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MINERAL PRODUCTION
SHARING AGREEMENT
No. 209-2005-III
This<b> MINERAL PRODUCTION SHARING AGREEMENT</b> is
made and entered
into in Quezon City, Philippines, this
_______ day of APR 10, 2005 by and between:
<b>THE REPUBLIC OF THE PHILIPPINES</b>, herein referred
to as the Government, represented in this act by the Secretary of the
Department of Environment and Natural Resources, with offices at the Department
of Environment and Natural Resources Building, Visayas Avenue, Diliman, Quezon
City
and
<b>ERAMEN MINERALS, INCORPORATED</b>, a corporation
duly organized and
existing under the laws of the Republic of the
Philippines, herein referred to as
the CONTRACTOR, with office at 3RD floor, ALPAP
I Building, No. 140 Leviste
Street, Salcedo Village, Makati City and
represented in this act by its President,
ENRIQUE C. FERNANDEZ, as authorized by its Board
of Directors (please refer to ANNEX "A")
<b>WITNESSETH:</b>
WHEREAS, the 1987 Constitution of the Republic
of the Philippines provides in
Article XII, 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 of the
State;
WHEREAS, the Constitution further provides that
the State may directly
undertake such activities, or it may enter into
a Co-Production, Joint Venture, or Mineral Production Sharing Agreement
with Filipino citizens, or cooperatives, partnerships, corporations or
associations at least sixty per centum of whose capitalization is owned by
such citizens;
WHEREAS, pursuant to Republic Act No. 7942,
otherwise known as "The
Philippine Mining Act of 1995," which took
effect on 09 April 1995, the Secretary of the Department of Environment
and Natural Resources is authorized to enter into Mineral production
Sharing Agreements in furtherance of the objectives of the Government and
the Constitution to bolster the national economy through sustainable and
systematic development and utilization of mineral lands;
WHEREAS, the Government desires to avail itself
of the financial resources,
technical competence and skill, which the
contractor is capable of applying to the
MINERAL PRODUCTION
SHARING AGREEMENT
No. 209-2005-III
This<b> MINERAL PRODUCTION SHARING AGREEMENT</b> is
made and entered
into in Quezon City, Philippines, this
_______ day of APR 10, 2005 by and between:
<b>THE REPUBLIC OF THE PHILIPPINES</b>, herein referred
to as the Government, represented in this act by the Secretary of the
Department of Environment and Natural Resources, with offices at the Department
of Environment and Natural Resources Building, Visayas Avenue, Diliman, Quezon
City
and
<b>ERAMEN MINERALS, INCORPORATED</b>, a corporation
duly organized and
existing under the laws of the Republic of the
Philippines, herein referred to as
the CONTRACTOR, with office at 3RD floor, ALPAP
I Building, No. 140 Leviste
Street, Salcedo Village, Makati City and
represented in this act by its President,
ENRIQUE C. FERNANDEZ, as authorized by its Board
of Directors (please refer to ANNEX "A")
<b>WITNESSETH:</b>
WHEREAS, the 1987 Constitution of the Republic
of the Philippines provides in
Article XII, 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 of the
State;
WHEREAS, the Constitution further provides that
the State may directly
undertake such activities, or it may enter into
a Co-Production, Joint Venture, or Mineral Production Sharing Agreement
with Filipino citizens, or cooperatives, partnerships, corporations or
associations at least sixty per centum of whose capitalization is owned by
such citizens;
WHEREAS, pursuant to Republic Act No. 7942,
otherwise known as "The
Philippine Mining Act of 1995," which took
effect on 09 April 1995, the Secretary of the Department of Environment
and Natural Resources is authorized to enter into Mineral production
Sharing Agreements in furtherance of the objectives of the Government and
the Constitution to bolster the national economy through sustainable and
systematic development and utilization of mineral lands;
WHEREAS, the Government desires to avail itself
of the financial resources,
technical competence and skill, which the
contractor is capable of applying to the
<b>SECTION II</b><b>
DEFINITIONS</b>
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 "Philippine
Mining Act of 1995."
2.2. Agreement means this Mineral
Production Sharing Agreement.
2.3. Associated Minerals mean other
ores/minerals, which occur together
with the principal ore/mineral.
2.4. Bangko Sentral means Bangko Sentral ng
Pilipinas.
2.5. Budget means an estimate of expenditures to
be made by Contractor in
mining operations contemplated hereunder to accomplish the Work Program
for each particular period.
2.6. Bureau means Mines and
Geosciences Bureau.
