Topic Overview:

FPIC (Free and prior informed consent)
Registration of Mining Businesses in the Philippines
Types of Mining Permits
Choosing the right permit for your business
Who can get a mining permit?
What happens after getting a mining permit?
Importance of Legal Compliance to environment & businesses

“Before it’s yours, it’s mined.”

Most of the things that we use and the assets that we possess are products of mining– this may be the reason why you became interested in a mining business. Now you’re wondering where and how to get started, but you encountered too many resources online and you’re now overwhelmed! Worry no more, because our team of experts here at GreenDev wrote this exactly for you to get started with your mining business without getting lost in regulations and requirements.

But First, Consent

Before anything else; consent. The first thing to do is to secure a Free and Prior Informed Consent (FPIC) from the community where you will situate your mining site. FPIC is a process where the locality is allowed to give or withhold consent for projects that may affect them. Be aware that mining areas are usually inhabited by indigenous peoples who have their ownership rights. They have priority rights in harvesting, extracting, developing, and exploiting natural resources within their ancestral domains. As you enter the mining business, you should ensure that their decisions are considered before doing any business on their land.

According to Republic Act No. 8371 or IPRA LAW, FPIC is a consensus of all members of the Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs), as determined by their respective customary laws and practices, free from any external manipulation, interference coercion, and obtained after fully disclosing the intent and scope of the activity, in a language and process understandable by the community.

The process for obtaining FPIC may be complex, but it’s a crucial step that shows respect for Indigenous Peoples. The NCIP (National Commission on Indigenous Peoples) issued detailed guidelines that include conducting a significant series of field-based investigations, community assemblies, and consensus-building. This step demands that you conduct thorough investigations, hold community meetings, and work with the community to reach an agreement. This ensures everyone understands the project and has a say in whether it moves forward. Remember, obtaining FPIC before seeking any mining permits is essential and demonstrates your commitment to responsible and ethical business practices. After going through the FPIC process, NCIP will issue a Certification Precondition for you, and then you may proceed to next steps.

Registration of Mining Businesses in the Philippines

The Philippine Mining Act of 1995 (Republic Act No. 7942) is a law that governs all mining operations in the Philippines, focusing on the rules and regulations for exploration, extraction, and environmental protection. It is essentially the playbook that ensures that all mining operations benefit everyone while also preserving the environment.

RA7942 ascertains that mining operations go through the correct process including (1) acquiring necessary permits, (2) environmental assessments, and (3) mitigation measures before, during, and after mining activities. Such permits include the following:

The law also promotes environmental protection as it requires covered businesses to secure environmental impact assessments (EIA), environmental compliance certificates (ECC) and implementation of mitigation measures to minimize adverse effects on the environment and communities.

Need expert guidance on getting permits for your mining operations? Our professionals are here to help you achieve sustainable and compliant solutions.

Should you wish to simply send an inquiry about other services including environmental engineering, geotechnical studies, consulting, EIA report preparation etc, you may do so by clicking the button below and our account manager shall get back to you within two (2) business days:

Types of Mining Permits

RA7942 covers three (3) kinds of mining rights. The right permit for you to secure depends on the stage and size of your project, the type of mineral resources that you intend to extract, and your business goals.

Permits According to Mining Project Stage

1. Exploration Permit

This allows companies or individuals to explore mining sites and assess mineral deposits. It is the first step in mining, enabling surveys and tests to determine if an area is suitable for mining. This permit ensures compliance with environmental and legal requirements during the exploration phase.

2. Mineral Production Sharing Agreement (MPSA)

This is the most common type of mining contract in the Philippines. It allows for the extraction and production of minerals, under a profit-sharing arrangement between the mining company and the government.

3. Financial or Technical Assistance Agreement (FTAA)

This agreement is for the development and utilization of mineral resources through a partnership between the government and a foreign entity that provides financial or technical assistance.

4. Mineral Agreement

Exploration Permit (EP):

Issued for the purpose of exploration activities. This is required before a company can conduct mineral exploration in a specific area. It is granted by the Department of Environment and Natural Resources (DENR).

- Duration: 2 years (extendable up to 8 years).

Financial or Technical Assistance Agreement (FTAA): This is a type of agreement that allows foreign investors to participate in the exploration, development, and utilization of mineral resources in the Philippines. This is required if the investor is a foreign entity, as FTAAs allow 100% foreign ownership in mining operations in the Philippines under certain conditions.

- Duration: 25 years (extendable up to another 25 years).

