone - one huindred twenty(120) meridional blocks or nine thousand
Seven hundred twenty(9,720) hectares

The maximum areas that can be applied for above shall include Contract Areas
Covered by operating agreements or other forms of contracts with other parties
Covering exploration, development and mining operations and exisitng mineral
agreement applications.

Section 41. Terms and Conditions — The following terms, conditions and
warranties shall be incorporated in the Financial or Technical Assistance Agreement
(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 implementing rules and regulations of this law.
(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.
(©) Submission of proof of technical competence, such as but not limited to,
its track record in mineral resource exploration, development and mining

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operations, details of technology to be employed in the proposed
operation and details of technical personnel to undertake the operation.

(d) Representation 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 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 undertaking to timely deploy these
Tesources under its supervision pursuant to the periodic work programs
and related budgets when proper.

() For foreign-owned corporation, representations and warranties that,
except for payments for disposition for its equity, foreign investments in
loc! enterprises which are qualified for repatriation and local suppliers’
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 exploration,
development or mining operations.

(9) The mining operations shall be conducted in accordance with the
Provisions of this law and its implementing rules and regulations

(h) Work programs and minimum expenditures commitments

() Preferential use of local goods and services to the maximum extent
practicable

() 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 affected by mine tailings and other forms of
pollution or destruction

(). The Contractor shall furnish the Government, upon demand, all records
Pertaining to its mining operations and shall open its books of accounts for
inspection

(m)Requiring the proponent to dispose of the minerals and by-products
produced under a financial or technical assistance agreement at the
highest price and more advantageous terms and conditions as may be
provided for under the Implementing Rules and Regulations of this law.

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(n) Provide for consultation and arbitration with respect to the interpretation
and implementation of the terms and conditions of the agreement.

(0) Such other terms and conditions consistent with the Constitution and with
this law as the Secretary may deem to be for the best interest of the State
and the welfare of the Filipino people.

Section 42, 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 wtihin thirty(30) days from execution and approval thereof,

Section 43. Filing and Evaluation of Financial or Technical Assistance
Agreement Proposals - All financial or technical assistance agreement proposals
shall be filed with the Department after payment of the required processing fees. If
the proposal is found to be sufficient and meritorious in form and substance, it shall
be recorded by the Department 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 shall not be impaired or
prejudiced thereby. The Secretary shall recommend its approval to the President

Section 44. Term of Financial or Technical Assistance Agreement- A
financial or technical assistance agreement shall have a term not exceeding twenty
five(25) years starting 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 45. Option to Convert to Mineral Agreement - The Contractor
shall have 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 area is found to be inadequate to justify large-scale mining operations,
after proper notice to the Secretary as may be provided for under the Implementing
Rules and Regulations. Provided that the mineral agreement shall only be for the
remaining period of the financial or technical assistance agreement

In case of a Foreign-Owned Corporation, it shall reduce its foreign equity to no more
than forty percent(40%) of its capital. Upon complince with this requirement, the
‘Secretary shalll approve the conversion and execute the mineral agreement.

Section 46. Assignment/Tranfer- A financial or technical assistance
agreement may be assigned or transferred, in whole or in part to a Qualified Person
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or @ Foreign-Owned Corporation 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 approval thereof.

No assignment or transfer shall be allowed unless the financial or technical
assistance agreement has been in existence for at least ten(10) years and provided
that the assignee/transferee is a Qualified Person or a Foreign-Owned Corporation,
has the technical and financial capability to explore, develop, or operate the mines
and has also been in existence for at least ten(10) years. Provided that subsequent
assignmentsitransfers shall also be made only every ten(10) years at a time.
Provided further that the assignment may be allowed if the Contractor or transferee
have not violated mining and environmental laws and that prooof of payment of
Capital gains tax, documentary stamps tax, transfer tax and other taxes have been
submitted

For purposes of computing the capital gains, documentary stamps tax, transfer tax
and other taxes the financial or technical assistance agreement shall be the subject
of a mine valuation by a Private Licensed Mining Engineer and a Licensed Mining
Engineer of the Department. The higher of the two(2) valuations shall be the basis for
computing the taxes.

Application/s for financial or technical assistance agreement/s shall not be eligible for
assignment or transfer.

