AMENDMENTS TO DEPARTMENT ADMINISTRATIVE ORDER NO. 96-40 OR THE “REVISED IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 7942, OTHERWISE KNOWN AS THE ‘PHILIPPINE MINING AC…

Pursuant to Section 8 of Republic Act No. 7942, otherwise known as
the “Philippine Mining Act of 1495” and Section 275 of Department
Administrative Order (DAO) No 96-40 entitled “Revised Implementing Rules
and Regulations of Republic Act No. 7942, Otherwise Known as the
‘Philippine Mining Act of 1995′”, and in line with the policy of the
Government to continuously provide for a responsive regulatory
framework, DAO No. 96-40 is further revised as follows:

Section 1. Clause b.3 of Section 15 (Areas Closed to Mining
Applications) is hereby amended, allowing the acceptance of Sand and
Gravel Permit Applications without the consent of prior mining
applicants except within Mineral Agreement (MA) applications for sand,
gravel and alluvial gold, to read as follows:

“xxx

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: Provided, That
sand and gravel permit applications shall not require consent from the
FTAA, Exploration Permit or Mineral Agreement applicant except for
Mineral Agreement or Exploration Permit applications concerning sand
gravel and/or alluvial gold; Provided, further, That the Director ,shall
formulate the necessary guidelines to govern this provision;

xxx

Section 2. Section 18 (Term/Maximum Areas Allowed under an
Exploration Permit) is hereby amended to provide for a maximum term of
six (6) years for nonmetallic minerals exploration and eight (8) years
for metallic minerals exploration, to read as follows:

“The term of an Exploration Permit shall be for a period of two
(2) years from date of issuance thereof, renewable for like periods but
not to exceed a total term of six (6) years for nonmetallic minerals
exploration or eight (8) years for metallic minerals exploration.
Provided, That no renewal of Permit shall be allowed unless the
Permittee has complied with all the terms and conditions of the Permit
and has not been found guilty of violation of any provision of the Act
and these implementing rules and regulations: Provided,
further, That in cases where further exploration is warranted and on
condition that the Permittee has substantially implemented the
Exploration and Environmental Work Programs as verified by the
Bureau/concerned Regional Office, the Secretary may further grant
renewal of the Exploration Permit: Provided, furthermore, That the
Permittee shall be required to set up a performance surety equivalent to
the expenditure requirement of the Exploration and Environmental Work
Programs; Provided, finally, That the conduct of feasibility studies
shall be included during the term of the Exploration Permit.

xxx

Section 3. A new Section is hereby added to allow the transfer of Exploration Permit Applications, to read as follows:

“Section 19-A. Transfer or Assignment of Exploration Permit Application

Transfer or assignment of Exploration Permit
applications shall be allowed subject to the approval of the
Director/concerned Regional Director taking into account the national
interest and public welfare: Provided, That such transfer or assignment
shall be subject to eligibility requirements and shall not be allowed in
cases involving speculation.”

Section 4. Section 22 (Terms and Conditions of an
Exploration Permit) is hereby amended to conform with the amendments of
Section 18, to read as follows:

“An Exploration Permit shall contain the following terms and conditions:

a. x x x
b. x x x
c. The term of the Permit shall be for a period of two (2) years
from date of issuance thereof, renewable for like periods but not to
exceed a total term of six (6) years for nonmetallic minerals
exploration or eight (8) years for metallic minerals exploration:
Provided, That no renewal of Permit shall be allowed unless the
Permittee has complied with the terms and conditions of the Permit and
has not been found guilty of violation of any provision of the Act and
these implementing rules and regulations: Provided, further,
That in cases where further exploration is warranted and on condition
that the Permittee has substantially implemented the Exploration and
Environmental Work Programs as verified by the Bureau/concerned Regional
Office, the Secretary may further grant renewal of the Exploration
Permit: Provided, furthermore, That the Permittee shall be required to
set up a performance surety equivalent to the expenditure requirement of
the Exploration and Environmental Work Programs: Provided, finally,
That the conduct of feasibility studies shall be included during the
term of the Exploration Permit;
d. x x x

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Section 5. A new Section is hereby added to allow the conversion of Exploration Permit to an MA or FTAA

“Section 23-A. Conversion of Exploration Permit to Mineral Agreement or Financial or Technical Assistance Agreement