2.7. Calendar Year or Year means a period
of twelve (12) consecutive
months starting with the first day of January
and ending on December 31,
while "Calendar Quarter" means a
period of three consecutive months with
the first calendar quarter starting with the
first day of January.
2.8. 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.
2.9. 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.
2.10. Contract Area means the area onshore or
offshore delineated under the
Mineral Production Sharing Agreement subject to
the relinquishment
obligations of the contractor and properly
defined by latitude and longitude or bearing and distance.
2.11. 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.
2.12. Contractor means Eramen Minerals
Incorporated or its assignee or
its 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.
3
2.13. Declaration of Mining Feasibility means a
document proclaiming
the presence of minerals in a specific
site, which are recoverable by socially
acceptable, environmentally safe and
economically sound methods
specified in the Mine Development Plan.
2.14. Department or DENR means the
Department of Environment and
Natural Resources
2.15. Director means the Director of
Mines and Geosciences Bureau
2.16. Effective Date means the date of
execution of this Agreement by the
Contractor and by the Secretary on behalf of the
Government
2.17. Environment means a‖ facets of man's surroundings: physical, ecological, aesthetic, cultural,
economic, historic, institutional and social
2.18. Exploration 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,
extent, quality and quantity of
mineral resources and the feasibility of mining
them for profit
2.19. Exploration Period shall mean the 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 six(6) years
for nonmetallic minerals and
eight (8) years for metallic minerals, subject
to the pertinent provisions of
the implementing rules and regulations of the
Act.
2.20 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, lock out, any dispute with surface owners
and other labor disputes, epidemics, earthquake, storm, flood or other
adverse weather conditions, explosion, fire, adverse action by the
Government or by any of its instrumentality or subdivision thereof, act of
God or any public enemy and any cause as herein described over which the
affected party has no reasonable control
2.21 Foreign Exchange means any currency
other than the currency of the
Republic of the Philippines acceptable to the
Government and the
Contractor
2.22 Government means the Government
of the Republic of the Philippines
or any of its agencies and instrumentalities
2.23 Gross Output 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.I.F. terms, the actual cost of ocean freight and
insurance shall be
4
deducted: Provided further, That in the case of
mineral concentrates which
are not traded in commodity exchanges in the
Philippines or abroad such
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.
2.24. Mine Development refers to work undertaken
to prepare an ore body or
a mineral deposit for mining, including the
construction of necessary
infrastructure and related facilities.
2.25. 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.
2.26. Mineral Products mean materials derived
from mineral ores/rocks
and prepared into marketable state by
metallurgical processes, which include
beneficiation, cyanidation, leaching, smelting,
calcination and other similar
processes.
2.27 Mining Area means that portion of
the Contract Area identified by the
Contractor as defined and delineated in a Survey
Plan duly approved by
the Director/Regional Director concerned for
purposes of development
and/or utilization and sites for support
facilities.
2.28. Mining Operations means mining activities
involving exploration,
feasibility study, environmental impact
assessment, development,
utilization, mineral processing and mine
rehabilitation.
2.29 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.
2.30. Ore means naturally occurring
substance or material from which a
mineral or element can be mined and/or processed
for profit.
2.31. 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 unnecessary 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 affect their utilization for
domestic, commercial, industrial,
agricultural, recreational or other legitimate
purposes.
2.32. Secretary means the Secretary of the
Department of Environment
and Natural Resources.
2.33. State means the Republic of the
Philippines.
5
2.34. 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 time,
including the plan and
expenditures for development of host and
neighboring communities and of
local geoscience and mining technology, as
submitted and approved in
accordance with the implementing rules and
regulations of the Act.
<b>SECTION III
TERM OF AGREEMENT</b>
3.1.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.
<b>
SECTION IV
CONTRACT AREA</b>
4.1 Size, Shape, and Location of Contract
Area - This Agreement covers a
Contract Area of approximately Four Thousand Six
Hundred Nineteen and
6968/10,000 hectares (4,619 6869 has), Situated
in Sta. Cruz and Candelaria, Zambales and bounded by the following
geographical coordinates (please refer to ANNEX "B" ‐1:50,000 scale Location Map/Sketch Plan):
Block 1
Area=99 Has
Corner Latitude Longitude
1 15° 48' 04.444" 119° 59' 19.606"
2 15° 48' 04.444" 119° 59' 59.920"
3 15° 47' 35.162" 119° 59' 59.920"
4 15° 47' 35.162" 119° 59' 29.684"
5 15° 47' 44.923" 119° 59' 29.684"
6 15° 47' 44.923" 119° 59' 19.606"
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Block 2
Area = 9 Has.
