REPUBLIC ACT NO.

7076
.
AN ACT CREATING A PEOPLE'S SMALL-SCALE
MINING PROGRAM AND FOR OTHER PURPOSES.

Section 1. Title. — This Act shall be known as the "People's Small-scale

Mining Act of 1991."
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Sec. 2. Declaration of Policy. — It is hereby declared of the State to
promote, develop, protect and rationalize viable small-scale mining
activities in order to generate more employment opportunities and
provide an equitable sharing of the nation's wealth and natural resources,
giving due regard to existing rights as herein provided. chan robles virtual law
library

Sec. 3. Definitions. — For purposes of this Act, the following terms shall
be defined as follows:

(a) "Mineralized areas" refer to areas with naturally occurring mineral

deposits of gold, silver, chromite, kaolin, silica, marble, gravel, clay and
like mineral resources;
chan robles virtual law library
(b) "Small-scale mining" refers to mining activities which rely heavily on
manual labor using simple implement and methods and do not use
explosives or heavy mining equipment;

(c) "Small-scale miners" refer to Filipino citizens who, individually or in

the company of other Filipino citizens, voluntarily form a cooperative
duly licensed by the Department of Environment and Natural Resources
to engage, under the terms and conditions of a contract, in the extraction
or removal of minerals or ore-bearing materials from the ground;

(d) "Small-scale mining contract" refers to co-production, joint venture or

mineral production sharing agreement between the State and a small-
scale mining contractor for the small-scale utilization of a plot of mineral
land;

(e) "Small-scale mining contractor" refers to an individual or a cooperative

of small-scale miners, registered with the Securities and Exchange
Commission or other appropriate government agency, which has entered
into an agreement with the State for the small-scale utilization of a plot
of mineral land within a people's small-scale mining area;
(f) "Active mining area" refers to areas under actual exploration,
development, exploitation or commercial production as determined by the
Secretary after the necessary field investigation or verification including
contiguous and geologically related areas belonging to the same
claimowner and/or under contract with an operator, but in no case to
exceed the maximum area allowed by law;

(g) "Existing mining right" refers to perfected and subsisting claim, lease,
license or permit covering a mineralized area prior to its declaration as a
people's small-scale mining area;

(h) "Claimowner" refers to a holder of an existing mining right;

(i) "Processor" refers to a person issued a license to engage in the

treatment of minerals or ore-bearing materials such as by gravity
concentration, leaching benefication, cyanidation, cutting, sizing,
polishing and other similar activities;

(j) "License" refers to the privilege granted to a person to legitimately

pursue his occupation as a small-scale miner or processor under this
Act;chan robles virtual law library

(k) "Mining plan" refers to a two-year program of activities and

methodologies employed in the extraction and production of minerals or
ore-bearing materials, including the financial plan and other resources in
support thereof;

(l) "Director" refers to the regional executive director of the Department of

Environment and Natural Resources; and

(m) "Secretary" refers to the Secretary of the Department of Environment

and Natural Resources.

Sec. 4. People's Small-scale Mining Program. — For the purpose of

carrying out the declared policy provided in Section 2 hereof, there is
hereby established a People's Small-scale Mining Program to be
implemented by the Secretary of the Department of Environment and
Natural Resources, hereinafter called the Department, in coordination
with other concerned government agencies, designed to achieve an
orderly, systematic and rational scheme for the small-scale development
and utilization of mineral resources in certain mineral areas in order to
address the social, economic, technical, and environmental connected
with small-scale mining activities.
The People's Small-scale Mining Program shall include the following
features:
(a) The identification, segregation and reservation of certain mineral lands
as people's small-scale mining areas;
(b) The recognition of prior existing rights and productivity;

(c) The encouragement of the formation of cooperatives;

(d) The extension of technical and financial assistance, and other social
services;

(e) The extension of assistance in processing and marketing;

(f) The generation of ancillary livelihood activities; chan robles virtual law library

(g) The regulation of the small-scale mining industry with the view to
encourage growth and productivity; and

(h) The efficient collection of government revenue.