A Permittee who has conducted preliminary exploration
activities may, at its option, convert totally or partially its
Exploration Permit to a Mineral Agreement or FTAA by filing a Letter of
Intent with the Bureau prior to the expiration of the Exploration
Permit, copy furnished the concerned Regional Office. Said Letter shall
also provide therein its intention over the area that may not be covered
by the conversion to a Mineral Agreement or FTAA: Provided, That the MA
or FTAA application shall be filed with the concerned Regional Office
within thirty (30) days upon filing of the Letter of Intent: Provided,
further, That the failure of the Permittee to file the MA or FTAA
application within the prescribed period shall be construed that the
Permittee elects to continue operation until the expiration of the
Exploration Permit

Upon compliance by the Permittee with all the mandatory
requirements and upon payment of the required conversion fee, the
application for conversion shall be evaluated and approved subject to
Chapter VI and Chapter VII of DAO No. 96-40 and all other applicable
provisions of the Act and DAO No. 96-40: Provided, That the term of the
Exploration Permit shall be deducted from the terms of the
Exploration/Pre Feasibility Study/Feasibility Study Period of the
Mineral Agreement or FTAA.”

Section 6. Section 39 (Terms and Conditions of a Mineral Agreement) is hereby amended to read as follows:

“The following terms and conditions shall be incorporated in the Mineral Agreement, namely:

a. x x x
b. Representations and warranties that the Contractor has, or has
access to, all the financing and technical capability and technology
required to promptly and effectively carry out the objectives of the
Agreement with the understanding to timely utilize these resources under
its supervision pursuant to the periodic work programs and related
budgets, and when proper, providing an exploration period up to two (2)
years from date of issuance thereof, renewable for like periods but not
to exceed a total term of six (6) years for nonmetallic minerals
exploration or eight (8) years for metallic minerals exploration,
subject to annual review and approval by the Director in accordance with
these implementing rules and regulations: Provided, That in cases where
further exploration is warranted and on condition that the Contractor
has substantially implemented the Exploration and Environmental Work
Programs as verified by the Bureau/concerned Regional Office, the
Secretary may further grant renewal of the Exploration Period: Provided,
further, That the Contractor shall be required to set up a performance
surety equivalent to the expenditure requirement of the Exploration and
Environmental Work Programs: Provided, finally, That the conduct of
feasibility studies shall be included during the term of the Exploration
Period;
c. x x x

d. x x x After the exploration period and prior to or upon
approval of Declaration of Mining Project Feasibility by the Director,
the Contractor shall finally relinquish to the Government any portion of
the x x x
xxx

Section 7. A new Section is hereby added to allow the
conversion of Mineral Agreement applications to Exploration Permit
Applications

“Section 40-A. Conversion of a Mineral Agreement Application into Exploration Permit Application.

An Applicant for a Mineral Agreement may, at its
option, convert totally or partially its Mineral Agreement application
into an Exploration Permit application by filing a Letter of Intent with
the Director/concerned Regional Director without losing its priority
rights over the area. Said Letter shall also provide therein its
intention over the area that may not be covered by the conversion to an
EP application.

Upon compliance by the applicant with all the
mandatory requirements and upon payment of the required conversion fee,
the application for conversion shall be evaluated and approved subject
to Chapter V of DAO No. 96-40 and all other applicable provisions of the
Act and DAO No. 96-40: Provided, That the date of filing of the
Exploration Permit of application shall be reckoned from the date when
the Mineral Agreement application was filed.”

Section 8 . Section 42 (Temporary Exploration Permit) is hereby amended, to read as follows:

“Upon the initial evaluation by the Bureau of the
Mineral Agreement application, taking into account Area ,Status and
Clearance, financial and technical capability, Exploration and
Environmental Work Programs, proof of consultation with the concerned
community(ies), and absence of any adverse claim, protest or opposition
as certified by the concerned Panel or Arbitrator/Mines Adjudication
Board , the Director may, upon the request of the
applicant, issue a one-time non-renewable Temporary Exploration Permit
(TEP) with a term not exceeding one (1) year to undertake exploration
subject to the applicable provisions of Chapter V of these implementing
rules and regulations: Provided, That the term of the TEP shall be
deducted from the exploration period of the Mineral Agreement: Provided
further, That in the event that the Mineral Agreement application is
disapproved by the Secretary, the TEP is deemed automatically canceled.

Upon approval of the TEP, the Director shall cause the
registration of the same with the Bureau/concerned Regional Office
after payment of the required fees.”