Section 47. Withdrawal from Financial or Technical Assistance
Agreement — The Contractor shall manifest in writing to the Secretaary its intention
to withdraw from the Agreement, if in its judgment, the mining project is no longer
economically feasible, even after it has exerted reasonable diligence to remedy the
cause of the situation. The Secretary may accept the withdrawal provided that the
Contractor has complied with all his technical, financial or legal obligations.

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Chapter XI
SMALL-SCALE MINING
Section 48. Small-Scale Mining - Small-scale mining shall be governed by
this law.
Chapter XII
QUARRY RESOURCES
Section 49. Quarry Resources - Quarry resources shall be governed by this.
law.
Chapter Xill
SAND AND GRAVEL

Section 50. Sand and Gravel - Sand and gravel utilization shall be govemed
by this law and shall be covered by the following types of permits unless they contain
valuable minerals such as gold, chromite, iron and other metals in which case they
shall be covered by a mineral agreement.

Section 51. Commercial Sand and Gravel Permit - Any Qualified Person
may be granted a Commercial Sand and Gravel permit by the Secretary or his duly
authorized representative to extract sand and gravel and other loose or
unconsolidated materials which are used in their natural state, without undergoing
Processing from an area of not more than five(5) hectares and in such quantities as
may be specified in the permit.

Section 52. Industrial Sand and Gravel Permit - Any Qualified Person may
be granted an Industrial Sand Gravel Permit by the Secretary or his duly authorized
representative to extract sand and gravel and other loose or unconsolidated
‘materials that necessitate the use of mechanical processing covering an area of not
more than twenty(20) hectares at any one time. The permit shall have a term of
five(6) years, renewable for like periods but not to exceed twenty five(25) years.

Section 53, Exclusive Sand and Gravel Permit - Any Qualified Person may
be granted an Exclusive Sand and Gravel Permit by the Secretary or his duly
authorized representative to extract sand and gravel and other loose or
unconsolidated materials from public lands for his use provided that there will be no
commercial disposition thereof,

A mineral agreement or financial or technical assistance agreement Contractor may
extract sand and gravel and other loose and unconsolidated materials without need

of a permit within its Contract Area for exclusive use in the mining operations.
Page 27 of 45


Provided that said right shall be coterminous with the term of the agreement and
provided further that areas within rivers, streams, creeks, lakes and similar bodies of
water shall be covered by a separate sand and gravel permit.

Section 54. Government Gratuitous Permit — Any Government entity or
instrumentality may be granted a gratuitous permit by the Secretary or his duly
authorized representative to extract sand and gravel or loose and unconsolidated
materials needed in the construction of public buildings and/or other infrastructure for
public use over an area of not more than five(S) hectares for a period coterminous
with said construction but not to exceed five(6) years,

Section 55. Private Gratuitous Permit — Any owner of private land may be
granted by the Secretary or his duly authorized representative a private gratuitous
permit over an area of not more than five(6) hectares for a period not exceeding two
(2) years

Section 6. Guano Permit - Any Qualified Person may be granted by the
Secretary or his duly authorized representative a guano permit to extract and utilize
unconsolidated guano deposits and other organic fertilizer materials. The permit shall
be for specific caves and for confined sites only.

Section 57. Gemstone Gathering Permit - Any Qualified Person may be
granted a non-exclusive gemstone gathering permit by the Secretary or his duly
authroized representative to gather stones useful as gemstones in rivers and other
locations.

Section 57. Assignment/Transfers - No assignment or transfer of any type
of permit under this Chapter shall be allowed

Chapter XIV
TRANSPORT,SALE AND PROCESSING OF MINERALS

Section 58. Ore Transport Permit - A permit specifying the origin and
quantity of non-processed ores or minerals shall be required for their transport.
Transport permits shall be issued by the Secretary or his duly authroized
representative who has jurisdiction over the area where the ores or minerals where
extracted. The absence of a permit shall be considered as prima facie evidence of
illegal mining and shall be sufficient cause for the Govemment to confiscate the ores
or minerals being transported, the tools and equipment being utilized and the vehicle

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containing the same. Ore or mineral samples not exceeding one(1) metric ton to be
used exclusively for assay or pilot test purposes shall be exempted from such
requirement.

Section 59, Mineral Trading Registration — No person shall engage in the
trading of ores and minerals, either locally or intemationally unless registered with the
Department.

