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REPUBLIC ACT NO. 7942 [AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION]

a.  Ancestral lands refers to all lands exclusively and actually possessed, occupied, or utilized by indigenous cultural communities by themselves or through their ancestors in accordance with their customs and traditions since time immemorial, and as may be defined and delineated by law.
 
b.  Block or meridional block means an area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of longitude, containing approximately eighty-one hectares (81 has.).
 
c.  Bureau means the Mines and Geosciences Bureau under the Department of Environment and Natural Resources.
 
d.  Carrying capacity refers to the capacity of natural and human environments to accommodate and absorb change without experiencing conditions of instability and attendant degradation.
 
e.  Contiguous zone refers to water, sea bottom and substratum measured twenty-four nautical miles (24 n.m.) seaward from the base line of the Philippine archipelago.
 
f.  Contract area means land or body of water delineated for purposes of exploration, development, or utilization of the minerals found therein.
 
g.  Contractor means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial or technical assistance agreement.
 
h.  Co-production agreement (CA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(b) hereof.
 
i.  Department means the Department of Environment and Natural Resources.
 
j.  Development means the work undertaken to explore and prepare an ore body or a mineral deposit for mining, including the construction of necessary infrastructure and related facilities.
 
k.  Director means the Director of the Mines and Geosciences Bureau.
 
l.  Ecological profile or eco-profile refers to geographic-based instruments for planners and decision-makers which presents an evaluation of the environmental quality and carrying capacity of an area.
 
m.  Environmental compliance certificate (ECC) refers to the document issued by the government agency concerned certifying that the project under consideration will not bring about an unacceptable environmental impact and that the proponent has complied with the requirements of the environmental impact statement system.
 
n.  Environmental impact statement (EIS) is the document which aims to identify, predict, interpret, and communicate information regarding changes in environmental quality associated with a proposed project and which examines the range of alternatives for the objectives of the proposal and their impact on the environment.
 
o.  Exclusive economic zone means the water, sea bottom and subsurface measured from the baseline of the Philippine archipelago up to two hundred nautical miles (200 n.m.) offshore.
 
p.  Existing mining/quarrying right means a valid and subsisting mining claim or permit or quarry permit or any mining lease contract or agreement covering a mineralized area granted/issued under pertinent mining laws.
 
q.  Exploration means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extent, quantity and quality thereof and the feasibility of mining them for profit.
 
r.  Financial or technical assistance agreement means a contract involving financial or technical assistance for large-scale exploration, development, and utilization of mineral resources.
 
s.  Force majeure means acts or circumstances beyond the reasonable control of contractor including, but not limited to, war, rebellion, insurrection, riots, civil disturbance, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemic, earthquake, storm, flood or other adverse weather conditions, explosion, fire, adverse action by government or by any instrumentality or subdivision thereof, act of God or any public enemy and any cause that herein describe over which the affected party has no reasonable control.
 
t.  Foreign-owned corporation means any corporation, partnership, association, or cooperative duly registered in accordance with law in which less than fifty per centum (50%) of the capital is owned by Filipino citizens.
 
u.  Government means the government of the Republic of the Philippines.
 
v.  Gross output means the actual market value of minerals or mineral products from its mining area as defined in the National Internal Revenue Code.
 
w.  Indigenous cultural community means a group or tribe of indigenous Filipinos who have continuously lived as communities on communally-bounded and defined land since time immemorial and have succeeded in preserving, maintaining, and sharing common bonds of languages, customs, traditions, and other distinctive cultural traits, and as may be defined and delineated by law.
 
x.  Joint venture agreement (JVA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(c) hereof.
 
y.  Mineral processing means the milling, beneficiation or upgrading of ores or minerals and rocks or by similar means to convert the same into marketable products.
 
z.  Mine wastes and tailings shall mean soil and rock materials from surface or underground mining and milling operations with no economic value to the generator of the same.
 