Section 9. Section 48 (Issuance of Special Mines Permit) is hereby amended, to read as follows:

“An applicant for Mineral Agreement whose application
is valid and existing, has been granted an Area Status and Clearance,
NCIP Precondition Certification and endorsement from the concerned
Sanggunian, and has no pending mining dispute/conflict as certified by
the concerned Panel of Arbitrators/Mines Adjudication Board,
may file an application for Special Mines Permit with the
Bureau/concerned Regional Office. A Special Mines Permit (SMP) may be
issued by the Director upon clearance by the Secretary. The SMP shall be
for a period of one (1) year renewable once: Provided, That
the SMP may be further renewed depending upon the nature of the
deposit, the propriety of the mining operation, the environmental and
community relations track record of the applicant, faithful compliance
with the terms and conditions of the SMP and diligence of the applicant
in pursuing the Mineral Agreement application, subject to the approval
of the Secretary.

In cases where public welfare so requires, the
Secretary may, after verification and evaluation of the Bureau, grant
other form/s of Special Mines Permit so as to address the specific
conditions in the area concerned.

The SMP shall be granted, subject to the following conditions and requirements:

(a.) That the applicant is already operating or has completed the
development/construction stage and is ready to begin operations or has a
readily available ore for mining subject to verification by the Bureau;

(b.) That the applicant x x x
xxx

Section 10 . Section 53 (Filing
of FTAA Applications/Mandatory Requirements) is hereby amended primarily
to include a new paragraph, to read as follows:

“xxx

a. x x x
b. x x x
c. x x x
d. Prior to construction, development and/or utilization

1. Mining Project Feasibility Study;
2. Development/Construction/Utilization Work Program;
3. Approved Survey Plan of the mining area;
4. Environmental Compliance Certificate, and
5. Environmental Protection and Enhancement Program.

Provided, That any application . . .

In the approval of the Mining Project Feasibility
Study, the Director shall take into consideration, among others, the
expected life of mine, grade management, mining sequence, conservation
measures and the capability of the Project to contribute the Government
Share and to absorb the environmental and social costs.

Section 11. A new Section is hereby added to allow the
conversion of FTAA Applications to Exploration Permit Applications, to
read as follows:

“A Section 57-AConversion of a FTAA Application into Exploration Permit Application

An applicant for a FTAA may, at its option, convert
totally or partially its FTAA Application into an Exploration Permit
Application by filing a Letter of Intent with the Director/concerned
Regional Director without losing its priority rights over the applied
area Said letter shall also provide therein its intention over the area
that may not be covered by the conversion to an EP application.

Upon compliance by the applicant with all the
mandatory requirements and upon payment of the required conversion fee,
the application for conversion shall be evaluated and approved subject
to Chapter V of DAO No. 96-40 and all other applicable provisions of the
Act and DAO No. 96-40: Provided, That the date of filing of the
Exploration Permit application shall be reckoned from the date when the
FTAA application was filed.”

Section 12. Section 69 (General Provisions) is hereby amended, to read as follows:

“Quarry, sand and gravel, guano and gemstone resources in private
and/or public lands may be extracted, removed, disposed and/or utilized:
Provided, That in large-scale quarry operations involving cement raw
materials, marble, granite and sand and gravel and construction aggregates,
any Qualified Person may apply for a Mineral Agreement subject to the
applicable provisions of Chapter VI of these implementing rules and
regulations: Provided, further, That large-scale quarry
operations, including sand and gravel and lahar operations, shall
involve mechanized operation and an area not exceeding the following:

For sand and gravel, including lahar	Individual Corporation/ Partnership/ Association/ Cooperative	Twenty (20) hectares Fifty (50) hectares
For marble, granite and construction aggregates	Individual Corporation/ Partnership/ Association/ Cooperative	Fifty (50) hectares One hundred (100) hectares
For cement raw materials such as limestone, shale and limestone	Individual Corporation/ Partnership/ Association/ Cooperative	Five hundred (500) hectares One thousand(1,000) hectares

Section 13. Section 71 (Quarry Permit) is hereby amended to
provide for further qualifications in the approval of a Quarry Permit,
to read as follows:

