NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here
WITNESSETE:
WHEREAS, the 1987 Constitution of the Republic of the Philippines provides in Article
KI, Section 2 thereof that all lands of the public domain, waters, minerals, coal,
petroleum, and other natural resources are owned by the State and that their exploration,
development and utilization shall be under the full control and supervision ofthe State;
WHEREAS, the constitution further provides that the state may directly undertake such
activities, or it may enter into a co-Productioq Joint venture, or Mineral production
Sharing Agreement with Filipino citizens, or cooperatives, partnerships, corporations or
associations at least sixty percentum ofwhose capitalization is owned by such titizens;
WHEREAS, pursuant to Repubric Act No. 7942, otherwise known as ,.The philippine
of 1995", which took effect on 09 April 1995, the Secretary oi the
Department of Environment and Natural Resources is authorized
to enter into Minerat
Production Sharing Agreements in furtherance of the objectives
of the Government and
the Constitution to bolster the. national economy through sustainable
-d ,t;i;;;;
development and utilization of mineral lands;
Mining Act
WHEREAS' the Government desires to avail itserf
of the financiar resources, technical
appllng to the ,ild;;;;t"^
competence and skill which the Contractor is
capable of
of the project contemplated herern,
WHEREAS, the contractor desires to join and
assist the Govemment in the sustainable
development and utilization for commerciar
purposes of gord, coppcr, sirver and
other
related minerals existing h the Contract
fuea
[as
i"r.*
a.ir.Ol; .
=;q_
to all the financing,
technical competence,
technology and environmental management skills required to promptly and effectively
carry out the objectives ofthis Agreement;
WHEREAS, the Contractor has access
NOW, TIIEREFORE, for and in consideration of the foregoing premises, the mutual
covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as
follows:
SECTION I
SCOPE
This Agreement is a Mineral Production Sharing Agreement entered into pursuant
to the provisions of the Act and its implementing rules and regulations. The
primary purpose of this Agreement is to provide for the sustainable development
and commercial utilization of gold' copper, silver and other related mineral
deposits existing within the Contract Area, with all necessary services, technology
and financing to be fumished or arranged by the Contractor in accordance with the
provisions of this Agreement. The Contractor shall not, by virtue of this
Agreement, acquire any title over the Contract/IVlining Area without prejudice to
the acquisition by the Contractor of the land/surface rights through any mode of
acquisition provided for by law.
The Contractor shall undertake and execute, for and on behalf ofthe Government,
sustainable mining operations in accordance with the provisions of this Agreement,
and is hereby constituted and appointed, for the purpose of this Agreement, as the
exclusive entity to conduct mining operations in the Contract Area.
1.3
The Contractor shall assume all the exploration risk such that if no minerals in
commercial quantrty are developed and produced, it will not be entitled to
reimbursement
.
During the term of this Agreement, the total value of production and sale of
minerals derived from the mining operations contemplated herein shall be
accounted for and divided between the Government and the Contractor in
accordance with Section VIII hereof
SECTION
tr
DEFINITIONS
As used in this Agreement, the following words and terms, whether singular or plural,
shall have the following respective meaning :
2.1 "Act" refers to Republic Act No. 7942, otherwise known as the '?hilippine
Mining Act of 1995"
2.2
Agreement means this Mineral Production Sharing Agreement.
2.3
Associated Minerals mean other oreVminerals which occur together with the
principal ore./mineral.
26
2.4
Bangko Sentral means Bangko Sentral ng Pilipinas.
2.5
Budget
of expenditures to be made by Contractor in mining
operations contemplated hereunder to accomplish the Work Program for each
means an estimate
particular period.
2.6
Calendar Year or Year means a period of twelve (12) consecutive months
starting with the first day of January and ending on December 3 I , while 'Calendar
Quarter" means a period of three consecutive months with the first calendar
quarter starting with the fust day of January.
2.7
Commercial Production means the production of sufficient quantity of minerals to
sustain economic viability of mining operations reckoned from the date of
commercial operation as declared by the Contractor or as stated in the feasibility
study, whichever comes first.
2.8
Constitution or Philippine Constitution means the 1987 Constitution of the
Republic of the Philippines adopted by the Constitutional Convention of 1986 on
October 15, 1986 and ratified by the People of the Republic of the Philippines on
February 2, 1987.
2.9
Contract Area means the area onshore delineated under the Mneral Production
Sharing Agreement subject to the relinquishment obligations ofthe Contractor and
properly defined by latitude and longitude or bearing and distance
2.lO
Contract Year means a period of twelve (12) consecutive months counted from
the Effective Date of this Agreement or from the anniversary of such Effective
Date.
2.11
Contractor means Itogon - Suyoc Mincs, Inc. or its assignee or assignees of
interest under this Agreement: Provided, That the assignment of any of such
interest is accomplished pursuant to the pertinent provisions of the implementing
rules and regulations of the Act.
2.12
Declaration of Mining Feasibility means a document proclaiming the presence of
minerals in
specific site that are recoverable by socially acceptable,
environmentally safe and economically sound methods specified in the Mine
Development Plan.