Corner Latitude Longitude
1 15° 47' 35.162" 120° 00' 30.156"
2 15° 47' 35.162" 120° 00' 40.235"
3 15° 47' 25.401" 120° 00' 40.235"
4 15° 47' 25.401" 120° 00' 30.156"
Block 3
Area=349.964 Has.
Corner Latitude Longitude
1 15° 48' 09.202" 120° 01' 43.831"
2 15° 48' 09.202" 120° 02' 41.178"
3 15° 47' 54.683" 120° 02' 41.178"
4 15° 47' 54.683" 120° 02' 51.258"
5 15° 47' 44.923" 120° 02' 51.258"
6 15° 47' 44.923" 120° 03' 21.498"
7 15° 47' 54.863" 120° 03' 21.498"
8 15° 47' 54.863" 120° 03' 31.576"
9 15° 48' 04.444" 120° 03' 31.576"
10 15° 48' 04.444" 120° 03' 41.605"
11 15° 48' 14.105" 120° 03' 41.605"
12 15° 48' 14.105" 120° 03' 51.792"
13 15° 48' 04.444" 120° 03' 51.792"
14 15° 48' 04.444" 120° 04' 21.963"
15 15° 47' 54.863" 120° 04' 21.963"
16 15° 47' 54.863" 120° 04' 11.985"
17 15° 47' 45.103" 120° 04' 11.985"
18 15° 47' 45.103" 120° 04' 01.807"
19 15° 47' 35.501" 120° 04' 01.807"
20 15° 47' 35.501" 120° 03' 51.279"
21 15° 47' 25.302" 120° 03' 51.279"
22 15° 47' 25.302" 120° 03' 41.950"
23 15° 47' 23.452" 120° 03' 41.950"
24 15° 47' 23.452" 120° 02' 54.221"
25 15° 47' 33.185" 120° 02' 54.221"
26 15° 47' 33.185" 120° 02' 34.168"
27 15° 47' 42.954" 120° 02' 34.168"
28 15° 47' 42.954" 120° 02' 24.601"
29 15° 47' 52.505" 120° 02' 24.601"
30 15° 47' 52.505" 120° 01' 50.582"
31 15° 47' 52.505" 120° 01' 43.831"
<b>BIock 4</b>
Area=108.794 Has.
Corner Latitude Longitude
1 15° 47' 15.641" 120° 03' 44.717"
2 15° 47' 15.641" 120° 04' 01.807"
3 15° 47' 25.402" 120° 04' 01.807"
4 15° 47' 25.402" 120° 04' 11.885"
5 15° 47' 35.162" 120° 04' 11.885"
6 15° 47' 35.162" 120° 04' 21.963"
7 15° 46' 56.120" 120° 04' 21.963"
8 15° 46' 56.120" 120° 04' 01.807"
9 15° 46' 46.359" 120° 04' 01.807"
10 15° 46' 46.359" 120° 03' 44.717"
<b>BIock 5</b>
Area=108.794 Has.
Corner Latitude Longitude
1 15° 44' 25.317" 119° 58' 27.110"
2 15° 44' 25.317" 119° 58' 47.214"
3 15° 44' 29.790" 119° 58' 47.214"
4 15° 44' 29.790" 120° 00' 30.687"
5 15° 46' 29.790" 120° 00' 30.687"
6 15° 46' 29.790" 120° 00' 30.156"
7 15° 46' 36.799" 120° 00' 30.156"
8 15° 46' 36.799" 120° 00' 20.077"
9 15° 46' 56.120" 120° 00' 20.077"
10 15° 46' 56.120" 120° 00' 30.156"
11 15° 47' 05.981" 120° 00' 30.156"
12 15° 47' 05.981" 120° 00' 40.235"
13 15° 46' 56.126" 120° 00' 40.235"
14 15° 46' 56.126" 120° 00' 50.314"
15 15° 47' 03.903" 120° 00' 50.314"
16 15° 47' 03.903" 120° 01' 00.323"
17 15° 46' 56.120" 120° 01' 00.323"
18 15° 46' 56.120" 120° 01' 20.550"
19 15° 47' 03.903" 120° 01' 20.550"
20 15° 47' 03.903" 120° 01' 50.786"
21 15° 46' 57.863" 120° 01' 50.786"
22 15° 46' 57.863" 120° 01' 24.220"
23 15° 46' 47.010" 120° 01' 24.220"
24 15° 46' 47.010" 120° 01' 20.550"
25 15° 46' 17.083" 120° 01' 20.550"
26 15° 46' 17.083" 120° 01' 24.220"
27 15° 45' 57.563" 120° 01' 24.220"