Section 60. Minerals Processing Permit — No person shall engage in the
processing of minerals without a Minerals Processing Permit issued by the Secretary.
Minerals processing permit shall be for a period of five(5) years renewable for like
periods but not to exceed twenty five(25) years.

‘A mineral agreement or financial or technical assistance agreement shall include the
tight to process ores or minerals and Contractors shall no longer be required to
secure a separate Minerals Processing Permit.

Section 61. Eligibility of Foreign-Owned Corporations ~ A foreign-owned
corporation may be granted a Minerals Processing Permit,

Chapter XV
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING
TECHNOLOGY

Section 62. Expenditure for Community Development 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 mining
technology.

Section 63. Credited Activities - Activities that may be credited as
expenditures for development of mining communities 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 exisitng laws or collective bargaining
agreements and the like

(b) Any activity or expenditure directed towards the development of mining
technology or geosciences such as, but not limited to, institutional or

manpower development, and basic and applied researches.Appropriate
Page 29 of 45


supervision and control mechanisms shall be provided for in the
Implementing Rules and Regulations of this law.

Section 64. Training and Development — A Contractor shall maintain an
effective program of manpower training and development throughout the term of the
mineral agreement or the financial or technical assistance agreement and shall
encourage and train Filipinos to participate in all aspects of the mining operations
including the management thereof,

Section 65, Use of Local Goods, Services and Technology - A
Contractor shall give preference to the use of local goods, services 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 66. Donation/Turn-Over of Facilities ~ Prior to cessation of mining
operations occassioned 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 tumed over or donated tax-free to the local Government to ensure that said
infrastructure or facilities are continuously maintained and utilized by the host and
neighboring communities.

Section 67. 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. Provided that no
foreigner shall be employed as Mine General Manager, Resident Manager, Mine
Superintendent, General Superintendent, Vice President for Operations, Chief Mining
Engineer, Mine Engineer or equivalent managerial positions in charge of mining
operations without passing the Government licensing examination for Mining
Engineers

Chapter XVI
SAFETY AND ENVIRONMENTAL PROTECTION

Section 68. Mine 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.

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Section 69. Mine Labor ~ No person under sixteen(16) years of age shall be
employed in any phase of mining operations and no person under the age of
eighteen(18) years of age shall be employed in any underground mine.

Section 70. Mine Supervision ~ All mining and quarrying operations, large
or small, shall be supervised by at least one(1) licensed Mining Engineer with five(5)
years experience in mining operations and one(1) registered mine foreman for every
seventy five(75) personnel involved in actual mining operations,

Section 71. Mine Inspection — The Secretary or his authorized
representative shall have exclusive 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 72. Power to Issue Orders - The Secretary or his authorized
representative shall forthwith or within such time as specified in his order require the
Contractor to remedy any practice connected with mining or quarrying operation
which is not in accordance with safety and environmental laws, rules and regulations.
In case of imminent danger to life or property, the Secretary or his authorized
representative may summarily suspend mining or quarrying operations until the
danger is removed or appropriate measures are taken by the Contractor.or
Permittee.

Section 73. Report of Accidents - In case of any accident or incident,
Causing or creating the danger of loss of life or serious physical injuries, the Mining
Engineer in charge of operations shall immediately report the same to the regional
office where the mining operations are situated. Failure to report the same without
Justifiable reason shall be a cause for the imposition of administrative sanctions
prescribed in the Implementing Rules and Regulations of this law.

Section 74. Environmental Protection - Every Conttactor shall undertake
an environmental protection and enhancement program covering the period of the
mineral agreement, financial or technical assistance 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, financial or technical assistance agreement or
Permit. The work program shall include not only plans relative to mining operations

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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 socio-economic development.

Section 75. En)
exploration period of a mineral agreement or financial or technical assistance

mental Impact Assessment(EIA) — Except during the

agreement, an environmental compliance certificate shall be required based on an
environmental impact assessment,

Section 76. 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 law. A Mines 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. Fallure to fulfil this
obligation shall mean immediate suspension or closure of the mining activities of the
Contractor or Permittee,

Chapter XVII
AUXILIARY MINING RIGHTS,

Section 77. Timber Rights - Any provision of law to the contrary
notwithstanding, a Contractor may be granted the right to cut trees or timber within
his mining areas 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 or removal thereof shall be determined by the Secretary, upon
consultation with the Contractor, the timber concessionaire/permittee and the Forest
Management Bureau of the Department. Provided further that in case of
disagreement, 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 78. Water Rights — A Contractor shall have water rights for mining
operations upon the approval of his 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 shall not be
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impaired. Provided further that the Govemment shall regulate water rights and the
reasonable and equitable distribution of water supply so as to prevent monoploy of
the use thereof.