2.13
Department
a
or DENR
means the Department
of
Environment and Natural
Resources.
2.14 Director
means the Director of Mines and Geosciences Bureau.
2,15
Effective Date means the date of execution of this Agreement by the Contractor
and by the Secretary on behalf of the Government. In case an Exploration
Permit/Temporary Exploration Permit had been availed of by the Contractor, the
Effective Date of this Agreement shall be the date of issuance of said Exploration
Permit/Temporary Exploration Permit.
216
Environment means all facets
of
man's surroundings: physical, ecological,
aesthetic, cultural, economic, historic, institutional and social.
2.17
Exoloration means searching or prospecting for mineral resources by geological,
geophysical and geochemical surveys, remote sensing, test pitting, trenching,
drilling, shaft sinking, tunneling, or any other means for the purpose of determining
the existence, exent, quality, and quantity of mineral resources and the feasibility
of mining them for profit.
2.18
Exoloration Period shall mean the time period from the Effective Date of this
Agreement which shall be for two (2) years, renewable for like periods but not to
exceed a total term of eight (8) years subject to the pertinent provisions of the
implementing rules and regulations of the Act.
2.lg
Force Majeure means acts or circumstances beyond the reasonable control of the
Contractor including, but not limited, to war, rebellion, insurrection, riots, civil
disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with
surface owners and other labor disputes, epidemics, earthquake, storm, flood, or
other adverse weather conditions, explosion, fue, adverse action by the
Government or by any of its instnrmentality or subdMsion thereof, act of God or
any public enemy and any cause as herein described over which the affected party
has no reasonable control.
2.20
Foreign Exchange means any currency other than the currency ofthe Republic
the Philippines acceptable to the Govemment and the Contractor'
2.21
Government means the Govemment of the Republic of the Philippines or any of
of
its agencies and instrumentalities.
2.22
Gross Outout means the actual market value of the minerals or mineral products
from each mine or mineral land operated as a separate entity, without any
deduction for mining, processing, refining, transporting, handling, marketing, or
any other expenses: Provided, That if the minerals or mineral products are sold or
consigned abroad by the Contractor under C.LF. terms, the actual cost of ocean
freight and insurance shall be deducted: Provided further, That in the case of
mineral concentrates which are not traded in commodity exchanges in the
Philippines or abroad zuch as copper concentrate, the actual market value shall be
the world price quotation of the refined mineral products contained thereof
prevailing in the said commodity exchanges, after deducting the smelting ,refining,
treatment, insurance, transportation and other charges incurred in the process of
converting mineral concentrates into refined metal traded in those commodity
exchanges.
refers to work undertaken to prepare an ore body or a
mineral deposit for mining, including the construction of necessary infrastructure
and related facilities.
2.23 Mine Development
2.24
Minerals mean all naturally occurring inorganic substances in solid, liquid, gas or
any intermediate state excluding energy materials such as coal, petroleum, natural
gas, radioactive materials and geothermal energy.
2.25
Mineral Products mean materials derived from mineral ores/rocks and prepared
into marketable state by metallurgical processes which include beneficiatiorl
cyanidatiorl leaching, smelting, calcination and other similar processes.
2.26
Mining fuea means that portion of the Contract Area identified by the Contractor
as defined and delineated in a Survey Plan duly approved by the
Director/concerned Regional Director for purposes of development and/or
utilization and sites for support facilities E1E..t
I
2.27
Minin&Ooerations means mining activities involving exploratioq feasibility study,
environmental impact assessment, development, utilizatio4 mineral processing
and mine rehabilitation
2.28 Notice means notice
in writing telex or telecopy (authenticated by answer back
or confirmation received) addressed or sent as provided in Section 16.2 of this
Agreement.
2.29 Ore
means naturally occurring substance or material from which a mineral or
element can be mined and/or processed for profit.
2.30 Pollution
means any alteration of the physical, chemical and/or biological
properties of any water, air and/or land resources of the Philippines, or any
discharge thereto of any liquid, gaseous or solid wastes or any production of
unneoessary noise or any emission of objectionable odor, as will or is likely to
create or render such water, air, and land resources harmful, detrimental or
injurious to public health safety or welfare or which will adversely afflect their
utilization for domestic, comrnercial, industrial, agricultural, recreational or other
legitimate purposes.
2.31
Secretary means the Secretary of the Department of Environment and Natural
Resources.
2.32 State
means the Republic of the Philippines.
2.33 Work Program
means a document which presents the plan of major mining
operations and the corresponding expenditures of the Contractor in its Contract
Area during a given period of timg including the plan and expenditures for
development of host and neighboring communities and of local geoscience and
mining technology, as submitted and approved
accordance with the
implementing rules and regulations of the Act.
in
SECTION
trI
TERM OF AGREEMENT
This Agreement shall have a term of twenty-five (25) years from Effective Date,
and may be renewed thereafter for another term not exceeding twenty five (25)
years. The renewal of this Agreement, as well as the changes in the terms and
conditions thereof, shall be upon mutual consent by the parties. In the event the
Government decides to allow mining operations thereafter by other Contractor,
this must be through competitive public bidding. After due publication of notice,
the Contractor shall have the right to equal the highest bid upon reimbursement of
all reasonable expenses of the highest bidder.
