ESTABLISHING SMALL-SCALE MINING AS A NEW DIMENSION IN MINERAL DEVELOPMENT.

WHEREAS, the Philippine mining industry has always been
dominated by large-scale mining operations; prevailing statutes, policies,
incentives and financing are generally addressed to the large-scale sector of
the industry; and capital intensity with high debt-equity ratio, mechanization
and heavy energy requirements characterize such type of operations, whose main
attraction is the attainment of economies of scale through low cost but large
tonnage operations;

WHEREAS, the advent of inflation, volatile commodity prices,
multiple increases of oil and fuel prices, stringent environmental control
measures and high cost of capital proved to be most disastrous for Philippine
large-scale mines;

WHEREAS, abundance of cheap labor in the Philippines,
relative flexibility and simplicity of operations, minimum capital requirements,
less fuel dependent operations and minimal effects on the environment are among
the arguments that lend support to the development of small-scale mining;

WHEREAS, there exist small mineral deposits that are being
or could be worked profitably at small tonnages requiring minimal capital
investments utilizing manual labor; and

WHEREAS, the development of these small mineral deposits
will generate more employment opportunities, thereby alleviating the living
conditions in the rural areas and will contribute additional foreign exchange
earnings;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby decree and order as follows:
SECTION 1. Small-scale
mining refers to any single unit mining operation having an annual production of
not more than 50,000 metric tons of ore and satisfying the following
requisites:

1. The working is artisanal, either open cast or shallow underground mining,
   without the use of sophisticated mining equipment;
2. Minimal investment on infrastructures and processing plant;
3. Heavy reliance on manual labor; and
4. Owned, managed or controlled by an individual or entity qualified under
   existing mining laws, rules and regulations.

SECTION 2. The holders of mining rights meeting the
conditions of the preceding section may apply at any time as small-scale mining
permittee/licensee, provided they are holders of valid and existing mining
rights, who have subsequently complied with existing mining rights, who have
subsequently complied with existing mining laws, rules and regulations before
the promulgation of this Decree. A permit or license issued for this purpose
shall be valid for two (2) years renewable for another like period.

SEC. 3. The permittee or licensee shall produce within
twelve (12) months from the date of the issuance of the permit or license and
shall submit verified periodic reports. Non-compliance with these requirements
shall result in the forfeiture of the rights granted under this Decree.

SEC. 4. The small scale mining- permittee/licensee shall,
during- the term of the permit or license, be exempt from payment of all taxes,
except income tax.

SEC. 5. The Bureau of Mines and Geo-Sciences shall provide
technical assistance, whenever feasible, as determined by the Director of Mines
and Geo-Sciences.

SEC. 6. The Director of Mines and Geo-Sciences may waive
some other requirements from other government agencies, which he may deem
unnecessary for the proper implementation of the provisions of this decree.

SEC. 7. New mining areas and/or areas covered by existing
reservations not covered by valid and existing mining claims at the time of the
promulgation of this Decree shall be governed by the implementing rules and
regulations that shall be hereinafter promulgated.
The permit area falling
under this Section, and its immediate vicinity, shall be closed to mining
location and the permittee/licensee shall have the first option to locate such
areas under other mining laws/decrees, which shall be exercised within a period
of two (2) years from the grant of the permit or license and to cover an area
equivalent to but not exceeding one meridional block.

SEC. 8. The Minister of Natural Resources, upon the
recommendation of the Director of Mines and Geo-Sciences, shall promulgate rules
and regulation to properly implement the provisions of this Decree.

SEC. 9. All laws, decrees, tetter of instructions, executive
orders, administrative orders, rules and regulations, or parts thereof, which
are inconsistent with any provisions of this Decree, are hereby repealed,
amended or modified accordingly.

SEC. 10. This Decree shall take effect immediately.

Done in the City of Manila, this 23rd, day of January, in the year of Our
Lord, nineteen hundred and eighty-four.

			(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines
	By the President:
	(Sgd.) MANUEL M. LAZARO
		Presidential Assistant for Legal Affairs