Section 79, Right to Possess Explosives - A Contractor shall have the
right to possess and use explosives within his Contract Area as may be necessary
for his mining operations upon approval of an 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 80. Easement Rights - When mining areas are so situated that for
Purposes of more economical 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,
alrports, 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, or tunnels, the Contractor, upon payment of just
compensation shalll be entitled to enter said mining areas or lands,

Section 81. 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 operation shall be properly compensated as provided for under
the Implementing Rules and Regulations of this law. Provided further that to
guarantee such compensation, the person authorized to conduct mining operations
shall, prior thereto, post a bond with the Secretary 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 Secretary.

Chapter XVIII
PROTESTS, ADVERSE CLAIMS AND APPEALS

Section 82. Protest and Adverse Claims.- Any protest or adverse claim of
any nature whatsoever involving the right to possession, exploration, development or
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operation of any mining claim in any part of the Philippines shall be filed with the
Secretary for investigation. The protest or adverse claims shall be accompanied by
all plans, documents, and other data upon which the protest or adverse claim is
based.

All protest and adverse claims shall be filed no later than fifteen(18) days after the
date of the first publication of the application for mineral agreement. No protest or
adverse claims shall be entertained after the lapse of fifteen (15) days from first
Publication. When a protest or adverse claim is filed, all proceedings in connection
with the application for mineral agreement, financial or technical assistance
agreement, or permits shall be stayed until the controversy is settled and decided by
the Secretary.

Section 83. Priority Rights. in case of conflict of mining claims, priority of
recording shall determine the right to the area, notwithstanding any defect in form or
technicality. Provided that in case of discrepancy, between the area described in the
application for mineral agreement, financial or technical assistance agreement or
permit and the actual area occupied in the ground, the former shall prevail subject to
any question as to having complied with all the requirements under this law.

Section 84, Appeals.- Any party not satisfied with the decision or order of
the Secretary may, within fifteen(15) days from receipt thereof, appeal to the Office of
the President.

In all cases, the decision of the Secretary shall be executory notwithstanding any
appeal unless the President of the Philippines, the Court of Appeals or the Supreme
Court direct otherwise and the prevailing party has the right to immediately take
Possession and conduct exploration and mining operations as the case may be,
provided that the prevailing party shall deposit in escrow in a Government bank an
amount to be fixed by the Secretary for the protection of the interest of the party to
whom the mining claims are ultimately awarded.

A petition for review by certiorari and questions of law may be filed by the aggrieved
Party before the Court of Appeals within thirty(30) days from receipt of the decision or
order of the President of the Philippines. Any party not satisfied with the decision or
order of the Court of Appeals may file an appeal before the Supreme Court within
thirty(30) days from receipt thereof.

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Chapter XIX
FISCAL PROVISIONS

Section 85. Government Share - The total Government share in mineral
agreements shall be the excise tax on mineral products as provided for in the
National Internal Revenue Code and a royalty equivalent to three percent(3%) of the
gross value of minerals sold for mineral agreements and other types of permits and
five percent(5%) of the gross value of minerals sold for financial or technical
assistance agreements.

Provided that in the case of limestone, pozzolan, shale or silica for cement
Manufacture and other industries similarly situated in which local prices are not set,
the gross value shall be the higher of the values determined by a private licensed
Mining Engineer with more than five(5) years experience in enterprise or mine
valuation and the Mines and Geosciences Bureau,

Section 86. Government Share in Other Mineral Agreements.-
Government share in co-production and joint venture agreements, in addition to that
provided in Section 70 of this law shall be negotiated by the Secretary with the
Contractors concerned provided that the Government shall earn a reasonable rate of
return on its investments,

Section 87. Occupation Fees .- There shall be collected from the holders
of mineral agreements, financial or technical assistance agreements or permits
occupation fees in amounts to be prescribed by the Secretary under the
Implementing Rules and Regulations of this law.