=5l\
SECTION IV
CONTRACT AREA
Size, Shape, and Location of Contract Area. This Age€ment covers a total area
ofone thousand seven hundred twenty eight and 8535/10000 hectares (1,728.8535
has.), situated at Mankayan, Benguet and bounded by the following technical
description (please refer to ANNEX'ts" - l:50,000 scale Location Map/Sketch
Plan):
Tie Point: S 48'23' W, 640.39 meters to Comer No.
Mankayan, Benguet
I
from BLBM No.
l,
Suyoc,
5.
1
The Contractor shall commence Exploration
Timetable for Exploration
activities not later than three (3) months after the Effective Date for a period of
two (2) years, renewable for like periods but not to exceed a total term of eight
(8) years, subject to annual review and approval by the Director to evaluate
compliance with the terms and conditions of this Agreement: Provided, That
further renewal may be granted by the Secretary under circumstances as defined in
the implementing rules and regulations of the Act.
In
case where
a Temporary Exploration Permit was issued, the Period of
Temporary Exploration Permit shall be included as part
such
of the Exploration Period
of this Agreement.
5.2
Work Programs and Budgets - The Contractor shall strictly comply with the
approved Exploration and Environmental Work Programs together with their
corresponding Budgets (please refer to ANNEXES 'C" and 'D").
The amount to be spent by the Cootractor in conducting exploration activities
under the terms of this Agreement during the Exploration Period shall be in the
aggreBate of not less than that specified for each ofthe Contract Years, as follows:
For the Exploration Work Program:
In the event of edension ofthe Exploration Period, the amount to be spent every
year shall first be agreed upon by the parties.
In the event of termination ofthis Agreement, the Contractor shall only be obliged
to expend the pro-rata amount for the period of such Contract Year prior to
termination, If during any Contract Year, the Contractor should expend more than
the amount to be expended as provided above, the excess may be subtracted from
the amount required to be expended by the Contractor during the succeeding
Contract Years, and should the Contractor, due to unforeseen circumstances or
with the consent ofthe Government, expend less during a year, then the deficiency
shall be applied to the amount to be expended during the succeeding Contract
Years.
Relinquishment of Total/Portion of the Contract Area - During the Exploration
Period, the Contractor may relinquish totally or partially the original Contract
Area. After the Exploration Period and prior to or upon approval of the
Declaration of Mining Project Feasibility, the Contractor shall finally relinquish any
portion ofthe Contract Area not necessary for mining operations and not covered
by any Declaration of Mning Project Feasibility.
-F...
Survey of the Contract Area - The Contractor shall cause the survey of the
perimeter of the Contract Area through an application for survey, complete with
requirements, filed with the concerned Regional Office simultaneous with the
submission of the Declaration of Mining Pdect Feasibility. Survey retums shall
be submitted to the concerned Regional Director for approval within one (l) year
from receipt of the Order of Survey complete with the mandatory requirements
stated in the implementing rules and regulations of the Act.
Declaration of Mining Project Feasibility - During the Exploration Period, the
Contractor shall submit to the Director through the concerned Regional Director, a
Declaration of Mining Project Feasibility together with a Mning Project Feasibility
Study, a Three (3)-Year Development and Construction or Commercial Operation
Work Progranr, a complete geologic report of the area and an Environmental
Compliance Certificate. The Mining Project Feasibility Study and Work Program
are subject to approval by the Director.
Failure of the Contractor to submit a Declaration of Mining Project Feasibility
during the Exploration Period shall be considered a substantial breach of this
Agreement.
Reporting
a)
Periodic Reports - During the Exploration Period, the Contractor shall
submit to the Director tkough the concerned Regional Drector, quarterly
and annual accomplishment reports under oath on all activities conducted in
the Contract Area from the Efiective Date of this Agreement. The quarterly
report shall be submitted not later than fifteen (15) days at the end of each
Calendar Quarter while the annual accomplishment report shall be submined
not later than thirty (30) days from the end of each Calendar Year. Such
information shall include detailed financial expenditures, raw and processed
geological, geochemical, geophysical and radiometric data plotted on a tnap
at a minimum l:50,000 scale, copies of originals of assay results, duplicated
samples, field dat4 copies of originals from drilling reports, maps,
environmental work program implementation and detailed expenditures
showing discrepancieVdeviations with approved exploration and
environmental plans and budgets as well as all other information of any kind
collected during the exploration activities. All information submitted to the
Bureau shall be subject to the confidentiality clause ofthis Agreement.
b)
Final Report
- The Contractor
shall submit to the Director through the
concemed Regional Director, a final report under oath upon the expiration of
the Exploration Period which shall be in the form and substance comparable
to published professional reports of respectable international institutions and
shall incorporate all the findings in the Contract Area including location of
samples, assays, chemical analysis, and assessment of mineral potentials
together with a geologic map of l:50,000 scale at the minimum showing the
rezults ofthe exploration. Such report shall also include detailed expenditures
incurred during the Exploration Period. In case of diamond drilling, the
Contractor shall, upon request of the Director/concemed Regional Director,
submit to the Regional Office a quarter of the core samples which shall be
deposited in the Regional Office Core Library for safekeeping and reference.