Mineral Production Sharing Agreement (MPSA): This agreement allows the holder to explore, develop, and utilize mineral resources, with the government receiving a share in the production.

- Duration: 25 years (extendable).

Joint Venture Agreement (JVA): A JVA allows two or more entities (typically a mix of private and public sectors, or between two private companies) to jointly explore, develop, and utilize mineral resources. This type of agreement is often used for large-scale mining projects where parties collaborate to share resources, risks, and profits.

- Entities Involved: Often involves the government or government-owned corporations (like the Philippine Mining Development Corporation) partnering with private companies.
- Purpose: The agreement outlines the rights, responsibilities, and profit-sharing mechanisms between the parties involved.

5. Environmental Compliance Certificate (ECC)

Before any mining operations can proceed, an Environmental Compliance Certificate (ECC) from the DENR is required. The ECC ensures that the environmental impact of the proposed mining activities is properly assessed and mitigated.

The requirement is part of the Environmental Impact Assessment (EIA) process, which evaluates the potential environmental impacts of the mining project.

6. Mining Patents

A Mining Patent is required for a successful applicant to own the land under a mining claim. It is issued after proving that the applicant has made the necessary investments, complied with environmental and social safeguards, and met other requirements.

It grants the applicant exclusive rights over the land for mineral exploration.

7. Permit to Explore

For mineral exploration, the Permit to Explore allows a permit holder to enter public and private lands to conduct exploration activities. This may be separate or part of the exploration agreement.

Permits According to Mining Project Size

1. Large-Scale Mining

In the Philippines, large-scale mining usually targets valuable minerals like gold, copper, and nickel, requiring significant investment and advanced technology. These operations are authorized through a Mineral Production Sharing Agreement (MPSA) or a Financial or Technical Assistance Agreement (FTAA). An Environmental Compliance Certificate (ECC) is also required to ensure mining projects comply with environmental standards, which is especially important in the Philippines due to its biodiversity and environmental sensitivity.

2. Small-Scale Mining

Small-scale mining is common in rural areas and often involves artisanal miners using simple tools for extraction, particularly in gold mining. These operations are legally recognized with a Small-Scale Mining Permit (SSMP), while individual miners can obtain an Artisanal Mining Permit (AMP) for gold panning. Even small-scale miners must secure an ECC to meet environmental requirements.

For more information about Small-Scale Mining, refer to the RA 7076 – People’s Small-Scale Mining Act of 1991, a law that governs small-scale mining activities.

Permits According to Minerals Mined

1. Quarrying

Quarrying, which includes extracting sand, gravel, and limestone, plays a major role in the Philippines, particularly for the construction industry. Quarry Permits and Industrial Sand and Gravel Permits (ISAG) are necessary, and as with all mining activities, an ECC is required to ensure environmental protection.

2. Coal Mining

The Philippines has coal reserves and coal mining is important for the country’s energy needs. MPSA and Exploration Permits (EP) are needed for coal exploration and extraction, along with an ECC to ensure environmental compliance.

3. Oil and Gas Mining

The Philippines also has oil and gas reserves, with offshore and onshore drilling crucial for energy production. Service Contracts and Exploration Permits (EP) are necessary for oil and gas exploration, while an ECC ensures these activities meet environmental standards.

4. Reclamation Mining

Reclamation projects are essential for urban expansion, especially in coastal areas, often requiring materials like sand and gravel. Quarry Permits and an Environmental Impact Assessment (EIA) are needed, with an ECC required to limit environmental damage.

5. Gemstone Mining

Gemstone mining, particularly for jade and diamonds, is another mining sector in the Philippines. Like large-scale mining, gemstone extraction requires MPSA for large-scale operations or SSMP for small-scale mining. An ECC is also needed to protect the environment during the extraction process.

6. Processing and Refining

After minerals are extracted, they usually need to be processed or refined. Businesses involved in this process need a Mineral Processing Permit (MPP), along with an ECC and Manufacturing Permits to ensure environmental and operational standards are met.

If you are a part of a small-scale coal mining business, you can apply for a SSCMP at any DOE Field Office through the submission of requirements subject to Technical and Legal Evaluation.

Who can get a mining permit?

Any citizen of the Philippines with the capacity to contract and; Corporations, Partnerships, Associations, or Cooperatives organized or authorized for engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law, at least sixty percent (60%) of the capital of which is owned by citizens of the Philippines.