aa.  Minerals refers to all naturally occurring inorganic substance in solid, gas, liquid, or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials, and geothermal energy.
 
ab.  Mineral agreement means a contract between the government and a contractor, involving mineral production-sharing agreement, co-production agreement, or joint-venture agreement.
 
ac.  Mineral land means any area where mineral resources are found.
 
ad.  Mineral resource means any concentration of minerals/rocks with potential economic value.
 
ae.  Mining area means a portion of the contract area identified by the contractor for purposes of development, mining, utilization, and sites for support facilities or in the immediate vicinity of the mining operations.
 
af. Mining operation means mining activities involving exploration, feasibility, development, utilization, and processing.
 
ag.  Non-governmental organization (NGO) includes nonstock, nonprofit organizations involved in activities dealing with resource and environmental conservation, management and protection.
 
ah.  Net assets refers to the property, plant and equipment as reflected in the audited financial statement of the contractor net of depreciation, as computed for tax purposes, excluding appraisal increase and construction in progress.
 
ai.  Offshore means the water, sea bottom and subsurface from the shore or coastline reckoned from the mean low tide level up to the two hundred nautical miles (200 n.m.) exclusive economic zone including the archipelagic sea and contiguous zone.
 
aj.  Onshore means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and creeks.
 
ak.  Ore means a naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit.
 
al.  Permittee means the holder of an exploration permit.
 
am.  Pollution control and infrastructure devices refers to infrastructure, machinery, equipment and/or improvements used for impounding, treating or neutralizing, precipitating, filtering, conveying and cleansing mine industrial waste and tailings as well as eliminating or reducing hazardous effects of solid particles, chemicals, liquids or other harmful byproducts and gases emitted from any facility utilized in mining operations for their disposal.
 
an.  President means the President of the Republic of the Philippines.
 
ao.  Private land refers to any land belonging to any private person which includes alienable and disposable land being claimed by a holder, claimant, or occupant who has already acquired a vested right thereto under the law, although the corresponding certificate or evidence of title or patent has not been actually issued.
 
ap.  Public land refers to lands of the public domain which have been classified as agricultural lands and subject to management and disposition or concession under existing laws.
 
aq.  Qualified person means any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or authorized for the purpose of engaging in miring, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law at least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines: Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or technical assistance agreement or mineral processing permit.
 
ar.  Quarrying means the process of extracting, removing and disposing quarry resources found on or underneath the surface of private or public land.
 
as. Quarry permit means a document granted to a qualified person for the extraction and utilization of quarry resources on public or private lands.
 
at.  Quarry resources refers to any common rock or other mineral substances as the Director of Mines and Geosciences Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand, diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone, marble, marl, red burning clays for potteries and bricks, rhyolite, rock phosphate, sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic glass: Provided, That such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically workable quantities: Provided, further, That non-metallic minerals such as kaolin, feldspar, bull quartz, quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious stones, and other non-metallic minerals that may later be discovered and which the: Director declares the same to be of economically workable quantities, shall not be classified under the category of quarry resources.
 
au.  Regional director means the regional director of any mines regional office under the Department of Environment and Natural Resources.
 
av.  Regional office means any of the mines regional offices of the Department of Environment and Natural Resources.
 
aw.  Secretary means the Secretary of the Department of Environment and Natural Resources.
 
ax.  Special allowance refers to payment to the claim-owners or surface right-owners particularly during the transition period from Presidential Decree No. 463 and Executive Order No. 279, series of 1987.
 
ay.  State means the Republic of the Philippines.
 
az.  Utilization means the extraction or disposition of minerals.

The State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution.
 