A..\
c)
-
The Contractor shall submit a separate
Relinquishment Report
relinquishment report with a detailed geologic report ofthe relinquished area
accompanied by maps at a scale of l:50,000 and results of analyses and
detailed expenditures, among others.
SECTION
VI
DEVELOPMENTAND CONSTRUCTION PERIOD
Timetable - The Contractor shall complete the development of the mine including
the construction of production facilities within thkty six (36) months from the
submission of the Declaration of Mining Project Feasibilrty, subject to such
extension based on justifiable reasons as the Director may approve, upon
recommendation of the Regional Director.
Reporting
a)
Annual - The Contractor shall submit, within sixty (60) days after December
3l of each year, to the Director through th€ concerned Regional Director, an
armual report which states the major activities, achievements and detailed
expenditures during the year covered including rnaps, assays, rock and
mineral analyses and geological and environmental reports progress during
the Development and Construction Period.
b)
Final Report - Within six (6) months from the completion of the development
and construction activities, the Contractor shall submit a final report to the
Director through the concerned Regional Director. Such report shall
integrate all information in maps of appropriate scale and quality as well as in
monographs or reports in accordance with intemational standards.
Expansion and Modification of Facilities - The Contractor may make expansions,
modifications, improvements, and replacements of the mining facilities and may
add new facilities as the Contractor may consider necessary for the operations:
Provided, That such plans shall be embodied in an appropriate Work Program
approved by the Director.
Reporting
a)
Quarterly Reports - Beginning with the first Calendar Quarter following the
commencement of the Operating Period, the Contractor shall submit, within
thirty (30) days after the end of each Calendar Quarter, to the Drector
through the concemed Regional Director, a Quarterly Report stating the
production in terms
tonnage
ores, concentrates, and their
corresponding grades and other types of products; value, destination of sales
or exports and to whom sold; terms of sales and expenditures.
of
b)
of
Annual Reports - During the Operating Period, the Contractor shall submit
within sixty (60) days from the end of each Calendar Year, to the Director
through the concerned Regional Director, indicating in sufficient detail:
b.l)
The total tonnage of ore reserves, whether proven, probable, or
inferrd the total tonnage of ores, kind by kind, broken down between
tonnage mined, tonnages transported from the minesite and their
corresponding destination, tonnages stockpiled in the mine and
elsewhere in the Philippines, tonnages sold or committed for export
(whether actually shipped from the Philippines or not), tonnages
actually shipped from the Philippines (with full details as to purchaser,
destination and terms of sale), and
known to the Contractor,
tofitages refined" processed or manufactured in the Philippines with full
specifications as to the intermediate products, by-products or final
products and ofthe terms at which they were disposed;
if
b.2) Work accomplished and work in progress at the end of the year in
question with respect to all the installations and facilities related to the
utilization prograrn, including the investment actually made or
committed;
of work force,
including management and stafr stating
particularly their nationalities, and for Filipinos, their place of origin
(i.e., barangay, towr; province, region); and
b.3) Profile
b.4) Ovmership of the Contractor, particularly with respect to nationality.
The Contractor shall also comply with other reporting requirements provided
under Section 270 of the implementing rules and regulations of the Act.
SECTION
VIII
FISCAL REGIME
8.1
General Principle - The fiscal regime of this Agreement shall be govemed by the
principle according to which the Government expects a reasonable return in
economic value for the utilization of non-renewable mineral resources under its
national sovereignty while the Contractor expects a reasonable return on its
investment with special account to be taken for the high risk of exploration, the
-=+\
I
terms and conditions prevailing elsewhere in the industry and any special efficiency
to be gained by a particularly good performance ofthe Contractor.
Registration Fees
- Within fifteen ( 15) days upon receipt of the notice of approval
ofthe MPSA from the concerned Regional Office, the Contractor shall cause the
registration of this Agreement with the said Regional Office and pay the
registration fee at the rate provided in the existing rules and regulations. Failure
of the Contractor to cause the registration of this Agreement within the prescribed
period shall be sufficient ground for cancellation ofthe same.
Occupation Fees - Prior to registration of this Agreement and at the same date
every year thereafter, the Contractor shall pay to the concemed MunicipaVCity
Treasurer an occupation fee over the Contract Area at the annual rate provided in
the existing rules and regulations. Ifthe fee is not paid on the date specified, the
Contractor shall pay a surcharge of twenty five percentum (25%) of the amount
due in addition to the occupation fees.
Share of the Govemment - The Govemment Share shall be the excise tax on
mineral products at the time of removal and at the rate provided for in Republic
Act No. 7729 amending Section 151 (a) ofthe National Internal Revenue Code, as
amended, as well as other taxes, duties, and fees levied by existing laws.
For purposes of determining the amount of the herein Govemment Share, the
Contractor shall strictly comply with the auditing and accounting requirernents
prescribed under existing laws and regulations.