Sec. 5. Declaration of People's Small-scale Mining Areas. — The Board is

hereby authorized to declare and set aside people's small-scale mining
areas in sites onshore suitable for small-scale mining, subject to review by
the Secretary, immediately giving priority to areas already occupied and
actively mined by small-scale miners before August 1, 1987: Provided,
That such areas are not considered as active mining areas: Provided,
further, That the minerals found therein are technically and commercially
suitable for small-scale mining activities: Provided, finally, That the areas
are not covered by existing forest rights or reservations and have not been
declared as tourist or marine reserved, parks and wildlife reservations,
unless their status as such is withdrawn by competent authority.
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Sec. 6. Future People's Small-scale Mining Areas. — The following lands,
when suitable for small-scale mining, may be declared by the Board as
people's small scale mining areas:
(a) Public lands not subject to any existing right; chan robles vi
rtual law library
(b) Public lands covered by existing mining rights which are not active
mining areas; and

(c) Private lands, subject to certain rights and conditions, except those
with substantial improvements or in bona fide and regular use as a yard,
stockyard, garden, plant nursery, plantation, cemetery or burial site, or
land situated within one hundred meters (100 m.) from such cemetery or
burial site, water reservoir or a separate parcel of land with an area of ten
thousand square meters (10,000 sq. m.) or less.
Sec. 7. Ancestral Lands. — No ancestral land may be declared as a
people's small-scale mining area without the prior consent of the cultural
communities concerned: Provided, That, if ancestral lands are declared as
people's small-scale mining areas, the members of the cultural
communities therein shall be given priority in the awarding of small-scale
mining contracts.
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Sec. 8. Registration of Small-scale Miners. — All persons undertaking
small-scale mining activities shall register as miners with the Board and
may organize themselves into cooperatives in order to qualify for the
awarding of a people's small-scale mining contract.

Sec. 9. Award of People's Small-scale Mining Contracts. — A people's

small-scale mining contract may be awarded by the Board to small-scale
miners who have voluntarily organized and have duly registered with the
appropriate government agency as an individual miner or cooperative;
Provided, That only one (1) people's small-scale mining contract may be
awarded at any one time to a small-scale mining operations within one (1)
year from the date of award: Provided, further, That priority shall be given
or city where the small-scale mining area is located.

Applications for a contract shall be subject to a reasonable fee to be paid

to the Department of Environment and Natural Resources regional office
having jurisdiction over the area.chan robles virtual law library

Sec. 10. Extent of Contract Area. — The Board shall determine the
reasonable size and shape of the contract area following the meridional
block system established under Presidential Decree No. 463, as amended,
otherwise known as the Mineral Resources Development Decree of 1974,
but in no case shall the area exceed twenty hectares (20 has.) per
contractor and the depth or length of the tunnel or adit not exceeding
that recommended by the director taking into account the following
circumstances:

(a) Size of membership and capitalization of the cooperative;

(b) Size of mineralized area;

(c) Quantity of mineral deposits;

(d) Safety of miners;chan robles virtual law library

(e) Environmental impact and other considerations; and

(f) Other related circumstances.

Sec. 11. Easement Rights. — Upon the declaration of a people's small-
scale mining area, the director, in consultation with the operator,
claimowner, landowner or lessor of an affected area, shall determine the
right of the small scale miners to existing facilities such as mining and
logging roads, private roads, port and communication facilities,
processing plants which are necessary for the effective implementation of
the People's Small-scale Mining Program, subject to payment of
reasonable fees to the operator, claimowner, landowner or lessor.
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Sec. 12. Rights Under a People's Small-scale Mining Contract. — A
people's small-scale mining contract entitles the small-scale mining
contractor to the right to mine, extract and dispose of mineral ores for
commercial purposes. In no case shall a small-scale mining contract be
subcontracted, assigned or otherwise transferred.

