The Mining Laws: Deciphering Philippine Mining Act of 1995

In the Philippine setting, mining plays a vital role in pouring in foreign currency by exporting processed and semi-processed mineral products and mineral ore. We cannot deny the fact that mining is a big industry that boosts the country’s economy, the Philippines’ mineral wealth is estimated at US$ 840 billion

It was in March 3, 1995 that the principal law that governs mining extraction, RA 7942, was signed into law by the then President Fidel V. Ramos. The law aims to rejuvenate the mining industry and attract more foreign investments.

This particular legislation stirred up some storm in the country as some were questioning the constitutionality of the said law. In June 19, 1995 the La Bugal- B’Laan Tribal Association questioned the constitutionality of the Mining Act and its Implementing Rules and Regulations. They were particularly asking if the provision on Foreign Technical Assistance Agreement (FTAA), which allows foreign ownership, is valid.

In January 2004, the Supreme Court ruled that some provisions of R.A. 7942 as unconstitutional but in December 2004 the Supreme Court reversed its January decision and said that “full control is not anathematic to day-to-day management, provided that the State retains the power to direct overall strategy”, hence giving the government the go-signal to issue FTAAs.

RA 7942 is an act instituting a new mineral resources exploration, development, utilization and conservation. It declares as policy that all mineral resources in public and private lands within the territory of the Republic of the Philippines are owned by the State. It provides for the definition of various terms such as (Please bear with me if I bombard you with legal definitions, these will help us understand the scope of the mining law.):

Ancestral lands which refers to all lands exclusively and actually possessed, occupied, or utilized by indigenous cultural communities in accordance with their customs and traditions since time immemorial
Bureau- refers to the Mines and Geosciences Bureau under the Department of Environment and Natural Resources
Department- the DENR
Mineral processing- the milling, beneficiation or upgrading of ores or minerals and rocks or by similar means to convert the same into marketable products.
Minerals – referring to naturally occurring inorganic substance in solid, liquid, or any state excluding energy materials such as coal, petroleum, natural gas, radioactive materials and geothermal energy.
Mineral agreement- it means a contract between the government and a contractor, involving mineral-production-sharing agreement, co-production agreement or joint-venture agreements.
Mining operations – the mining activity involving exploration, feasibility, development, utilization, and processing.
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 exclusive economic zone including archipelagic sea and contiguous zones.
9. Onshore- means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and creeks.
10. Ore- a naturally occurring substance or material from which a mineral or element can be mined and processed for profit.
11. Qualified person- means any citizen of the Philippines who has the capacity to contract or a corporation, partnership, association, or cooperative organized and authorized to engage in mining, with technical and financial capability to undertake mineral resources development with at least sixty per centum (60%) of the capital 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.