The Secretary is authorized to increase the fees provided herein, subject to existing
laws, rules and regulations +

Section 88. Manner of Payment of Occupation Fees .- The fees shall be
paid on the date the mineral agreement, financial or technical assistance agreement
or permit is registered with the appropriate mines regional 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 Secretary in case of offshore
mining areas. If the fee is not paid on or before the due date, a penalty of twenty five
percent(25%) shall be imposed.

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Section 89. Mine Waste and Tailings Fees - A semi-annual fee to be
known as Mine Waste and Tailings Fee is hereby imposed on all operating mines,
This fee shall accrue to a reserve fund to be used exclusively for payment for
damages to:

(@) Lives and personal safety

(b) Lands, agricultural crops, and forest products, marine life and quatic

resources, cultural resources, and

(©) 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,

Section 90. Filing Fees and Other Charg
to charge reasonable filing fees or other charges as he may prescribe in accordance
with the Implementing Rules and Regulations.

The Secretary is authorized

Chapter Xx
INCENTIVES

Section 91. Mining Claims - Except as provided herein, no other taxes,
fees or imposts may be imposed by the National and/or Local Governments on
mining claims involving mineral agreements, financial or technical assistance
agreement and permits,

Section 92. Environmental Protection and Enhancement Structures and
Equipment. ~ Environmental Protection and Enhancement structures and equipment
Such as but not limited to tailings dams, sedimentation ponds, pipelines, flumes and
similar structures and equipment as may be determined by the Secretary shall not be
subject to real property or other taxes.

Chapter XX!
GROUNDS FOR CANCELLATION, REVOCATION AND TERMINATION

Section 93. Fixed Causes of Cancellation - The causes of cancellation
provided for in this law shall be considered as inherent in all mineral agreements,

financial or technical assistance agreements or permits or other rights hereunder and
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No new cause or modification of such causes shall apply to any mineral agreement,
financial or technical assistane agreement or permit existing at the time such new or
modified causes are made effective.

Section 94, Violation of Terms and Conditions of Agreements and
Permits- Gross violation of the terms and conditions of the mineral agreement,
financial or technical assistance agreement or permit shall be sufficient ground for
the cancellation of the same.

Section 95. Falsehood and Omission of Facts ~ All statements made in the
application for mineral agreement, financial or technical assistance agreement or
permit shall be considered as conditions and essential parts thereof and any false
statement or omission of facts which may alter, change or affect susbtantially the
facts set forth in said statements shall be a ground for the termination of any mineral
agreement, financial or technical assistance agreement or permit,

Chapter XXII
PENAL PROVISIONS

Section 96. False Statements - Any person who knowingly presents or
causes to be presented any false application, declaration or evidence to the
Government or publishes or causes to be published any prospectus or other
information containing any false statement relating to mines, mining operations,
mineral agreement/s, financial or technical assistance agreement/s or permit/s shall
be guilty of perjury if such statement is made under oath and shall be punished, upon
conviction, in accordance with the provisions of the Revised Penal Code. If the
statement is not under oath, he shall be punished, upon conviction with a fine of Ten
Million Pesos(P 10,000,000).

Section 97. Intentional Overlapping — Any person who shall intentionally
overlap any mining claim knowing fully well that the area is already covered by
another valid and subsisting mining claim shall be guilty of falsification of public
documents punishable under the Revised Penal Code.

Section 98. Destruction of Claim Monuments and Marks — Any person
who willfully and maliciously defaces, removes or disturbs any stake, post,
monuments, boundary line or any other mark lawfully placed on mining claims or
destroys, injures or defaces any rules or notices required under this law shall be

Page 37 of 45


punished, upon conviction, by a fine of One Million Pesos(P 1,000,000) besides
paying compensation for the expenses incurred in replacing the defaced, altered,
removed or disturbed stakes, posts, monuments, boundary lines, notices or any other
mark

Section 99. Theft of Minerals - Any person who, without a mineral
agreement, financial or technical assistance agreement or permit shall extract,
remove, and or dispose of minerals for commercial purposes belonging to the
Government or from a mining claim held by other persons without the written
permission of such claim owner shall be deemed to have stolen the ores or the
producst therefrom from the mines or mills. He shall, upon conviction, be imprisoned
from six(6) months to six(6) years or pay a fine of double the value of the minerals
stolen or both at the discretion of the Court, beside paying compensation for the
minerals extracted and disposed of, the royalty, taxes, and the damage caused
thereby.

