RA 7942

Phil. Mining Act

I. Section 2. Declaration of Policy. - All mineral resources in public and private lands within the territory and exclusive economic zone of the Republic of
the Philippines are owned by the State. It shall be the responsibility of the State to promote their rational exploration, development, utilization and
conservation through the combined efforts of government and the private sector in order to enhance national growth in a way that effectively
safeguards the environment and protect the rights of affected communities.
***
Right to protect is different from right to exploit
-even the owner of the private lands where the minerals are found, such minerals are still of the State.
Separate and distinct rights:
Right to possess lands
Right to minerals found
CASE:
Comilang v Buendia (1965)
There is no room for doubt, therefore, that the right to possess or own the surface ground is separate and distinct from the mineral rights over the
same land. And when the application for lode patent to the mineral claim was prosecuted in the Bureau of Mines, the said application could not have
legally included the surface ground sold to another in the execution sale
Benguet Consolidated v Republic
runs as a matter of law and follows as a matter of course from the right of the landowner to be placed in as good a position as money can accomplish,
as of the date of the taking' (30 CJS 230). Stated otherwise: 'Where the payment of compensation does not accompany the taking of property for public
use but is postponed to a later date, the owner of the property is ordinarily entitled to the award of an additional sum which will compensate for delay
(cases cited) or which was in other words, produce the full equivalent of the value of the property paid contemporaneously with the taking' (29-A CJS
762). Under this view, the interest awarded is deemed part of the just compensation required to be paid to the owner
Regalian Doctrine
Art. 12 Sec 2 Consti:
All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources are owned by the State.

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BERNARDO (NAT RES) Philippine Mining Act RA7942

II. Sec 4- Ownership of Mineral Resources. - Mineral resources are owned by the State and the exploration, development, utilization, and processing
thereof shall be under its full control and supervision. The State may directly undertake such activities or it may enter into mineral agreements with
contractors.
***
May enter to mineral agreements with qualified persons
Natural
Juridical GR: 60% Filpino ownership
XPN: FTAA (Financial and Techinical Assistance Agreement)
***AFinancial or Technical Assistance Agreement may be entered into between a Contractor and the Government for the largescale exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals except for cement raw materials, marble,
granite, sand and gravel and construction aggregates.
The State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution.
***additional to the General Rule: a Foreign-owned Corporation, Partnership, Association or Cooperative duly registered in
accordance with law and in which less than fifty percent (50%) of the capital is owned by Filipino citizens.
Mineral Agreements may be entered:
Joint Venture
Profit Sharing
Co-production
The State shall recognize and protect the rights of the indigenous cultural communities to their ancestral lands as provided for by the Constitution.
This is in consonance with the provisions on indigenous people under the EIA System
III. Sec. 5-When the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations upon the recommendation
of the Director through the Secretary. Mining operations in existing mineral reservations and such other reservations as may thereafter be established,
shall be undertaken by the Department or through a contractor
CASE:
APEX MINING v SOUTHEAST MINDORO (2009)
An exploration permit does not automatically ripen into a right to extract and utilize the minerals; much less does it develop into a vested right. The
holder of an exploration permit only has the right to conduct exploration works on the area awarded. Presidential Decree No. 463 defined exploration
as the examination and investigation of lands supposed to contain valuable minerals, by drilling, trenching, shaft sinking, tunneling, test pitting and

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BERNARDO (NAT RES) Philippine Mining Act RA7942

