THE PHILIPPINE MINING INDUSTRY - LEGAL AND ENVIRONMENTAL FRAMEWORK

1. THE PHILIPPINE MINING INDUSTRY:
LEGAL AND
ENVIRONMENTAL
FRAMEWORK,

2. Mining, in its broadest sense, the process of obtaining economic
minerals from the earth’s crust. The process includes excavations
in underground mines and surface excavations in open-pit, or open-
cut (strip) mines. In addition, recent technological developments
may soon make economically feasible the mining of metallic ores
from the seafloor. Mining normally means an operation that
involves the physical removal of rock and earth. Sand and gravel
extraction is a mining method along rivers/streams. Natural gas
(LPG), petroleum (gasoline, diesel, kerosene, gaas and asphalt),
and some sulfur (fertilizer) are products of mining.
What is Mining?

3. HISTORY OF MINING
Started on Pre-Historic Time
-----They used sharp edges of flint-stone (chert) for:
1.Animal Hunting by Spearing and Arrows
2.Cutting as a Knife

4. IMPORTANCE OF MINING
IN MODERN SOCIETY
1. Housing/Building/Hospital constructions
2. Road/Bridges/Wharfs/airports/other man-made infrastructures
3. Automobiles(vehicles)/Aircraft/Weapons/Ships Manufacturing
4. Clothes/Housewares Manufacturing
5. Vitamins/Cosmetics/Medicines Manufacturing
6. Gadgets (mobilephones, computer,ipads,tablet) Manufacturin
7. Agricultural/Aquaculture/Fishing Applications

5. MINING IS A BASIC NEED OF HUMANKIND

6. Stages of Mining Operations
1. Prospecting, or the search for mineral deposits
2. Exploration, or the work involved in assessing
the size, shape, location, and economic value of
the deposit
3. Development, or the work of preparing access
to the deposit so that the minerals can be
extracted from it
4. Exploitation, the work of extracting the
minerals.
STAGES OF MINING OPERATIONS

7. HOW CAN YOU IMAGINE THE WORLD TODAY WITHOUT MINING

8. STAGES OF MINING OPERATIONS
Stages of Mining Operations
1. Prospecting, or the search for mineral deposits
2. Exploration, or the work involved in assessing
the size, shape, location, and economic value of
the deposit
3. Development, or the work of preparing access to
the deposit so that the minerals can be extracted
from it
4. Exploitation, the work of extracting the minerals.

9. TYPES OF MINING
PERMITS/CONTRACTS
1. Mining Lease Contracts (MLCs)
2. Exploration Permits (EPs)
3. Mineral Agreements
4. Financial or Technical Assistance
Agreement
5. Mineral Processing Permit
6. Quarry Permit
7. Small-Scale Mining Permits
8. Sand and Gravel Permits
9. Ore Transport Permits

10. EXPLORATION=the testing of a number of places for natural
resources, e.g. drilling or boring/collecting soil for samples that
will be examined for possible mineral deposits. Types of
Exploration Techniques are geophysical and geochemical.
A.Geophysical(geophysics): using gravity, magnet, electricity,
seismic wave, thermal, radiation, and remote sensing.
B.Geochemical(geochemistry): soil, stream sediment, pan
concentrate (wooden pan/spiral type), botanical (geo-
botanical), water and rocks.

11.  Exploration can be undertaken only either
through an EP or an FTAA. For projects that
have concluded a Mining Project Feasibility
Study, the proponent may apply for an MPSA.
Projects that require processing only of
minerals may apply for a Mineral Processing
Permit (MPP).

12. R.A. 7942
 REVISED IMLEMENTING CODE
KNOWN AS “PHILIPPINE MINING
ACT OF 1995”
 ----------RESPONSIBLE MINING-----
 PRO-PEOPLE AND PRO-
ENVIRONMENT

13. Mining Act of 1995
1. EXPLORATION PERMITS
Allows the permittee to conduct exploration work
for a limited period only.
 With a term of two (2) years, renewable for like
periods, up to 8 yrs for metallics and 6 yrs. for non-
metallics;
 Maximum area: 16,200 hectares/province;
32,000 has in the entire country.
 Area relinquishment: 25% for the first 2 years;
Thereafter, 10% of area/year;
 Open to 100% foreign ownership;
 Priority to enter into either an MPSA or FTAA after
submission and approval of Declaration of Mining
Project Feasibility;
 Can be transferred or assigned to other qualified
individuals/corporations.

14. Mining Act of 1995
2. Mineral Agreements
a) Mineral Production Sharing Agreement
(MPSA)
Contractor has the exclusive right to conduct mining operations
within a specified contract area.
• Limited to Filipinos or Filipino-owned corporation
(Foreign equity not to exceed 40%);
• Minimum authorized capital of PhP 10 M and PhP 2.5 M paid-up
• Maximum area: 8,100 Hectares/Province; 16,000 Has for the
entire country;
• 2 years Exploration Period (renewable); 3 years Construction
and Development Period; the rest for production;
• Contract period of 25 years; renewable for another 25 years;
• Can be transferred or assigned to any qualified
individuals/corporations;
• Can be converted into an FTAA

15. TAXES AND FEES
National Government
 Income Tax = 35 % of Taxable Income;
 Excise Tax = 2 % of actual value of minerals
extracted;
 Customs Duties and Fees= prescribed under Tariff and Customs
Code
 Value Added Tax = 10 % of Purchase Value of Goods/Services;
 Capital Gains Tax = 10-20 % of the gain;
 Tax on Interest Payments to Foreign Loans = 15 % of Interest;
 Tax on Foreign Stockholders Dividends = 15 % of dividend
 Royalties, if extracted from government Mineral
Reservation = 5% of market value;
 Documentary Stamp Tax = graduated, depending on type of
business transaction
Local Government
 Local Business Tax: usually minimal, rate depends on LGU;
 Real Property Tax: Max. of 2 % on Fair Market Value of Property;
 Occupation Fee: PhP 50.00/hectare/year (for non-mineral
reservation) ; PhP 100.00/hectare/year (for mineral reservation)
 Community Tax : Approx PhP 15,000

16. Other Permits:
MINERAL PROCESSING PERMITS
 A 5-year Permit, renewable for like periods, up to a
maximum of 25 years;
 Allows both local and up to 100% foreign-owned
corporations;
 Requirement to submit adequate ore supply contract
to justify the establishment of the processing plant;
 Can be granted for cement plants, smelters and
refineries; beneficiation plants; marble cutting and
processing plants, and others of similar nature.

17. Environmental and Social Provisions
Environmental Work Program
In lieu of the ECC requirement during the exploration
period, all companies have to submit an Environmental
Work Program (EWP) to correspondingly address any
and all environmental impact that the exploration
activities may incur. This EWP has to have a definitive
financial commitment that has to be included in the
annual exploration budget of the concerned company.

18. Exploration Activity at Gerali

23. SPIRAL MACHINE FOR
PANNING

24. OLD RIVER SCOURING
NABILID CREEK

25. MITIGATION OF RIVER-SCOURING
Dumping of sand and gravel bags on scoured section near the Spiral
Scoured Section