The Government Share shall be allocated in accordance with Sections 290 and 292
of Republic Act No. 7160, otherwise known as "The Local Government Code of
1991".
Pricing of Sales - The Contractor shall endeavor to obtain the best achievable price
for its production and pay the lowest achievable marketing commissions and
related fees. The Contractor shall seek to strike a balance between long-term sales
comparable to policies followed by independent producers in the international
mining industry.
The Contractor shall likewise seek a balanced distribution among consumers.
Insofar as sales to Contractor's affiliates are concerned, prices shall be at arm's
length standard and competing offers for large scale and long-term contracts shall
be procured. The Bureau shall be fumished a copy of the said Sales Agreernent
subject to confidentiality between the Bureau and the Contractor.
-
Associated Minerals
If minerals other than gold copper, silver are discovered in
commercial quantities in the Contract Area, the value thereof shall be added to the
value of the principal mineral in computing the share of the Govemment.
SECTION
Ix
WORK PROGRAMS
Submission to Government - Within the periods stated herei& the Contractor shall
prepare and submit to the Director through the concemed Regional Drector, a
Work Program and corresponding Budget for the Contract Area stating the
Mining Operarions and expenditures which the Contractor proposes to carry out
-?=f.-
.../-" )
during the period covered with the details and particulars set forth elsewhere in
this Agreement or in the supporting documents.
Government's Examination and Revision of Work Program - Should the
Govemment wish to propose a revision to a certain specific feature in the Work
Program or Budget, it shall, within thirty (30) days after receipt thereo{, provide a
Notice to the Contractor speciling h reasonable detail its reasons therefor.
Promptly thereafteq the Government and Contractor will meet and endeavor to
agree on the revision proposed by the Govemment. In any event, the revision of
any portion of said Work Program or Budget in which the Government shall fail to
notiry the Contractor ofthe proposed revision shall, insofar as possible, be carried
out as prescribed herein. If the Govemment should fail within sixty (60) days from
receipt thereof to notiry Contractor of the proposed revisions, the Work Program
and Budget proposed by the Contractor shall be deemed to be approved.
Contractor's Changes to Work Program - It is recognized by the Government and
the Contractor that the details of any Work Program may require changes in the
light of changing circumstances. The Contractor may make such changes:
Provided, That it shall not change the general objective of the Work Program:
Provided further, That changes which entail a variance of at least twenty
percentum (200lo) shall be subject to the approval ofthe Director.
9.4
The Government's approval of a proposed Work Program and Budget will not be
unreasonably withheld.
SECTIoN
x
ENVIRONMENTAL PROTECTIONANDMINE SAF.ETYANDITEALTII
10.1
1
1N
The Contractor shall manage its Mining Operations in a technically, n r-"i"ffy, \
socially, culturally and environmentally responsible manner to achieve the
sustainable development objectives and responsibilities as provided for under the
implementing nrles and regulations of the Act;
10.2 The Contractor shall prepare a plan of
mining so that its damage to the
environment will be minimal. To the extent possible, control of pollution and the
transformation ofthe mined-out areas or materials into economically and socially
productive forms must be done simultaneously with mining;
10.3 The Contractor shall submit an Environmental Work Program during the
Exploration Period as prescribed in the implemorting rules and regulations of the
Act;
10.4 An
Environmental Compliance Certificate (ECC) shall be secured first by the
Contractor prior to the conduct of any development works, construction of
production facilities and/or mine production activities in the Contract Area;
10.5
The Contractor shall submit within thirty (30) Calendar days after the issuance and
receipt of the ECC, an Environmental Protection and Enhancement Program
(EPEP) using MGB Form No. 16-2 covering all areas to be affected by
development, utilization and processing activities under this Agreement. The
Contractor shall allocate for its initial environment-related capital expenditures
approximately ten percent (10%) of the total project cost or in such amount
depending on the environmentaVgeological conditioq nature and scale of
operations and technology to be employed in the Contract Area;
\
\
10.6
The Contractor shall submit, within thirty (30) days prior to the begnning of every
calendar year, an Annual Environmental Protection and Enhancement Program
(AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP.
The AEPEP shall be implemented during the year for which it was submitted. To
implement its AEPEP, the Contractor shall allocate annually three to five percent
(3%-5%)
direct mining and milling coss depending on the
environmentaVgeologic condition, nature and scale of operations and technology
employed in the Contract Area;
of its
10.7
The Contractor shall establish a Mine Rehabilitation Fund (MRF) based on the
financial requirements of the approved EPEP as a reasonable environmental
deposit to ensure satisfactory compliance with the commitments/strategies of the
EPEP/AEPEP and availability of funds for the performance of the EPEP/AEPEP
during the specific project phase. The MRF shall be deposited as Trust Fund in a
govemment depository bank and shall be used for physical and social rehabilitation
of areas afiected by mining activities and for research on the social, technical and
preventive aspects of rehabilitation;
10.8
The Contractor shall set up mitigating measures such as mine waste and mill
tailings disposal systenr, mine rehabilitation or plaq water quality monitoring, etc.
