New mining rules take effect Oct. 25

Rappler.com

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The revised implementing rules and regulations (IRR) of the new mining policy of the Aquino government was published on October 10 and will take effect 15 days after

MANILA, Philippines – The contentious mining rules are already final and will take effect starting October 25.

The revised implementing rules and regulations (IRR) of the new mining policy of the Aquino government was published on October 10 and will take effect 15 days after, Mines and Geoscience Bureau (MGB) director Leo Jasareno stressed in a phone interview over the weekend.

The mining council revised the IRR  after mining firms slammed the original rules as “patently illegal.” After the revisions were announced in September 24, the miners asked for further clarification, saying the revisions are “ambiguous.”

Jasareno said that the mining industry can still seek clarifications on the IRR “but for now, the published IRR is for implementation.”

Jasareno presented the revised mining rules in a forum for fund managers in Makati on October 12. “There is now a general consensus that the rules are now clearer,” he told them.

Last October 8, Environment Secretary Ramon Paje signed Administrative Order No. 2012-07-A, which introduced the amendments to the IRR. Final revisions were made on Sections 3, 7 and 9 of the mining rules.

The original IRR was supposed to take effect on Sept. 29 but was suspended on Sept. 28.

Revisions

Section 7 imposes a no-new-mining-contract scheme until a law rationalizing the revenue sharing scheme between the government and mining firms have taken effect.

This section was re-worded to address the concerns of cement companies that may experience production shortfall if they would not be able to expand their quarry areas.

The revised Section 7 states: “No new mineral agreements shall be entered into until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect: Provided, that no expansion of existing contract areas shall be allowed by the DENR Secretary unless there is imminent and/or threatened economic disruption, such as a shortage of critical commodities and raw materials, that could adversely affect priority government projects and/or economic activities as determined by the Economic Development Cabinet Cluster: provided, further that the National Government-Owned Mining Assets may be subject to the Financial or Technical Assistance Agreement (FTAA) in accordance with Section 9 of these implementing rules and regulations.”  

No automatic renewal


Malacañang, however, stood firm on its stand on the most contentious of the IRR provisions: the mining term.

Despite mining firms’ threat that it would sue the government over Section 9 of the IRR for imposing a no-automatic-renewal of mining permits after the first 25 years of operations, Malacañang maintained that there will be a renegotiation of terms for the second 25-year contract term ““under new terms and conditions.”

This revision states that mining contracts shall be renewed “subject to existing laws, rules, and regulations at the time of renewal.”
 The renegotiation comes before the miner concludes its first 25 years.

Mining firms said this cut their 50-year maximum contract term to half, and will immediately impact their cash flow and loan agreements.

The revised Section 9 of the IRR states: “Section 2, Article XII of the Constitution provides that the exploration, development, and utilization of natural resources shall be under the full control of the State, Thus, the grant of mining right and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the government and all expired tenements, shall be undertaken through competitive public bidding. The mining contract/agreement that may be renewed shall be subject to existing laws, rules and regulations at the time of renewal: Provided, that mining contractors whose tenements are expiring from 01 September 2012 to 30 April 2013, shall be given thirty (30) calendar days from the effectivity of these implementing rules and regulations to file renewal applications: Provided, further, that those mining contractors whose tenements expire after 30 April 2012, shall file their renewal application not later than six (6) months prior to the expiry of their mining contract/agreements.”

Section 3, which covers the definition of terms, was revised to include the definition of expiring
mining contracts.

It reads: “Expired mining tenements” refer to mining contract/agreements whose 25- or 50-year term has lapsed. Provided, that in the case of the initial 25-year term, the mining contract/agreement shall be considered expired if the parties concerned fail to agree on the terms of the renewal pursuant to Sections 32 and 38 ofR.A. No. 7942, the Philippine Mining Act of 1995, and other pertinent laws.” – Rappler.com


Read the Blog on the 2012 Mining Conference for a blow-by-blow account of issues being discussed.

For the existing mining contracts in the Philippines, view this #WhyMining map.

How does mining affect you? Are you pro or against mining? Engage, discuss & take a stand! Visit Rappler’s #WhyMining microsite for the latest stories on issues affecting the mining sector. Join the conversation by emailing whymining@rappler.com your views on the issue.

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