A legally organized foreign-owned corporation may be deemed a qualified person for purposes of granting an exploration permit, financial or technical assistance agreement, or mineral processing permit. A financial or technical assistance agreement means a contract involving financial or technical assistance for large-scale exploration, development, and utilization of mineral resources.

What happens after getting a mining permit?

Now that you’re a permit holder, you are now to be imposed an Excise Tax on Mineral Products, Mine Wastes and Tailings Fees, and Occupation Fees. To elaborate, those fees mean the following:

Excise Tax on Mineral Products

applied to minerals mined and sold in the country, such as gold, silver, copper, and others. Under Philippine tax laws, particularly the National Internal Revenue Code (NIRC), mining companies pay this tax as a percentage of the gross value of the minerals extracted. It ensures that the government benefits from the country’s natural resources while promoting economic contributions from the mining industry.

Mine Wastes and Tailings Fees

payments mining companies give to the government for the waste materials they produce, such as rocks, soil, and sludge, during mining activities. These fees are meant to ensure that mining companies handle their waste responsibly and help protect the environment, as required by Philippine mining and environmental laws.

Occupation Fees

payments mining companies make to the government for using public or private land for mining activities. These fees are required under Philippine mining laws and are usually paid annually, based on the size of the area covered by the mining permit or agreement. It’s like paying rent for the land where mining takes place.

Besides that, some expenditures need to be made to assist in developing and promoting the general welfare of mining communities; and the development of science and mining technology.

Fiscal incentives

Philippines include Income Tax Holidays (ITH), where companies are exempt from corporate income tax for a period, followed by Special Corporate Income Tax (SCIT) with reduced rates. Tax and duty-free importation of equipment and accelerated depreciation are also significant benefits.

Non-fiscal incentives

This kind of incentive includes easier business registration, access to government services, priority use of public infrastructure, and support for research and development. These benefits help create a supportive environment for businesses.

Social Development and Management Program (SDMP)

A permit holder is required to submit a Social Development and Management Program (SDMP), which outlines the programs and activities for the welfare of the local communities affected by the mining operations. It focuses on community development, welfare, health, education, and environmental protection.

Mine Safety and Health Program

A Mine Safety and Health Program must be developed by mining operators to ensure the health and safety of workers. This program must meet specific regulations set by the Mines and Geosciences Bureau (MGB) under the DENR.

Rehabilitation Fund and Program

Mining operators must establish a Rehabilitation Fund and submit a Rehabilitation Program to the DENR. This program outlines the plans for rehabilitating the mining area post-operation and ensuring that environmental damage is minimized or mitigated.

Permit to Transport Minerals

A Permit to Transport Minerals is needed if the operator plans to move or transport mined materials from one location to another, ensuring compliance with applicable mining regulations.

Tax and Financial Permits

Mining companies are also subject to tax permits such as Value-Added Tax (VAT) and corporate income taxes, along with other financial regulatory requirements.

Special Use Permits

In some cases, specific Special Use Permits might be required, depending on the type of mineral and location of the mining operation.

Importance of Legal Compliance

Mining permits are vital tools for ensuring that mining operations are conducted responsibly and sustainably. By securing the required permits and adhering to regulations, businesses can help protect the environment, uplift local communities, and promote ethical practices in the industry.

Following these laws isn’t just about meeting legal requirements; it’s about making a real difference in protecting nature and improving the lives of people. Businesses that prioritize responsible mining build trust, gain respect, and position themselves as leaders in a competitive market.

Let us work together to align economic growth with environmental stewardship and community development. By adhering to legal requirements and implementing sustainable practices, mining businesses in the Philippines can secure long-term success while ensuring a positive and lasting impact on future generations.

For your easy reference, we created this summary of permits needed for mining projects and sites, in table format:

Table of Mining Permits by Size and Minerals Extracted
Category	Permit(s) Required
Large-Scale Mining	MPSA, FTAA, ECC
Small-Scale Mining	SSMP, Artisanal Mining Permit, ECC
Quarrying	Quarry Permit, ISAG, ECC
Coal Mining	MPSA, Exploration Permit, ECC
Oil and Gas Mining	Service Contracts, Exploration Permit, ECC
Reclamation Mining	Quarry Permit, ECC, EIA
Gemstone Mining	MPSA, SSMP, ECC
Processing and Refining	MPP, ECC, Manufacturing Permit

You may also watch this video from the DENR, which features their improved and digitized process for securing mining permits and related documents:

DENR to digitize, shorten permit process for mining | ANC