to minimize land degradation, air and water pollutioq acid rock drainage and
changes in hydrogeology;
10.9
The Contractor shall set up an Environmental and Safety Office at its minesite
manned by qualified personnel to plan, implement and monitor its approved EPEP;
10.10 The Contractor shall be responsible in the monitoring of environmental safety and
health conditions in the Contract Area and shall strictly comply with all the rules
and regulations embodied under Mines Administrative Order No. MRD-51, Series
of 1991, otherwise known as the "Revised Mine Safety Rules and Regulations";
10. I
I
The Contractor shall be responsible for the submission of a final mine rehabilitation
financial requirements and
incorporating the details and particulars set forth in the implementing rules and
regulations ofthe Act.
and/or decommissioning plans including
its
SECTION XI
RIGIITS AND OBLIGATIONS OF THE PARTMS
I
1.1
Obligations of the Contractor:
a)
To exclusively conduct sustainable Mining Operations within the Contract
Area in accordance with the provisions of the Act and its implementing rules
and regulations;
b) To construct and operate any facilities specified under the Mineral
or approved Work Program;
c)
To determine the exploratio4 mining and treatment process to be utilized in
the Mining Operations;
d)
To extract, remove, use and dispose
approved Work Program;
g(
of any tailings as authorized by
an
To
secure all permits necessary
Operations;
or desirable for the purpose of Mining
To keep accurate technical records about the mining operations as well as
financial and marketing accounts and make them available to Government
representatives authorized by the Director for the purpose of assessing the
performance and compliance of the Contractor with the terms of this
Agreement. Authorized representatives of other Government Agencies may
also have access to such accounts in accordance with existing laws, rules and
regulations;
To furnish the Bureau all the data and information gathered from
the
Contract Area and that all the books of accounts and records shall be open
for inspection;
To allow access to Government during reasonable hours in inspecting the
Contract Area and examining pertinent records for purposes of monitoring
compliance with the terms of this Agreement;
To hold the Government free and harmless from all claims and accounts of
all kinds, as well as demands and actions arising out of the accidents or
injuries to persons or properties caused by Mining Operations of the
Contractor and indemnifr the Govemment for any expenses or costs incurred
by the Govemment by reason of any such claims, accounts, demands or
actions;
In the development of the community:
j.1) To r*ognize and respect the rights, customs and traditions
"r\Y
to \
value \
indigenous cultural communities over their ancestral lands and
allocate royalty payment of not less than one percent (I%) ofthe
ofthe gross output of minerals sold,
j.2)
To coordinate with proper authorities in the development of the mining
community and for those living in the host and neighboring
communities through social infrastructure, livelihood programs,
educatior\ water, electricity and medical services. Where traditional
self-sustaining income and the community activities are identified to be
present, the Contractor shall assist in the preservation and/or
enhancement of such activities,
3)
To allot annually a minimum of one percent (1%) of the direct mining
and milling costs necessary to implement the activities undertaken in
the development of the host and neighboring communities. Expenses
for community development may be charged against the royalty
payment of at least one percent (l%) ofthe gross output intended for
the concerned indigenous cultural community;
j
j. )
To give preference to Filipino citizens who have established domicile in
the neighboring communities, in the hiring of personnel for its mining
operations. If necessary skills and expertise.tre curently not available,
the Contractor must immediately prepare and undertake a training and
recrultment program at lts expense;
EK
5)
j
To incorporate in the Mining Project Feasibility Study the planned
(. I ) to (.3) of this Section;
expenditures necessary to implement
In the development
of Mining Technology
and Geosciences:
k.1) In the course of its operations, to produce geological,
geophysical,
geochemical and other types of maps and reports that are appropriate in
scale and in format and substance which are consistent with the
intemationally accepted standards and practices. Such maps shall be
made available to the scientific community in the most convenient and
cost effective forms, subject to the condition that the Contractor may
delay release of said information for a reasonable period of time which
shall not exceed tkee (3) years;
k.2) To
systematically keep the data generated from the Contract/Mining
Area such as cores, assays and other related informatiorl including
economic and financial data and make them a@essible to students,
researchers and other persons responsible for developing mining,
geoscience and processing technology subject to the condition that the
Contractor may delay release of data to the science and technology
community within a reasonable period of time which shall not exceed
three (3) years;
k
3) To transfer to the Govemment or local mining company the
appropriate technology it may adapt in the exploration, development
and commercial utilization of the minerals in the Contract
Are4
k.4) To allocate
research and development budget for the advancement of
mining technology and geosciences in coordination with the Bureau,
research institutions, acaderne, etc. ;
k.5) To replicate
data, maps and reports cited in (k.1) and (k.2) and furnish
the Bureau for archiving and systematic safekeeping which shall be
made available to the science and technology community for
conducting research
and undertaking other activities which contribute to the development of
mining, geoscience and processing technology and the corresponding
national pool of manpower talents: Provided, howevel that the release
of dat4 maps and the like shall be similarly constrained in accordance
with (k. I ) and (k.2) above;
incorporate in the Mning Project Feasibility Study the planned
expenditures necessary to implement all the plans and programs set forth in
this Agreement; and
To
m)
To pay all other taxes and fees mandated by existing laws, nrles
and
regulations.