Section 100, Fraudulent Conveyance of Mining Interest - Any person,
who, with intent to gain knowingly sells, transfers or conveys any false mining claim/s
or any false right, title, or interest in such mining claims which were not actually
located on the ground and do not exist as such claims shall be guilty of estafa and
shall be punished upon conviction, in accordance with the provisions of the Revised
Penal Code.

Section 101. Salting of Minerals and Mineral Lands - Any person who
knowingly places or deposits or becomes accessory to the placing or depositing of
any mineral in any land for the purposes of “salting” or misleading other persons as
to the value of the mineral deposits in such land or who, knowingly co-mingles or
causes to be co-mingled samples of minerals with any other substance/s whatsoever
which increases the value or in any way changes the nature of said minerals for the
purpose of deceiving, cheating, or defrauding any person, shall be punished, upon
conviction, by imprisonment not exceeding a period of thirty(30) years besides paying
compensation for the damage which have been caused thereby.

Section 102. Pollution from Mine Wastes and

Tailings — Any person
who willfully causes or permits sludge or tailings and other mine and mill wastes to
accumulate in or flow from his mineral agreement, financial or technical assistance
agreement or permit so as to cause danger, injury or obstruction to any public road,
rivers or streams or other public property shall be punished, upon conviction, by a

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fine not exceeding Five Million Pesos(P §,000,000.00) or imprisonment not
exceeding six (6) years or both at the discretion of the Court besides paying
compensation for the damage thereby.

Section 103. Interference with Mine Water Rights - Any person who
wilfully takes water from a mine, mill, dam, reservoir or from any other source of mine
water or prevents the water from entering said mine or mill, dam, reservoir or any
other source of mine water or in any way interferes in the full enjoyment of water
rights previously granted and lawfully held by another person, shall be punished,
upon conviction, by a fine not exceeding Five Million Pesos(P §,000,000.00) or
imprisonment not exceeding six(6) months or both at the discretion of the Court

Section 104, Destruction of Mining Structures - Any person who
willfully destroys or damages structure in or in Contract Areas for mineral
agreements, financial or technical assistance agreements or permits or on mill sites,
shall be punished, upon conviction, by imprisonment not to exceed six(6) years
besides paying compensation for the damages which may have been caused
thereby.

Section 105. Mine Arson Any person who wilifuly sets fire to any mine,
workings, mill or fittings shall be punished, upon conviction, by imprisonment in
accordance with the provisions of the Revised Penal Code besides paying
compenstion for the damage caused thereby.

Section 106. Willfull Damage toa Mine ~ Any person who willfully
damages, unlawfully causes water to flow into a mine, or obstructs any shaft or
passage to a mine, or renders useless, damages or destroys any machine,
equipment, apparatus, rope, chain or any other thing used in a mine, shall be
Punished, upon conviction, by imprisonment not exceeding six(8) years, besides
paying compensation for the damage caused thereby.

Section 107. Illegal Obstruction to Government Officials - Any person
who willfully obstructs, harasses, and/or threatens the Secretary or his authorized
representatives in the performance of duties pursuant to this law, shall be punished,
upon conviction, by a fine not exceeding One Million Pesos(P 1,000,000) or by
imprisonment not exceeding one(1) year or both at the discretion of the Court

Section 108. Illegal Obstruction to Contractor or Pert
Person who, without justifiable cause prevents or obstructs a Contractor or Permittee
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from undertaking prospecting, exploration, development or mining operations, shall
be punished, upon conviction, by a fine not exceeding One Million Pesos(P
1,000,000) or by imprisonment not exceeding one(1) year or both at the discretion of
the Court.

Section 109. Delay in the Payment of Tax and/or Royalty — Where the
amount of tax or royalty provided for under this law is not paid on due date, there
shall be collected as part of the amount due, a surcharge of five percent(5%) per
month, compounded monthly from the dsue date until fully paid

Section 110. Offenses by Corporation - Whenever any of the offenses
provided for under this law is committed by a corporation or partnership, the firm's
President and all of its Secretaries, or Managers or agent or representative if a
foreign-owned corporation who shall have directed or induced the commission of said
offense shall be criminally liable as principal thereof.