Sec. 13. Terms and Conditions of the Contract. — A contract shall have a
term of two (2) years, renewable subject to verification by the Board for
like periods as long as the contractor complies with the provisions set
forth in this Act, and confers upon the contractor the right to mine
within the contract area: Provided, That the holder of a small-scale
mining contract shall have the following duties and obligations:

(a) Undertake mining activities only in accordance with a mining plan

duly approved by the Board;
(b) Abide by the Mines and Geosciences Bureau and the small-scale Mining
Safety Rules and Regulations;

(c) Comply with his obligations to the holder of an existing mining right;

(d) Pay all taxes, royalties or government production share as are now or
may hereafter be provided by law;

(e) Comply with pertinent rules and regulations on environmental

protection and conservation, particularly those on tree-cutting mineral-
processing and pollution control;

(f) File under oath at the end of each month a detailed production and
financial report to the Board; and

(g) Assume responsibility for the safety of persons working in the mines.

Sec. 14. Rights of Claimowners. — In case a site declared and set aside as
a people's-scale mining area is covered by an existing mining right, the
claimowner and the small-scale miners therein are encouraged to enter
into a voluntary and acceptable contractual agreement with respect to the
small-scale utilization of the mineral values from the area under claim. In
case of disagreement, the claimowner shall be entitled to the following
rights and privileges:
(a) Exemption from the performance of annual work obligations and
payment of occupation fees, rental, and real property taxes; chan robles virtual
law library
(b) Subject to the approval of the Board, free access to the contract area
to conduct metallurgical tests, explorations and other activities, provided
such activities do not unduly interfere with the operations of the small-
scale miners; and

(c) Royalty equivalent to one and one half percent (1 1/2%) of the gross
value of the metallic mineral output or one percent (1%) of the gross value
of the nonmetallic mineral output to be paid to the claimowner: Provided,
That such rights and privileges shall be available only if he is not
delinquent and other performance of his annual work obligations and
other requirements for the last two (2) years prior to the effectivity of this
Act.

Sec. 15. Rights of Private Landowners. — The private landowner or lawful

possessor shall be notified of any plan or petition to declare his land as a
people's small-scale mining area. Said landowner may oppose such plan or
petition in an appropriate proceeding and hearing conducted before the
Board.
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If a private land is declared as a people's small-scale mining area, the
owner and the small-scale mining contractors are encouraged to enter
into a voluntary and acceptable contractual agreement for the small-scale
utilization of the mineral values from the private land: Provided, That the
owner shall in all cases be entitled to the payment of actual damages
which he may suffer as a result of such declaration: Provided, further,
That royalties paid to the owner shall in no case exceed one percent (1%)
of the gross value of the minerals recovered as royalty.

Sec. 16. Ownership of Mill Tailings. — The small-scale mining contractor

shall be the owner of all mill tailings produced from the contract area. He
may sell the tailings or have them processed in any custom mill in the
area: Provided, That, if the small-scale mining contractor decide to sell its
mill tailings, the claimowner shall have a preemptive right to purchase
said mill tailings at the prevailing market price.

Sec. 17. Sale of Gold. — All gold produced by small-scale miners in any
mineral area shall be sold to the Central Bank, or its duly authorized
representatives, which shall buy it at prices competitive with those
prevailing in the world market regardless of volume or weight.
The Central Bank shall establish as many buying stations in gold-rush
areas to fully service the requirements of the small-scale minerals
thereat.

Sec. 18. Custom Mills. — The establishment and operation of safe and
efficient customs mills to process minerals or ore-bearing materials shall
be limited to mineral processing zones duly designated by the local
government unit concerned upon recommendation of the Board.

In mining areas where the private sector is unable to establish custom

mills, the Government shall construct such custom mills upon the
recommendation of the Board based on the viability of the project.

The Board shall issue licenses for the operation of custom mills and other
processing plants subject to pollution control and safety standards.

The Department shall establish assay laboratories to cross-check the

integrity of custom mills and to render metallurgical and laboratory
services to mines.

Custom mills shall be constituted as withholding agents for the royalties,

production share or other taxes due the Government.

Sec. 19. Government Share and Allotment. — The revenue to be derived

by the Government from the operation of the mining program herein
established shall be subject to the sharing provided in the Local
Government Code.

