Mining laws and other related laws

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Mining Laws Review
History of Bureau of Mines and Mining Laws
Inspeccion General de Minas – the first Mines Office in the
Philippines dating back during the Spanish regime and taking charge
of the administration and disposition of minerals and mineral lands.
November 28, 1898 – under the Philippine Revolutionary Republic,
the Departamento de Fomento (Department of Public Welfare) was
created by virtue of the decree signed by Pres. Aguinaldo.
November 29, 1898 – Pres. Aguinaldo signed a decree creating four
(4) divisions of the Departamento de Fomento. One of these was the
Industry and Agriculture Division and Mines Section was under it.
March 10, 1900 – a reorganization was implemented by the
Americans through General Order No. 31 resulting in the emergence
of Mining Bureau.
As part of the reorganization, the administration of mining grants and
claims instituted prior to April 11, 1899 was transferred to from the
Mining Bureau to the Public Lands thru Act No. 916.
1905 – Mining Bureau and the Bureau of Government Laboratories
were fused under the Bureau of Science and the Mining Bureau
became the Division of Geology and Mines.
January 5, 1933 – thru Memo Order No. 5, the Mineral Lands Division
of the Bureau of Lands was merged with the Division of Geology and
Mines under the Bureau of Science to form a division known as
Division of Mineral Resources under the Department of Agriculture
and Commerce which was tasked with carrying out the provisions of
1) Act of Congress of 1902 pertaining to mineral lands and the
governance of the leasing and development of coal lands; 2) Act No.
3077, as amended by Act 3852, governing the exploration, location
and lease of petroleum; 3) Act No. 2719 governing mineral oils and
gas.
September 19, 1934 – Division of Mineral Resources was again

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placed under the direct supervision and control of Bureau of Science
and was renamed Division of Mining.
November 7, 1936 – Commonwealth Act No. 136 and 137 were both
enacted. C.A. 136 created the Bureau of Mines while C.A. 137,
known as the Mining Act of 1936, was the first major mining law of
the Philippines.
January 30, 1942 - when Second World War came, the Bureau of
Mines was reconstituted under the Department of Agriculture and
Commerce by virtue of Executive Order No. 1.
1944 – during the Puppet Philippine Republic, the Bureau of Mines
shrunk again into a division of the Department of Agriculture and
Natural Resources.
February 27, 1945 – the Philippine Commonwealth was re-
established and the Bureau of Mines was restored. Since then, the
Bureau of Mines had been under the direct control and supervision of
the Department of Agriculture and Natural Resources.
May 17. 1974 - pursuant to P.D. 461, the Bureau of Mines was
transferred to the Department of Natural Resources.
May 17, 1974 - PD 463, otherwise known as the Mineral Resources
Development Decree of 1974, was issued by Pres. Marcos. It
amended C.A. 137 and provided, among others, for a modernized
system of administration and disposition of mineral lands and
promoted and encouraged the development and exploration of
mining industry.
June 6, 1978 - P.D. 1281 was issued revising C.A. 136 boosting the
Bureau of Mines and Geosciences Bureau with additional tasks as
well as authority to make it more responsive to the objectives of the
government for its mineral sector.
December 14, 1979 - P.D. 1654 was issued amending some section
of P.D. 1281 including the renaming of Bureau of Mines to Bureau of
Mines and Geosciences making it more responsive to its various
functions.

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June 10, 1987 – E.O 192 was issued by Pres. Cory Aquino
reorganizing the Department of Natural Resources. MGB became
one of the staff bureaus of DENR. It took the functions of the Bureau
of Mines and Geosciences and absorbed the functions of the
abolished Mineral Resources Dev. Board (MRDB) and the Gold Mining
Industry Assistance Board.
March 3, 1995 – R.A. 7942, known as the Philippine Mining Act of
1995, was enacted, transforming Mines and Geosciences Bureau into
a line bureau.
August 15, 1997 – DAO 95-23, the Implementing Rules and
Regulations of R.A. 7942 was promulgated.
December 19, 1996 - DAO 96-40, otherwise known as the Revised
Implementing Rules and Regulations of the Philippine Mining Act of
1995, was promulgated.
April 11, 1997 – DAO 97-11 was promulgated wherein MGB
implemented a full re-organization and established two (2) new
divisions: 1) Mining Environment and Safety Division; and 2) Mine
Tenement Management Division.
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Important Mining Laws, Rules and Regulations
C.A. 137 – known as the Mining Act of 1936, was the first major
mining law of the Philippines.
PD. 463 – known as the Mineral Resources Development Decree of
1974 amended C.A. 137.
R.A. 7942 – Philippine Mining Act of 1995. It was approved on March
3, 1995 and tool effect on April 9, 1995. Amended PD 463.
DAO 95-23 – the first Implementing Rules and Regulations of R.A.
7942 promulgated on August 15, 1997.
DAO 96-40 – the Revised Implementing Rules and Regulations of R.A.