other means, for the purpose of probing the presence of mineral deposits and the extent thereof. Exploration does not include development and
exploitation of the minerals found. Development is defined by the same statute as the steps necessarily taken to reach an ore body or mineral deposit
so that it can be mined, whereas exploitation is defined as the extraction and utilization of mineral deposits. An exploration permit is nothing more
than a mere right accorded to its holder to be given priority in the governments consideration in the granting of the right to develop and utilize the
minerals over the area. An exploration permit is merely inchoate, in that the holder still has to comply with the terms and conditions embodied in the
permit
DENR-has the power to supervise (Rule Making Power)
MGB-Mines and Geosciences Bureau- monitors permits and licenses (Quasi-Judicial Power)
CASE:
ASAPHIL Construction v Tuason
The DENR does not have jurisdiction over the complaint for declaration of nullity of the two contracts.
Presidential Decree No. 1821 vests the Bureau of Mines of the DENR with jurisdictional supervision and control over all holders of mining claims or
applicants for and/or grantees of mining licenses, permits, leases and/or operators thereof, including mining service contracts and service contractors
insofar as their mining activities are concerned. Section 7 of PD No. 1281 provides that the Bureau of Mines has quasi-judicial powers over the
following cases:
(a) A mining property subject of different agreements entered into by the claim holder thereof with several mining operators;
(b) Complaints from claimowners that the mining property subject of an operating agreement has not been placed into actual operations within the
period stipulated therein; and
(c) Cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/ operator to abide by the terms and conditions thereof.
Although there is a trend to make the adjudication of mining cases a purely administrative matter, administrative agencies do not have exclusive
jurisdiction over mining disputes. There is still a distinction between the primary powers of the DENR Secretary and bureau directors of executive and
administrative nature, and disputes between parties that can only be adjudicated by the courts of justice.
Tuasons complaint does not involve a mining dispute or controversy that falls under the jurisdiction of the DENR because the grounds upon which
Tuason seeks to annul the contract is an alleged violation of Induplexs JVA with Grefco, Inc. This question can only be resolved by the courts. A judicial
question is raised when the determination of the question involves the exercise of a judicial function that is, the question involves the determination of
what the law is and what the legal rights of the parties are with respect to the matter in controversy.
The SC further held that what is being sought is the determination of the validity of the agreements, and the DENR need not exercise its technical
knowledge or expertise over any mining operations or dispute. The determination of the validity or nullity of a contract is a judicial question which
requires the exercise of a judicial function.
LA BUGAL BLAAN v RAMOS
Full control is not anathematic to day-to-day management by the contractor, provided that the State retains the power to direct overall strategy; and to
set aside, reverse or modify plans and actions of the contractor. The idea of full control is similar to that which is exercised by the board of directors of a

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BERNARDO (NAT RES) Philippine Mining Act RA7942

private corporation, the performance of managerial, operational, financial, marketing and other functions may be delegated to subordinate officers or
given to contractual entities, but the board retains full residual control of the business.
MINERS ASSOC. V FACTORAN
the principle that the power of administrative officials to promulgate rules and regulations in the implementation of a statute is necessarily limited only
to carrying into effect what is provided in the legislative enactment.
The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute.
there is no clear showing that respondent DENR Secretary has transcended the bounds demarcated by Executive Order No. 279 for the exercise of his
rule-making power tantamount to a grave abuse of discretion. Section 6 of Executive Order No. 279 specifically authorizes said official to promulgate
such supplementary rules and regulations as may be necessary to effectively implement the provisions thereof.
Doctrine of Primary JXDN:The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized
training and knowledge of the proper administrative bodies, relief must first be obtained in an administrative proceeding before a remedy is supplied by
the courts even if the matter may well be within their proper jurisdiction.
Doctrine of Exhaustion of Administrative Remedies:presumption that the administrative agency, if afforded a complete chance to pass upon the matter,
will decide the same correctly. There are both legal and practical reasons for the principle. The administrative process is intended to provide less
expensive and more speedy solutions to disputes. Where the enabling statute indicates a procedure for administrative review and provides a system of
administrative appeal or reconsideration, the courts for reasons of law, comity, and convenience will not entertain a case unless the available
administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed
in the administrative forum.
IV.
Section 8. 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 upon the recommendation of the Director, promulgate such rules 10
and regulations as may be necessary to implement the intent and provisions of this Act.
Section 9. Authority of the Bureau. - The Bureau shall have direct charge in the administration and disposition of mineral lands and mineral resources
and shall undertake geological, mining, metallurgical, chemical, and other researches as well as geological and mineral exploration surveys. The
Director shall recommend to the Secretary the granting of mineral agreements to duly qualified persons and shall monitor the compliance by the
contractor of the terms and conditions of the mineral agreements. The Bureau may confiscate surety, performance and guaranty bonds posted through
an order to be promulgated by the Director. The Director may deputize, when necessary, any member or unit of the Philippine National Police, barangay,
duly registered nongovernmental organization (NGO) or any qualified person to police all mining activities.