A ten per centum (10%) share of all royalties and revenues to be derived by the government from the development and utilization of the mineral resources within mineral reservations as provided under this Act shall accrue to the Mines and Geosciences Bureau to be allotted for special projects and other administrative expenses related to the exploration and development of other mineral reservations mentioned in Section 6 hereof.
 

a.  In military and other government reservations, except upon prior written clearance by the government agency concerned;
 
b.  Near or under public or private buildings, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity concerned;
 
c.  In areas covered by valid and existing mining rights;
 
d.  In areas expressedly prohibited by law;
 
e.  In areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners, in which case a royalty payment upon the utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned; and
 
f.  Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

a.  Onshore, in any one province

1.  for individuals, twenty (20) blocks: and
 
b. for partnerships, corporations, cooperatives, or associations, two hundred (200) blocks.
 
b.  Onshore, in the entire Philippines
 
1.  for individuals, forty (40) blocks; and
 
2.  for partnerships, corporations, cooperatives, or associations, four hundred (400) blocks.
 
c.  Offshore, beyond five hundred meters (500m) from the mean low tide level:
 
1.  for individuals, one hundred (100) blocks; and
 
2.  for partnerships, corporations, cooperatives, or associations, one thousand (1,000) blocks.

The permittee shall undertake an exploration work on the area as specified by its permit based on an approved work program.

Any expenditure in excess of the yearly budget of the approved work program may be carried forward and credited to the succeeding years covering the duration of the permit. The Secretary, through the Director, shall promulgate rules and regulations governing the terms and conditions of the permit.

The permittee may apply for a mineral production sharing agreement, joint venture agreement, co-production agreement or financial or technical assistance agreement over the permit area, which application shall be granted if the permittee meets the necessary qualifications and the terms and conditions of any such agreement: Provided, That the exploration period covered by the exploration permit shall be included as part of the exploration period of the mineral agreement or financial or technical assistance agreement.
 

a.  Mineral production sharing agreement is an agreement where the Government grants to the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. The contractor shall provide the financing, technology, management and personnel necessary for the implementation of this agreement.
 
b.  Co-production agreement is an agreement between the Government and the contractor wherein the Government shall provide inputs to the mining operations other than the mineral resource.
 
c.  Joint venture agreement is an agreement where a joint-venture company is organized by the Government and the contractor with both parties having equity shares. Aside from earnings in equity, the Government shall be entitled to a share in the gross output.

a.  Onshore, in any one province

1.  for individuals, ten (10) blocks; and
 
2.  for partnerships, cooperatives, associations, or corporations, one hundred (100) blocks.
 
b.  Onshore, in the entire Philippines
 
1.  for individuals, twenty (20) blocks; and
 
2.  for partnerships, cooperatives, associations, or corporations, two hundred (200) blocks.
 
c.  Offshore, in the entire Philippines
 
1.  for individuals fifty (50) blocks;
 
2.  for partnerships, cooperatives, associations, or corporations, five hundred (500) blocks; and
 
3.  for the exclusive economic zone, a larger area to be determined by the Secretary.

The filing of a proposal for a mineral agreement shall give the proponent the prior right to areas covered by the same. The proposed mineral agreement will be approved by the Secretary and copies thereof shall be submitted to the President. Thereafter, the President shall provide a list to Congress of every approved mineral agreement within thirty (30) days from its approval by the Secretary.
 

a.  1,000 meridional blocks onshore;
 
b.  4,000 meridional blocks offshore; or
 
c.  Combinations of a and b provided that it shall not exceed the maximum limits for onshore and offshore areas.

a.  A firm commitment in the form of a sworn statement, of an amount corresponding to the expenditure obligation that will be invested in the contract area: Provided, That such amount shall be subject to changes as may be provided for in the rules and regulations of this Act;
 
b.  A financial guarantee bond shall be posted in favor of the Government in an amount equivalent to the expenditure obligation of the applicant for any year;
 
c.  Submission of proof of technical competence, such as, but not limited to, its track record in mineral resource exploration, development, and utilization; details of technology to be employed in the proposed operation; and details of technical personnel to undertake the operation;
 
d.  Representations and warranties that the applicant has all the qualifications and none of the disqualifications for entering into the agreement;
 