Chapter XXill
GENERAL PROVISIONS

Section 111. Executive Officer - The Secretary shall be the Executive
Officer charged with carrying out the provisions of this law. Except as herein
provided, the Secretary shall issue the rules, regulations and orders necessary to
carry out the provisions and purposes of this law.

Section 112. Conservation Measures ~ All Contractors and Permittees
under this law shall take appropriate measures and undertake researches in
accordance with the best practices to maximize recovery and utilization of minerals
and stop or prevents wastes in mining and milling operations. Rules and regulations
may be issued which shall require Contractors and Permittees to utilize in their
exploration, development and mining operations the latest and most improved
methods and devices to prevent wastes, or from causing pollution or otherwise
damaging streams, surface and underground water supply and valuable mineral
deposits

During the productive operation of any mine, the Contractor or Permittee shall take
the necessary measures to provide for the growth and development of any industry
suitable for the area, other than mining in order that when the mine is exhausted or
becomes no longer profitable for mining purposes, the people residing therein or

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those who used to work for the mine will have a sibstitute industry or business activity
to provide their means of livelihood, Furthermore, the mine shall be placed in a
Condition suitable for habitation or agriculture and free from danger of cave-ins, slides
and other risks brought about by mining operations.

Section 113. Fixed Taxes and Fees - Taxes and royalties which are fixed
by the provisions of this law as considered as inherent in all mineral agreements,
financial or technical assistance agreements or permits and shall remain at the rates
and levels in force at the time such agreements or permits were issued. Any increase
in the amount or rate of taxes and royalties shall apply only to agreements or permits
subsequent to the effectivity of such increase.

Section 114. Minerals Not Included in Land Grants - Land grants to
Provinces, districts or municipalities to aid in the construction of roads, or other public
Works does not include the minerals therein,

Section 115. Maps of Mine Workings Required - Contractors and
Permittees undertaking underground operations shall prepare and maintain a map or
maps of convenient scale showing their workings which shall be updated and made
available to the Secretary or his duly authorized representative/s upon demand.

Chapter XXIV
TRANSITORY AND FINAL PROVISIONS

Section 116. Abolition of the Mines and Geosciences Bureau - The
Mines and Geosciences Bureau is hereby abolished subject to Section 118 of this
law.

Section 117. Transfer of Powers and Functions — The powers and
functions of the Department of Environment and Natural Resources as far as mineral
lands and mineral resources are concemed as well as all the powers and functions of
the Mines and Geosciences Bureau are hereby transferred to the Department of
Mines.

The foregoing transfer of power and functions shall include all applicable funds and
appropriations, records, equipment, property, and personnel as may be necessary.

Section 118. Transfer of Rights, Assets, and Liabilities — The
Department shall, by virtue of this law, be subrogated to alll the rights and assume all
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the liabilities of the Mines and Geosciences Bureau and all their funds, records,
property, assets, equipment, and such personnel as necessary including
unexpended appropriations and/or allocations. All contracts and liabilities of the
Mines and Geosciences Bureau are hereby transferred to and assumed by the
Department and shall be acted upon in accordance with the Auditing Code and other
pertinent laws, rules and regulations. Provided that the officers and employees of the
Mines and Geosciences Bureau shall continue in a holdover capacity until such time
that the new officers and employees of the Department shall have been duly
appointed in accordance with this law.

Section 119. Structure and Staffing Pattern - The organizational
framework and staffing pattern of the Department shall be prescribed and approved
by the Secretary within sixty (60) days after the approval of this law and the
authorized positions created therein shall be filled by regular appointments by the
President or the Secretary as the case may be. Provided that in the filling of positions
created, preference shall be given to the personnel of the Mines and Geosciences
Bureau and provided further that if such individuals possess the same qualifications,
seniority shall be given priority.

Any personnel of the Mines and Geosciences who are appointed but fails to report
for duty within fifteen(15) days from receipt of the appointment shall be deemed to
have declined his appointment and in which case the position may be filled up by
another qualified applicant. Provided that those incumbents whose positions are not
included therein and who are not appointed to any position in the Department or its
Bureaus within six(6) months from the approval of the organizational framework and
staffing pattern shall be deemed separated from the service, Those separated from
the service shall receive the retirement benefits to which they may be entitled under
existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of
‘one(1) month basic salary for every year of service in the Govemment or a fraction
thereof, computed on the basis of highest salary received,

Section 120, Appropriations.- Such sums as may be necessary for the
implementation of this law shall be taken from the current fiscal year’s appropriations
of the Mines and Geosciences Bureau and such other amounts that the President
may allocate from other resources provided that the total amount shall not exceed
Five Hundred Million Pesos(P 500,000,000.00). Thereafter, the amount needed for

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the operation and maintenance of the Department shall be included in the annual
General Appropriations Act.