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7942. It is now the present implementing rules and regulations of R.A.
7942 but with so many amendments.
PD 1899 - Establishing Small-scale Mining as a new Dimension in
Mineral Development. (Effective January 23, 1984).
MRD-41 Rules and Regulations Governing the Granting of Small-
scale Mining under PD 1899. (Effective June 4, 1984).
Salient Features, among others:
a) Annual production not exceeding 50,000 metric tons;
b) Total capital not exceeding P10M;
c) Exemption from payment of taxes except income tax.
R.A 7076 - An Act Providing a People’s Small Scale Mining Program
and for Other Purposes. (Approved June 27, 1991.
Salient Features, among others:
a) Small-scale mining contract;
b) Declaration of People’s Small-scale Mining Area;
c) Award of Mining Contracts shall be made to registered small
-scale miners as an individual miner or cooperative;
d) Royalty of 1 ½% of gross value of metallic mineral output or
1% of the gross value of non-metallic mineral output to be paid to
claimowner;
e) Royalty of 1% of gross value of minerals recovered to be
paid to landowners plus payment for actual damages in the
declaration of his land;
f) Creation of P/CMRB which will promulgate rules and
regulations related to small-scale mining, among others.
DAO 34, series of 1992 – known as the Rules and Regulations To
Implement Republic Act No. 7076.
BP 265 - An Act Prohibiting the extraction of Gravel and Sand from
Beaches.

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It prohibits the extraction of gravel and sand and other activities
as would erode or diminish the natural beauty of beaches!
DAO 28, series of 1992. Guidelines in the issuance of Special Permits
for Pebble Picking along beaches
Salient Feature, among others: Issued only to cooperatives duly
registered with CDA.
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Other Important DENR Issuances
1. DAO 30, series of 1992, as amended - Guidelines for the
transfer and implementation of DENR functions devolved
to local government units but still subject to supervision,
control and review of DENR.
2. DAO 99-10 - Guidelines in the Determination of Qualified
Persons for Mining applications and Mining Rights.
This provides for additional mandatory requirement that
applicant for MA, EP shall be required to have a minimum
authorized capital stock of P10M and a minimum paid-up of
P2.5M. For FTAA, minimum authorized capital stock of US$4M or
its Philippine Peso equivalent after approval by the President and
before registration of the FTAA.
3. DMO No. 2004-09 - Promulgated on August 31, 2004. –
Simplification of Procedures in the Issuance of Mining
Contracts and Permits.
Salient features, among others:
a) Immediate Processing of Mining Applications.
Within fifteen (15) working days from the receipt of a
mining application, the Mines and Geosciences Bureau (MGB)

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Regional Office (RO) concerned shall determine whether or not
the applied area is open to mining applications and forward the
cleared mining application to the One-Stop Shop Committee for
Area Status and Clearance and subsequent evaluation
thereafter, leading to the possible approval or the said mining
application. Within the same fifteen (15)-working day period, a
mining application filed entirely in closed areas pursuant to the
pertinent provisions of Section 15 of DENR Administrative Order
(DAO) No. 96-40,the revised implementing rules and regulations
of Republic Act No. 7942 or the Philippine Mining Act of 1995,
as amended, shall be formally denied. In the case of a mining
application filed partly in closed areas, the mining applicant
shall be formally advised within the same period to excise the
closed areas and resubmit the rectified documents within the
prescribed period.
b) Creation of a One-Stop Shop Committee for the Issuance
of Area Status and Clearance for Mining Applications
In support of the Mining Investment Assistance Center, all
MGB ROs, in coordination with the DENR ROs, shall establish
the “One-Stop Shop Committee” (OSSC) representing the DENR
Sectors in the region, to facilitate the issuance of Area Status
and Clearance for mining applications and consequently reduce
their processing time. The OSSC Chairman, upon the
recommendation of the OSSC members, shall be authorized to
issue the Area Status and Clearance for mining applications
following the applicable provisions of DENR Memorandum
Order No. 98-03 re: Guidelines in the Issuance of Area Status
and Clearance or Consent for Mining Applications.
c) Consultation with and Prior Approval by the Sanggunian.
Mining applicants/Contractors/Permittees/Permit
Holders shall consult with all the Sangguniang
Panlalawigan/Bayan Panlungsod/ Barangay concerned in
support of mining applications and/or in the implementation of
mining projects: Provided, That in case of a mining application
intended for exploration thru an EP, MA or FTAA, the proof of