e.  Representations and warranties that the contractor has or has access to all the financing, managerial and technical expertise and, if circumstances demand, the technology required to promptly and effectively carry out the objectives of the agreement with the understanding to timely deploy these resources under its supervision pursuant to the periodic work programs and related budgets, when proper, providing an exploration period up to two (2) years, extendible for another two (2) years but subject to annual review by the Secretary in accordance with the implementing rules and regulations of this Act, and further, subject to the relinquishment obligations;
 
f.  Representations and warranties that, except for payments for dispositions for its equity, foreign investments in local enterprises which are qualified for repatriation, and local supplier’s credits and such other generally accepted and permissible financial schemes for raising funds for valid business purposes, the contractor shall not raise any form of financing from domestic sources of funds, whether in Philippine or foreign currency, for conducting its mining operations for and in the contract area;
 
g.  The mining operations shall be conducted in accordance with the provisions of this Act and its implementing rules and regulations;
 
h.  Work programs and minimum expenditures commitments;
 
i.  Preferential use of local goods and services to the maximum extent practicable;
 
j.  A stipulation that the contractors are obligated to give preference to Filipinos in all types of mining employment for which they are qualified and that technology shall be transferred to the same;
 
k.  Requiring the proponent to effectively use appropriate anti-pollution technology and facilities to protect the environment and to restore or rehabilitate mined out areas and other areas affected by mine tailings and other forms of pollution or destruction;
 
l.  The contractors shall furnish the Government records of geologic, accounting, and other relevant data for its mining operations, and that book of accounts and records shall be open for inspection by the government;
 
m.  Requiring the proponent to dispose of the minerals and byproducts produced under a financial or technical assistance agreement at the highest price and more advantageous terms and conditions as provided for under the rules and regulations of this Act;
 
n.  Provide for consultation and arbitration with respect to the interpretation and implementation of the terms and conditions of the agreements; and
 
o.  Such other terms and conditions consistent with the Constitution and with this Act as the Secretary may deem to be for the best interest of the State and the welfare of the Filipino people.

In the case of a foreign contractor, it shall reduce its equity to forty percent (40%) in the corporation, partnership, association, or cooperative. Upon compliance with this requirement by the contractor, the Secretary shall approve the conversion and execute the mineral production-sharing agreement.
 

The maximum area which a qualified person may hold at any one time shall be five hectares (5 has.): Provided, That in large-scale quarry operations involving cement raw materials, marble, granite, sand and gravel and construction aggregates, a qualified person and the government may enter into a mineral agreement as defined herein.

A quarry permit shall have a term of five (5) years, renewable for like periods but not to exceed a total term of twenty-five (25) years. No quarry permit shall be issued or granted on any area covered by a mineral agreement or financial or technical assistance agreement.
 

A mineral agreement or a financial technical assistance agreement contractor shall, however, have the right to extract and remove sand and gravel and other loose unconsolidated materials without need of a permit within the area covered by the mining agreement for the exclusive use in the mining operations: Provided, That monthly reports of the quantity of materials extracted therefrom shall be submitted to the mines regional office concerned: Provided, further, That said right shall be coterminous with the expiration of the agreement.

Holders of existing mining leases shall likewise have the same rights as that of a contractor: Provided, That said right shall be coterminous with the expiry dates of the lease.
 

a.  Any activity or expenditure intended to enhance the development of the mining and neighboring communities of a mining operation other than those required or provided for under existing laws, or collective bargaining agreements, and the like; and
 
b.  Any activity or expenditure directed towards the development of geosciences and mining technology such as, but not limited to, institutional and manpower development, and basic and applied researches. Appropriate supervision and control mechanisms shall be prescribed in the implementing rules and regulations of this Act.

a.  Present evidence of his qualification and work experience; or
 
b.  Shall pass the appropriate government licensure examination; or
 
c.  In special cases, may be permitted to work by the Director for a period not exceeding one (1) year: Provided, however, That if reciprocal privileges are extended to Filipino nationals in the country of domicile, the Director may grant waivers or exemptions.