11.2
Rights ofthe Contractor
The Contractor shall have the right:
a)
To conduct Mining Operations within the confines of its Contract/Mining
Area in accordance with the terms and conditions hereof and that it shall not
interfere with the rights ofother ContractorylesseeVOp eratorcl
lgrnlttees:
Of
ofthe Contract Are4 with full right of ingress and egress and
the right to occupy the same, subject to surface and easement rights;
possession
To use and have access to all declassified geological, geophysical, drilling,
production and other data relevant to the mining operations;
To sell, assigrr, transfer, convey or otherwise dispose of all its rights, interests
and obligations under the Agreement subject to the approval of the
Govemment;
To employ or bring into the Philippines foreigrr technical and specialized
personnel, including the immediate members of their families as may be
required in the operations of the Contractor, subject to applicable laws and
regulations: Provided, That if the employment connection of such foreign
persons with the Contractor ceases, the applicable laws and regulations on
immigration shall apply to them. Everytime foreign technologies are utilized
and where alien executives are employeq an effective program of training
understudies shall be undertaken. The alien employment shall be limited to
technologies requiring highly specialized training and experience subject to
the required approval under existing laws, rules and regulations;
To enjoy easement rights and use of timber, water and other natural
resources in the Contract Area subject to pertinent laws, rules and
regulations and the rights of third parties;
Of repatriation of capital and remittance of profits, dividends and interest on
loans, subject to existing laws and Bangko Sentral rules and regulations;
and
h)
To import when necessary all equipment, spare parts and raw materials
required in the operations in accordance with existing laws and regulations.
I
1.3
Obligation of the Govemment
The Government shall:
Ensure that the Contractor has the Govemment's full cooperation in the
exercise ofthe rights granted to it under this Agreement;
Use its best efforts to ensure the timely issuance of necessary permits and
similar authorizing documents for use of the surface of the Contract Area;
and
cooperate with the Contractor in its efforts to obtain financing
contemplated herein from banks or other financial institutions: Provided,
That such funncing arangements will in no event reduce the Contractor's
To
obligation on Govemment rights hereunder.
reasonably estimated to be required in carrying out such Mining Operations.
12.2 All materials, equipment, plant and other installations erected or placed on the
Contract Area ofa movable nature by the Contractor shall remain the properry of
the Contractor. The Contractor shall have the right to remove and re-export such
materials and equipment, plant and other installations from the Philippines, subject
to existing rules and regulations. In case of cessation of Mining Operations on
public lands occasioned by its voluntary abandonment or withdrawal, the
Contractor shall have a period of one (l) year from the time of cessation within
which to remove its improvements; otherwise, all social infrastructures and
facilities shall be tumed over or donated tax {iee to the proper government
authorities, national or local, to ensure that said infrastructures and facilities are
continuously maintained and utilized by the host and neighboring communities.
13.2
Cost and expenses of training such Filipino personnel and the Contractor's own
employees shall be included in the Operating Expenses.
13.3
The Contractor shall not discriminate on the basis of gender and shall respect the
right of women workers to participate in policy and decision-making processes
affecting their rights and benefits.
SECTION XIV
ARBITRATION
14.1
The Govemment and the Contractor shall consult with each other in good faith
and shall exhaust all available rernedies to settle any and all disputes or
disagreements arising out of or relating to the validity, interpretations,
enforceability, or performance of this Agreement before resorting to arbitration as
provided for in Section 14.2 below.
14.2
Any disagreernent or dispute which can not be settled amicably within a period of
one (1) year Aom the time the issue was raised by a Party shall be settled by a
tribunal of three (3) arbitrators. This tribunal shall be constituted as follows: one
to be appointed by the Contractor and another to be appointed by the Secretary.
persons until agreement on a mutually acceptable Chairman of the tribunal is
selected. Such arbitration shall be initiated and conducted pursuant to Republic
Act No. 876, otherwise known as the "Arbitration Act".
In any event, the a$itration shall be conducted app$ing the substantive laws of the
Republic of the Philippines.
14.3
Each party shall pay fifty percentum (50%) of the fees and expenses of the
Arbitrators and the costs of arbitration. Each party shall pay its own costs and
attorney's fee.
SECTION XV
SUSPENSION OR TERMINATION OF CONTRACT,
TAX INCENTIVf,S AND CREDITS
l5.l
This Agreement may be suspended for failure of the Contractor: (a) to comply
with any provision or requirement of the Act and/or its implementing rules and
regulations; (b) to pay taxes, fees and/or other charges demandable and due the
Government.
15.2
This Agreement terminates or may be terminated for the following causes: (a)
expiration of its ternr, whether original or renewal; (b) withdrawal from the
by the Contractor; (c) violation by the Contractor of the Agreement's
terms and conditions; (d) failure to pay tixes, feeVor charges or financial
obligations for two (2) consecutive years; (e) false statement or omission of facts
by the Contractor; and (0 any other cause or reason provided under the Act and its
implementing nrles and regulations, or any other relevant laws and regulations.