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BERNARDO (NAT RES) Philippine Mining Act RA7942

Section 66. Mine Inspection. - The regional director shall have exclusive jurisdiction over the safety inspection of all installations, surface or
underground, in mining operations at reasonable hours of the day or night and as much as possible in a manner that will not impede or obstruct work in
progress of a contractor or permittee.
DAO 96-40 Sec. 8 Role of Local Government:
To ensure that relevant laws on public notice, public consultation and public participation are complied
To receive their share as provided for by law in the wealth generated from the utilization of mineral resources and thus enhance economic progress and
national development;
d. To facilitate the process by which the community shall reach an informed decision on the social acceptability of a mining project as a requirement for
securing an Environmental Compliance Certificate (ECC);
e. To participate in the monitoring of any mining activity as a member of the Multipartite Monitoring Team referred to in Section 185 hereof; 196
f. To participate as a member of the Mine Rehabilitation Fund Committee as provided for in Sections 182 to 187 hereof;
g. To be the recipient of social infrastructure and community development projects for the utilization of the host and neighboring communities in
accordance with Chapter XIV hereof;
h. To act as mediator between the Indigenous Cultural Community(ies) and the Contractor(s) as may be requested; i. To coordinate with the
Department and Bureau in the implementation of the Act and these implementing rules and regulations in their respective jurisdictions.
V. CLASSES OF LANDS WHERE MINING ACTIVITIES ARE NOT ALLOWED
Section 19. Areas Closed to Mining Applications. - Mineral agreement or financial or technical assistance agreement applications shall not be allowed:
(a) In military and other government reservations, except upon prior written clearance by the government agency concerned;
(b) Near or under public or private buildings, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or
other infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or
private entity concerned;
(c) In areas covered by valid and existing mining rights;
(d) In areas expressly 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 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, Department Administrative Order No. 25, series of 1992 and other laws.
AREA OPENED FOR MINING
DAO 96-40

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BERNARDO (NAT RES) Philippine Mining Act RA7942

SEC 15 (B):
1. Military and other Government Reservations, upon prior written clearance by the Government agency 202 having jurisdiction over such Reservations;
2. Areas near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs,
dams or other infrastructure projects, public or private works, including plantations or valuable crops, upon written consent of the concerned
Government agency or private entity subject to technical evaluation and validation by the Bureau;
3. Areas covered by FTAA applications which shall be opened for quarry resources mining applications pursuant to Section 53 hereof upon the written
consent of the FTAA applicants, except for sand and gravel applications which shall require no such consent;
4. Areas covered by small-scale mining under R.A. No. 7076/P.D. No. 1899 upon prior consent of the small-scale miners, in which case a royalty
payment, upon the utilization of minerals, shall be agreed upon by the concerned parties and shall form a Trust Fund for the socioeconomic
development of the concerned community; and
5. DENR Project Areas upon prior consent from the concerned agency.
CASES:
PNOC v VENERACION
Even if it were to be assumed that the respondent failed to comply with these requirements, this would not be fatal to his cause since he filed his MPSA
on 31 July 1992, after the issuance of Proclamation No. 890; therefore, the provisions on the application of mining rights over government reservations
would no longer apply to him because Block 159 was already converted into a mineral reservation, wherein a different set of rules would apply. The only
effect of his failure to comply with the requirements CMAO on government reservations is that he loses the preferential right over the area involved. In
this case, the respondent was the only applicant to the mining rights over Block 159, apart from the petitioner who was not qualified for failure to
comply with the legal requirements. Proclamation No. 890 specifically provides that Executive Order No. 279 should be applied. Records indicate that
the provisions of Executive Order No. 279 have been complied with.
VI. Who has priority over natural resources within ancestral domains? The ICCs/IPs shall have priority rights in the harvesting, extraction,
development or exploitation of any natural resources within the ancestral domains. A non-member of the ICCs/IPs concerned may be allowed to take
part in the development and utilization of the natural resources for a period of not exceeding twenty-five (25) years renewable for not more than
twenty-five (25) years, provided that a formal and written agreement is entered into with the ICCs/IPs concerned or that the community, pursuant to
its own decision making process, has agreed to allow such operation.
VII. RA 7942
(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 mining, 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.

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BERNARDO (NAT RES) Philippine Mining Act RA7942

LA BUGAL BLAAN v RAMOS

The crux of the controversy is the amount of discretion to be accorded the Executive Department, particularly the President of the Republic, in respect
of negotiations over the terms of FTAAs, particularly when it comes to the government share of financial benefits from FTAAs.The Court believes that it
is not unconstitutional to allow a wide degree of discretion to the Chief Executive, given the nature and complexity of such agreements, the humongous
amounts of capital and financing required for large-scale mining operations, the complicated technology needed, and the intricacies of international
trade, coupled with the States need to maintain flexibility in its dealings, in order to preserve and enhance our countrys competitiveness in world
markets.
VIII.SMALL SCALE MINING
DIPIDIO v GOZON
The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to the
government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure. The government then acquires
ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully
implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired
other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from violating
the Anti-Dummy Law.
There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in expropriating
private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation.

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BERNARDO (NAT RES) Philippine Mining Act RA7942