Sec. 20. People's Small-scale Mining Protection Fund. — There is hereby

created a People's Small-scale Mining Protection Fund which shall be
fifteen percent (15%) of the national government's share due the
Government which shall be used primarily for information dissemination
and training of small-scale miners on safety, health and environmental
protection, and the establishment of mine rescue and recovery teams
including the procurement of rescue equipment necessary in cases of
emergencies such as landslides, tunnel collapse, or the like.

The fund shall also be made available to address the needs of the small-
scale miners brought about by accidents and/or fortuitous events.

Sec. 21. Rescission of Contracts and Administrative Fines. — The

noncompliance with the terms and conditions of the contract or violation
of the rules and regulations issued by the Secretary pursuant to this Act,
as well as the abandonment of the mining site by the contractor, shall
constitute a ground for the cancellation of the contracts and the
ejectment from the people's small-scale mining area of the contractor. In
addition, the Secretary may impose fines against the violator in an
amount of not less than Twenty thousand pesos (P20,000.00) and not
more than One hundred thousand pesos (P100,000.00). Nonpayment of
the fine imposed shall render the small-scale mining contractor ineligible
for other small-scale mining contracts.chan robles virtual law library

Sec. 22. Reversion of People's Small-scale Mining Areas. — The Secretary,

upon recommendation of the director, shall withdraw the status of the
people's small-scale mining area when it can no longer feasibly operated
on a small-scale mining basis or when the safety, health and
environmental conditions warrant that the same shall revert to the State
for proper disposition.

Sec. 23. Actual Occupation by Small-scale Miners. — Small-scale miners

who have been in actual operation of mineral lands on or before August 1,
1987 as determined by the Board shall not be dispossessed, ejected or
removed from said areas: Provided, That they comply with the provisions
of this Act.

Sec. 24. Provincial/City Mining Regulatory Board. — There is hereby

created under the direct supervision and control of the Secretary a
provincial/city mining regulatory board, herein called the Board, which
shall be the implementing agency of the Department, and shall exercise
the following powers and functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;
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(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale

mining;

(e) Settle disputes, conflicts or litigations over conflicting claims within a

people's small-scale mining area, an area that is declared a small-mining;
and

(f) Perform such other functions as may be necessary to achieve the goals
and objectives of this Act.

Sec. 25. Composition of the Provincial/City Mining Regulatory Board. —

The Board shall be composed of the Department of Environment and
Natural Resources representative as Chairman; and the representative of
the governor or city mayor, as the representative of the governor or city
mayor, as the case may be, one (1) small scale mining representative, one
(1) big-scale mining representative, and the representative from a
nongovernment organization who shall come from an environmental
group, as members.
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The representatives from the private sector shall be nominated by their
respective organizations and appointed by the Department regional
director. The Department shall provide the staff support to the Board. chan
robles virtual law library

Sec. 26. Administrative Supervision over the People's Small-scale Mining

Program. — The Secretary through his representative shall exercise direct
supervision and control over the program and activities of the small-scale
miners within the people's small-scale mining area.

The Secretary shall within ninety (90) days from the effectivity of this Act
promulgate rules and regulations to effectively implement the provisions
of the same. Priority shall be given to such rules and regulations that will
ensure the least disruption in the operations of the small-scale miners.

Sec. 27. Penal Sanctions. — Violations of the provisions of this Act or of

the rules and regulations issued pursuant hereto shall be penalized with
imprisonment of not less than six (6) months nor more than six (6) years
and shall include the confiscation and seizure of equipment, tools and
instruments.

Sec. 28. Repealing Clause. — All laws, decrees, letters of instruction,

executive orders, rules and regulations, and other issuances, or parts
thereof, in conflict or inconsistent with this Act are hereby repealed or
modified accordingly.

Sec. 29. Separability Clause. — Any section or provision of this Act which
may be declared unconstitutional shall not affect the other sections or
provisions hereof.

Sec. 30. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a national newspaper of general
circulation.chan robles virtual law library