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consultation and/or project presentation shall be in the form of
the following:
a. Copies of the pertinent Exploration and
Environmental Work Programs duly received by the
Secretary of all of the Sanggunian concerned or Office of
all the Vice-Governor/Vice-Mayor concerned; or
b. A certification of project presentation by all the
Provincial Governor, Vice-Governor, Municipal/City Mayor
or Vice-Mayor concerned, or the Secretary of all the
Sanggunian concerned.
Provided, Further, That prior approval or endorsement in
the form of a Resolution or Certification by at least the majority
of the Sanggunian concerned shall be required in support of
mining applications for immediate development and/or
utilization activities and of applications for approval of
Declaration of Mining Project Feasibility under the Development
and Construction/Operating Periods of MAs and FTAAs.
In the case of an application for Sand and Gravel Permit,
the proof of approval or endorsement by the Sanggunian
concerned shall be deemed complied with if the applicant has
already secured the Environmental Compliance Certificate (ECC)
for the project concerned.
.
d) Certification Precondition by the National Commission on
Indigenous Peoples.
The Certification Precondition by the National
Commission on Indigenous Peoples (NCIP) shall be deemed
complied with for mining applications filed in private lands, in
accordance with the provisions of Section 56 of Republic Act
(R.A.) No. 8371: Provided, That the mining applicant concerned
shall submit the pertinent proof(s) of ownership of such
property/ies, such as certified true copy of the Original/Transfer
Certificate of Title, among others.

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e) Issuance of Industrial Sand and Gravel Permit.
The RDs of the MGB shall exercise the delegated
authority to issue an Industrial Sand and Gravel Permit (ISGP)
without prior clearance from the MGB Director pursuant to the
applicable provisions of DAO No. 96-40, as amended, and all
other applicable mining and environmental laws rules and
regulations. However, they shall submit to the MGB Director a
copy each of every ISGP issued, to include all mandatory and
other requirements, within seven (7) days after the date of
issuance.
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4. DMO 2004-10. – Promulgated on August 31, 2004.-
Procedural Guidelines in the Evaluation of Mining Project
Feasibility Studies for the Approval of Declaration of
Mining Feasibility and Applications for Mineral Processing
Permits and Mineral Agreements in the Development or
Operating Period.
Salient features, among others:
a) Submission of Feasibility study to MGB-RO for evaluation
within 20 days and indorsement to MGB-CO.
b) The Feasibility Study shall undergo study by the Director
and the Technical Committee on Mining Feasibility
Studies.
c) In case of Mineral Processing Permit applications with
project cost of less than 200M Pesos, the MGB-RO after
its evaluation of the Feasibility Study or Project
Description shall conduct a technical conference with
project proponent.
d) FTAA should be considered to have a profitable operating
mine life of 15 years to ensure 10 years of collection of
government share given a maximum cost recovery period
of 5 years.
e) For Mineral Agreements, the number of operating years
with tax holidays should not exceed 30% of the total mine