Section 121. Disclosure and Divestment.of Financial Interest - Before
assumption of office, the Secretary, UnderSecretaries and Assistant Secretaries shall
submit to the Civil Service Commission a list of all companies, partnerships or
business enterprises, including non-profit organizations in which he or any immediate
member of his family within the second degree of consagunity or affinity have any
form of financial interest or employment relationships, including consultancy,

Within thirty(80) days thereafter, complete divestments of financial interest in any
institution, firm, or company which fall under the supervisory or regulatory jurisdiction
of the Department shall be made.Provided, however, that in cases where
confirmation of appointment by the Commission on Appointments is required, the
divestment mandated shall complied with within thiry(30) days after such
confirmation

The divestment required in the preceding paragraphs shall likewise apply to the
member of the immediate family with the second degree of consanguinity or affinity
having interest in any institution or activity under the regulatory jurisdiction or
supervision of the Department and its attached agencies and corporations,

Section 122, Relationship with Other Government Departments - Upon
Tequest of the Department, all Governemnt agencies with functions relative to the
approval of projects of the Department shall act upon or resolve the matter within
thirty(0) calendar days. Towards this end, the Secretary, with the approval of the
President, amy establish an inter-agency secretariat for the purpose of expediting the
approval of said projects.

Section 123. Visitorial Powers - The Secretary of the Department or his
duly authorized representative shall have visitorial powers over non-government
entities for the exploration, development of mineral resources and reserves in order
to determine the share of the Government in the revenues thereof and to ascertain
that all funds collectible and due the Government have actually been collected.

During such examination, the non-government entity shall produce all the reports,
‘cords, books of accounts and other documents that may be required.

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The refusal by any non-government entity to allow an examination of its books of
accounts or pertinent records or its concealment of any material information
conceming its financial status shall be a breach of its contract with the Government
and shall constitute a legal ground for the the cancellation thereof.

Section 124. Non-impairment of Vested or Acquired Substantive Rights
- Changes made and new provisions and rules laid down by this law which may
Prejudice or impair vested or acquired rights in accordance with other mining laws
Previously enforced shall have no retroactive effect. Provided that the provisions of
this law which are procedural in nature shall prevail

Section 125. Old Valid Mining Rights May Come Under This Law -
Holders of valid and subsisting mining rights under other laws, irrespective of the
areas covered may avail of the rights and privileges under this law by making the
necessary application therefore within two(2) years from the effectivity of this law.

All pending applications for mineral agreements, financial or technical assistance
agreements or permits shall, within two(2) years from the effectivity of this law, re-
submit their applications to conform with the provisions of this law. Failure to re-apply
shall automatically cause the denial of their applications and their proposed Contract
Areas shall henceforth be opened to new applications.

Section 126. Separability Clause.- if any section or portion of this Act shall
be declared unconstitutional or invalid, such shall declaration shall not invalidate any
other section of this Act.

Section 127. Repealing Clause.- Republic Act No. 7942(‘the Philippine
Mining Act of 1995), Republic Act No. 7076(‘People's Small-Scale Act of 1991") and
Presidential Decree No. 1281 dated January 16,1978(‘revising Commonwealth Act.
No, 136, Creating the Bureau of Mines and for Other Purposes) are hereby repealed
and Section Twenty Five of Republic Act No. 4274('the Mining Engineering Law of
the Philippines and Section 15 of Executive Order No, 192 dated June
10,1987("Providing for the Reorganization of the Department of Environment,
Energy, and Natural Resources, Renaming it as Department of Environment and
Natural Resources and for Other Purposes), are hereby amended accordingly. All
other laws, parts of law, orders, ordinances, or regulations and all parts thereof
inconsistent with the provisions of this law are likewise repealed or amended
accordingly,

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Section 128. Effectivity Clause.- This Act shall take effect fifteen(15) days
following its publication in the Official Gazette or in a major daily newspaper of
general circulation in the Philippines,

Approved.

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