15.3 All statements made in this Agreement
shall be considered as conditions and
essential parts hereoe and any falsehood in said statements or omission of facts
which may alter, change or affect substantially the fact set forth in said statements
shall be a ground for its revocation and termination.
15.4
The Contractor may, by giving due notice at any time during the term of this
Agreement, apply for its cancellation due to causes which in the opinion of the
Contractor, render continued minhg operation no longer feasible or viable. In this
case, the Secretary shall decide on the application within thirty (30) days from
notice: Provided, That the Contractor has met all the financial, fiscal and legal
obligations.
15.5
No delay or omissions or course of dealing by the Government shall impair any of
its rights under this Agreement, except in the cas€ of a written waiver. The
Government's right to seek recourse and relief by all other means shall not be
construed as a waiver of any succeeding or other default unless the contrary
intention is reduced in writing and signed by the party authorized to exercise the
waiver.
15.6
In case of termination, the Contractor shall pay all the fees and other liabilities due
up to the end of the year in which the termination becomes effective. The
Contractor shall immediately carry out the restoration of the Contract Area in
accnrdance with good mining industry practice. __F\
15.7
The withdrawal by the Contractor from the Mineral Agreement shall not release it
from any and all financial, environmental, legal and fiscal obligations under this
Agreement;
15.8
The following acts or omission, inler alia shall constitute breach of contract upon
which the Govemment may exercise its right to terminate the Agreement:
a)
Failure of the Contractor without valid reason
Production within the period prescribed; and
b)
Failure ofthe Contractor to conduct mining operations and other activities in
accordance with the approved Work Programs and/or any modification
thereof as approved by the Director.
15.9 The Government
to
commence Commercial
may suspend and cancel tax incentives and credits
if
the
Contractor fails to abide by the terms and conditions of said incentives and credits.
SECTION XVI
OTIIER PROVISIONS
16.1 Any terms and conditions
resulting from repeal or amendment of any existing laws
or regulation or from the enactment of a law, regulation or administrative order
shall be considered a part ofthis Agreement.
16.2
Notice
A1l notices, demands and other communications required or permitted hereunder
shall be made in writing, telex or telecopy and shall be deemed to have been
given notice, in the case oftelex or telecopy, if answered back or
received, or if delivered by hand, upon receipt or ten days after being deposited
the mail, airmail postage prepaid and addressed as follows:
dul\
confirmation N
\
in \..
If to the Govemment:
THE SESRETARY
Department of Environment and Natural Resources
DENR Building , Visayas Avenue
Dilimaq Quezon City
If to the Contractor
:
TTc hESDENT
Itugon - Suyoc Mines, Inc.
7s Floor, Ortigas Building
Ortigas Avenue, Pasig City
Either party may substitute or change such address on notice thereof to the other
party
16.3
Governing Law
This Agreement and the relation between the parties hereto shall be govemed by
and construed in accordance with the laws of the Republic of the Philippines. The
Contractor hereby agrees and obliges itself to comply with the proisions of the
Act, its implementing rules and regulations and other relevant laws
and
regulations.
16.4
Suspension
a)
of Obligation
Any failure or delay on the part of any party in the perlormance of its
obligation or duties hereunder shall be excused to the extent attributable to
Force Majeure.
b) If
Mining Operations are delayed, curtailed or prevented by such Force
Majeure causes, then the time for enjoyng the rights and carrying out the
obligations thereby affected, the term of this Agreement and all rights and
obligations hereunder shall be extended for a period equal to the period
involved.
c)
16.5
The Party, whose ability to perform its obligations is affected by stch Force
Majeure causes, shall promptly give Notice to the other in writing of any
such delay or failure of performance, the expected duration thereof and its
anticipated ef[ect and shall use its efforts to remedy zuch delay, except that
neither Party shall be under any obligation to settle a labor dispute-
Amendments
This Agreement shall not be annulled amended or modified in any respect except
by mutual consent in writing ofthe herein parties.
IN WITNESS
day and
WEEREOF, the Parties hereto have executed this Agreement,
year first above written
of Environment and
atural Resources
as of the
Republic of the Philippines)
Ci4ttl
al 6a<,zn
)ss
Before me, a Notary Public for and in the City of Quezon, personally appeared HON.
ANTONIO H. CERILLES, with Community Tax Certificate No. 07460519 issued on
January 13, 2000 at Dumalinao, Zamboanga del Sur, in his capacity as Secretary of the
Department of Environment and Natural Resources, and ALBERTO M. IVIONTILLA,
me a.nd to me known to be the same persons who executed the foregoing instrument
consisting of twenty two (22) pages, including this acknowledgment page, and
acknowledged to me that the same is their voluntary acts and deeds.
IN WITNESS WHEREOF, I
JlSl
Doc.
No. d 4/L
Series
of 19 l-oo<:
ea:V'roforma\rrysa-i.doc
reYised (20-Mar".00)
day
have hereunto set my hand and affix my notarial seal, this
of l4a^,cL
I
L.ovn