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life of the project.
f) Except for MPP applications, the ore reserves statement
in an FS or PD shall be reviewed by the TCMFS within
seven (7) working days upon receipt by the MGB Central
Office. If found necessary, the TCMFS shall recommend
the conduct of a joint ore reserve validation to be
undertaken by the central and regional offices upon
payment by the project proponent of the necessary
verification fee and submission of the required
exploration data. All expenses for the analysis of check
samples and reproduction of maps and related
documents shall be borne by the project proponent.
5. DAO No. 2005-07 – Issued on April 14, 2005. Providing
for the Establishment of a Final Mine Rehabilitation and
Decommissioning Fund.
Salient Features, among others:
a) The Contingent Liability and Rehabilitation Fund (CLRF)
shall be in the form of the Mine Rehabilitation Fund, the
Mine Waste and Tailings Fees and the Final Mine
Rehabilitation and Decommissioning Fund.
b) The Monitoring Trust Fund shall not be less than
P150,000.00.
c) When the mine has reached the end of its operating life,
the RCF shall be terminated and in lieu thereof, the Final
Mine Rehabilitation and Decommissioning Fund shall be
utilized to fund all rehabilitation and decommissioning
activities.
d) The Final Mine Rehabilitation and/or Decommissioning
Plan (FMR/DP) shall be integrated in the EPEP submitted
by the Contractors/Permit Holders to the MRG Committee.
e) The submission and approval of a FMR/DP, in lied of the
Abandonment/Decommissioning Plan shall be
incorporated as a mandatory requirement in the ECC.
f) A Final Mine Rehabilitation and Decommissioning Fund
(FMRDF) shall be established by each operating
Contractor/Permit Holder to ensure that the full cost of
the approved FMR/DP is accrued before the end of the
operating life of the mine.

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g) Failure of the Cotractor/Permit Holder to establish a Mine
Rehabilitation Fund and a Final Mine Rehabilitation and
Decommissioning Fund shall be a sufficient ground to
suspend or cancel the mining operations in the areas
under contracts.
6. DENR Adm. Order No. 2005-08 – Promulgated on April 14,
2005, providing for new fees and charges for various
services of MGB. Ex:
a) Filing/renewal fee for application for EP and MA – P60.00
per hectare or a fraction thereof but not less than
P50,000.00;
b) Filing fee for application for FTAA – P60.00 per hectare or
a fraction thereof but not less than P100,000.00;
c) Occupation fees for Exploration Permit (for EP, MA, FTAA,
TEP, SMP, MLC is P100.00 per hectare or fraction thereof
within mineral reservation areas, and P75.00 per hectare
or a fraction thereof for non-mineral reservation areas.
7. DENR Adm. Order No. 2005-15 – Promulgated on August
4, 2005. To provide for the Exploration Permit of Financial
Technical Assistance Agreement as the Initial Mode of Entry
in the Conduct of Mineral Exploration and for Other Purposes.
Salient Features, among others:
a) Certificate of Environmental Management and
Community Relations Records (CEMCRR)/Certificate of
Exemption and Environmental Work Program are no longer
mandatory requirements as they are required only after
acceptance of the application but prior to the issuance of the
EP;
b) Permittee which is a juridical personality shall be
required to submit a copy of its SEC received GIS annually;
c) One of the grounds of cancellation of the Exploration

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Permit by the Director is the failure to secure the required proof
of consultation with/project presentation to the Sanggunian
concerned within one (1) year from issuance of the EP.
d) ECC, EPEP, CEMCRR and approved survey plan shall be
required from the Mineral Agreement applicant after
acceptance of the application but prior to approval. Same with
SSMP applicant;
d) Term of exploration period shall be two (2) years,
renewable for like periods but not to exceed 4 years for
non-metallic minerals and 6 years for metallic minerals.
Other Related Laws
Act 2719 –Coal Land Act. An Act to Provide for the Leasing and
Development of Coal Lands in the Philippines which was approved on
May 14, 1917. NOTE: This was superseded by PD 972, otherwise
known as the Coal Development Act of 1976, signed on July 28, 1976.
Subsequently, amended by PD 1174 on July 27, 1977.
Act. No. 2932 – The Petroleum Act.
R.A. No. 387, otherwise known as Petroleum Act of 1949.
PD 647 – Declaring Uranium, Thorium and Other Radioactive
Minerals Not Subject to Mining Location or Disposition. [NOTE: This
was repealed by PD 1101which declared such areas open to mining
location.
PD 972 – Coal Development Act of 1976.
PD 1206 – Creating Department of Energy which was tasked to
formulate policies on the development, utilization, exploitation of
energy resources on October 6, 1977.
PD 1722 – Creating the National Coal Authority.

