New mining policy IRR to be implemented Oct 25

By Czeriza Valencia, The Philippine Star

Posted at Oct 15 2012 09:35 AM | Updated as of Oct 15 2012 05:35 PM

MANILA, Philippines - Beginning Oct. 25, the revised implementing rules and regulations (IRR) of the new mining policy would be enforced, according to the Mines and Geoscience Bureau (MGB).

The revisions made to the IRR were published last Oct. 10.

In a phone interview over the weekend, MGB director Leo Jasareno said the mining industry can still seek clarifications on the IRR “but for now, the published IRR is for implementation.”

Last Friday, Jasareno presented the revised mining rules in a forum for fund managers in Makati.

“There is now a general consensus that the rules are now clearer,” said Jasareno.

Last Oct. 8, Environment Secretary Ramon Paje signed Administrative Order 2012-07-A, which introduced the amendments to the IRR.

Final revisions were made on Sec. 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.

Sec. 7 prohibits the issuance of new mining permits until a law rationalizing the revenue sharing scheme between the government and mining firms have taken effect.

This section was reworded to allow the expansion of mining areas where failure to expand would cause “economic dislocation.”

Taken into consideration in rewording Sec. 7 was the concern of cement companies that they may experience production shortfall if they would not be able to expand their quarry areas.

The revised Sec. 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 Sec. 9 of these implementing rules and regulations.”

Sec. 9 of the IRR was revised to remove the condition that mining companies would have to renegotiate the terms of mining contracts after the first 25 years of operations “under new terms and conditions.” The industry argued that this potentially shortens the project period from the maximum of 50 years guaranteed by the law.

The revision in this section states that mining contracts shall be renewed “subject to existing laws, rules, and regulations at the time of renewal.”

Malacañang, however, maintained that there would still be no automatic renewal of mining permits after the first 25 years of operations.

The revised Section 9 of the IRR reads: “Sec. 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 Sept. 1, 2012 to April 30, 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 April 30, 2012, shall file their renewal application not later than six months prior to the expiry of their mining contract/agreements.”

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

It states: “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, themining contract/agreement shall be considered expired if the parties concerned fail to agree on the terms of the renewal pursuant to Sec. 32 and 38 of RA No. 7942, the Philippine Mining Act of 1995, and other pertinent laws.”