“Any Qualified Person may apply for a Quarry Permit with the
Provincial Governor/City Mayor through the Provincial/City Mining
Regulatory Board for the extraction, removal and disposition of quarry
resources covering an area of not more than five (5) hectares, and
a production rate of not more than fifty thousand (50,000) tons
annually and/or whose project cost is not more than Ten Million Pesos
(P10,000,000.00), for a term of five (5) years from the
date of issuance thereof, renewable for like period but not to exceed a
total term of twenty-five (25) years: Provided, That application for
renewal shall be filed before the expiry date of the Permit: Provided
further, That the Permit Holder has complied with all the terms and
conditions of the Permit as provided herein and has not been found
guilty of violation of any provision of the Act and these implementing
rules and regulations: Provided, furthermore, That no Quarry Permit
shall be issued or granted on any area covered by a Mineral Agreement or
FTAA, except on areas where a written consent is granted by the Mineral
Agreement or FTAA Contractor: Provided, finally, That
existing Quarry Permits at the effectivity of this Order under which the
production rate is more than fifty thousand (50,000) tons annually
and/or whose project cost is more than Ten Million Pesos
(P10,000,000.00) shall not be renewed but shall be given preferential
right to a Mineral Agreement application which shall be evaluated and
approved in accordance with Chapter VI of DAO No. 96-40 and the
pertinent provisions of this Order.”

Section 14 . Section 118 (Basis
of Arrests and Confiscation/Seizures) is hereby amended to require
Permittees/Contractors/Permit Holders to police their Permit/Contract
areas from illegal mining

” x x x If it is found that the minerals/mineral products seized
have been mined, extracted or removed without any permit or authority
under existing mining laws, rules and regulations, final confiscation
can be effected to be followed by the filing of the complaint for theft
of minerals. The Bureau officers which include the Regional Director and
other Bureau personnel, duly authorized by the Director, DENR personnel
duly authorized by the Secretary, Permittee, Contractor, Permit Holder and other duly deputized personnel
shall have authority to arrest offenders, and confiscate/seize
illegally-sourced minerals/mineral products and the tools, equipment and
conveyance used in the commission of offense.

It shall be the primary responsibility of the Permittee,
Contractor, or Permit Holder to police the permit/contract area from any
illegal mining operations. ”

Section 15. Section 122 (Filing of Complaint) is hereby amended to conform with Section 118 as amended, to read as follows :

“The concerned Regional Office, Permittee, Contractor, Permit
Holder and/or other duly deputized personnel shall file the complaint
with the proper court for violation of Section 103 of the Act (Theft of
Minerals).

xxx”

Section 16. Section 270 (Reporting Requirements) is hereby
amended to include the submission of Marketing Contract(s)/Sales
Agreement(s), to read as follows:

“xxx

r. Marketing Contract(s)/Sales Agreement/s

The Contractor/Permit Holder shall submit to the
Director, a copy of its existing and .future marketing contract(s)/sales
agreement(s) for registration, copy furnished the concerned Regional
Director, before any sale and/or shipment of mineral product is made,
subject to the confidentiality clause. At the same time, the Contractor /
Permit Holder shall regularly inform the Director in writing of any
revisions, changes, or additions in said contract(s)/agreement(s). The
Contractor/Permit Holder shall reflect in its Monthly/Quarterly Report
on Production, Sales and Inventory of Minerals, as well as in the
Integrated Annual Report, the corresponding registration number(s) of
the marketing contract(s)/sales agreement(s) governing the export or
sale of minerals.

s. Other reports as may be required by the Director.

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Section 17. Section 271 (Fines) is hereby amended to include two (2) paragraphs to read as follows:

” x x x
Late or non-submission of any of the reports mentioned
in Section 270 hereof shall be a ground for the withholding, upon due
notice, of other pending transactions or the processing of other mining
applications of the Permittee/Contractor/Permit Holder with the Bureau
and/or concerned Regional Office.

In case of renewal applications,
Permittees/Contractors/Permit Holders shall secure a written
Certification from the concerned PMRB/Regional Director/Director as to
the timely and complete submission of the required reports.
Non-submission of said reports shall be a ground for denial of the
renewal application.

In addition, the following fines shall be imposed:

a. x x x
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Section 18. Repealing Clause .  All existing
orders, rules and regulations, memorandum circulars, directives or part
thereof, contrary or inconsistent with the provisions of this
Administrative Order, are hereby repealed, amended and/or modified
accordingly.

Section 19. Effectivity .  This Order shall take
effect fifteen (15) days after its complete publication in a newspaper
of general circulation and fifteen (15) days after registration with the
Office of the National Administrative Register.

Adopted: 27 Dec. 1999

(SGD.) ANTONIO H. CERILLES
Secretary