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RA 7638, Otherwise known as the Department of Energy Act of 1992,
creating the Department of Energy.
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Penal Provisions Under R.A. 7942
SEC. 101. False Statements. Any person who knowingly presents
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 or mineral agreements, financial or technical assistance
agreements and permits shall, upon conviction, be penalized by a fine
of not exceeding Ten thousand pesos (10,000.00).
SEC. 102. Illegal Exploration. - Any person undertaking
exploration work without the necessary exploration permit shall, upon
conviction, be penalized by a fine not exceeding Fifty thousand pesos
(50,000.00).
SEC. 103. Theft of Minerals. Any person extracting minerals
and disposing the same without a mining agreement, lease, permit,
license or steals minerals or ores or the products thereof from mines
or mills or processing plants shall, upon conviction, be imprisoned
from six (6) months to six (6) years, or pay a fine from Ten thousand
pesos (P10,000.00) to Twenty thousand pesos (P20,000.00), or both,
at the discretion of the appropriate court. In addition, he shall be
liable to pay damages and compensation for the minerals removed,
extracted, and disposed of. In the case of associations, partnerships
or corporations, the president and each of the directors thereof shall
be responsible for the acts committed by such association,
corporation or partnership.
[NOTE: Compare this one with PD 581(Prescribing a Heavier
Minimum Penalty for Highgrading or Theft of Gold from a Mining
Claim or Mining Camp, Nov. 13, 1974) with the following salient
features: 1. penalty is pricion correctional in its minimum period for
any person guilty of highgrading or theft of gold from a mining camp

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or mining claim, but if the accused is employee or laborer of mining
operator penalty is pricion correctional in medium period, without
prejudice to imposition of higher penalty under Art. 309 of Revised
Penal code if the value of the goods warrants, that is: P12,000.00 to
P22,000.00 prision mayor in its minimum and medium period. If it
exceeds P22,000.00 maximum period plus 1 year for each
P10,000.00 but not to exceed 20 years. 2. unauthorized possession
by any person within a mining claim or camp of gold ores or gold
extracted from such ores is prima facie evidence that they have been
stolen.]
SEC. 104. Destruction of Mining Structures. Any person who
willfully destroys or damages structures in or on the mining area or
on the mill sites shall, upon conviction, be imprisoned for a period not
to exceed five (5) years and shall, in addition, pay compensation for
the damages which may have been caused thereby.
SEC. 105. Mines Arson. Any person who willfully sets fire to
any mineral stockpile, mine or workings, fittings or a mine, shall be
guilty of arson and shall be punished, upon conviction, by the
appropriate court in accordance with the provisions of the Revised
Penal Code and shall, in addition, pay compensation for the damages
caused thereby.
SEC. 106. Willfull Damage to a Mine. - Any person who
willfully damages a mine, unlawfully causes water to run into a mine,
or obstructs any shaft or passage to a mine, or renders useless,
damages or destroys any machine, appliance, apparatus, rope, chain,
tackle, or any other things used in a mine, shall be punished, upon
conviction, by the appropriate court, by imprisonment not exceeding a
period of five (5) years and shall, in addition, pay compensation for
the damages caused thereby.
SEC. 107. Illegal Obstruction to Pemittees or Contractors.
Any person who, without justifiable cause, prevents or obstructs the
holder of any permit, agreement or lease from undertaking his mining
operations shall be punished, upon conviction by the appropriate
court, by a fine not exceeding Five thousand pesos (P5,000.00) or
imprisonment not exceeding one (1) year, or both, at the discretion of
the court.

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SEC. 108. Violation of the Terms and Conditions of the
Environmental Compliance Certificate. Any person who willfully
violates or grossly neglects to abide by the terms and conditions of
the environmental compliance certificate issued to said person and
which causes environmental damage through pollution shall suffer
the penalty of imprisonment of six (6) months to six (6) years or a
fine of Fifty thousand pesos (50,000.00) to Two hundred thousand
pesos (200,000.00), or both, at the discretion of the court.
SEC. 109. Illegal Obstruction to Government Officials. - Any
persons who illegally prevents or obstructs the Secretary, the Director
or any of their representatives in the performance of their duties
under the provisions of this Act and of the regulations promulgated
hereunder shall be punished, upon conviction, by the appropriate
court, by a fine not exceeding Five thousand pesos (5,000.00) or by
imprisonment not exceeding one (1) year, or both, at the discretion of
the court.
SEC. 110. Other Violations. Any other violations of this Act
and its implementing rules and regulations shall constitute an
offense punishable with a fine not exceeding Five thousand Pesos
(5,000.00).
SEC. 111. Fines. The Secretary is authorized to charge fines
for late or non submission of reports in accordance with the
implementing rules and regulations of this Act.
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