28 15° 45' 57.563" 120° 01' 40.710"
29 15° 45' 57.563" 120° 02' 00.867"
30 15° 45' 48.369" 120° 02' 00.867"
8
31 15° 45' 48.369" 120° 01' 53.540"
32 15° 45' 47.799" 120° 01' 53.540"
33 15° 45' 47.799" 120° 01' 50.788"
34 15° 45' 30.000" 120° 01' 50.788"
35 15° 45' 30.000" 120° 01' 30.000"
36 15° 43' 50.672" 120° 01' 30.000"
37 15° 43' 50.672" 120° 01' 18.448"
38 15° 43' 46.277" 120° 01' 18.448"
39 15° 43' 46.277" 120° 00' 58.291"
40 15° 43' 26.756" 120° 00' 58.291"
41 15° 43' 26.756" 120° 00' 38.134"
42 15° 43' 46.277" 120° 00' 38.134"
43 15° 43' 46.277" 119° 59' 27.584"
44 15° 43' 36.516" 119° 59' 27.584"
45 15° 43' 36.516" 119° 59' 17.505"
46 15° 43' 46.277" 119° 59' 17.505"
47 15° 43' 46.277" 119° 59' 57.348"
48 15° 43' 36.516" 119° 59' 57.348"
49 15° 43' 36.516" 119° 58' 47.269"
50 15° 43' 46.277" 119° 58' 47.269"
51 15° 43' 46.277" 119° 58' 37.190"
52 15° 44' 15.559" 119° 58' 37.190"
53 15° 44' 15.559" 119° 58' 27.110"
Block 6
Area = 162.053 Has.
Corner Latitude Longitude
1 15° 46' 02.192" 119° 57' 56.874"
2 15° 46' 02.192" 119° 58' 17.032"
3 15° 45' 33.641" 119° 58' 17.032"
4 15° 45' 33.641" 119° 58' 27.110"
5 15° 44' 35.078" 119° 58' 27.110"
6 15° 44' 35.078" 119° 58' 17.032"
7 15° 44' 54.599" 119° 58' 17.032"
8 15° 44' 54.599" 119° 58' 06.954"
9 15° 45' 14.120" 119° 58' 06.954"
10 15° 45' 14.120" 119° 57' 56.874"
Block 7
Area = 2,240.042 Has.
Corner Latitude Longitude
1 15° 42' 33.402" 119° 58' 43.586"
2 15° 42' 33.402" 119° 59' 03.743"
3 15° 42' 23.642" 119° 59' 03.743"
4 15° 42' 23.642" 119° 59' 13.822"
5 15° 42' 13.881" 119° 59' 13.822"
6 15° 42' 13.881" 119° 59' 23.900"
7 15° 42' 04.121" 119° 59' 23.900"
8 15° 42' 04.121" 119° 59' 33.979"
9 15° 41' 54.200" 119° 59' 33.979"
10 15° 41' 54.200" 119° 59' 44.057"
11 15° 42' 04.121" 119° 59' 44.057"
12 15° 42' 04.121" 119° 59' 54.136"
13 15° 42' 13.881" 119° 59' 54.136"
14 15° 42' 13.881" 119° 59' 44.057"
15 15° 42' 23.642" 119° 59' 44.057"
16 15° 42' 23.642" 119° 59' 33.979"
17 15° 42' 33.402" 119° 59' 33.979"
18 15° 42' 33.402" 119° 59' 23.900"
19 15° 43' 31.966" 119° 59' 23.900"
20 15° 43' 31.966" 120° 00' 34.350"
21 15° 43' 22.205" 120° 00' 34.350"
22 15° 43' 22.205" 120° 01' 04.686"
23 15° 43' 46.275" 120° 01' 04.686"
24 15° 43' 46.275" 120° 01' 18.447"
25 15° 43' 50.670" 120° 01' 18.447"
26 15° 43' 50.670" 120° 01' 34.922"
27 15° 43' 41.726" 120° 01' 34.922"
28 15° 43' 41.726" 120° 01' 55.079"
29 15° 43' 12.445" 120° 01' 55.079"
30 15° 43' 12.445" 120° 02' 05.158"
31 15° 43' 02.684" 120° 02' 05.158"
32 15° 43' 02.684" 120° 01' 55.079"
33 15° 42' 43.163" 120° 01' 55.079"
34 15° 42' 43.163" 120° 01' 45.001"
35 15° 41' 54.360" 120° 01' 45.001"
36 15° 41' 54.360" 120° 01' 34.922"
37 15° 41' 25.079" 120° 01' 34.922"
38 15° 41' 25.079" 120° 01' 45.001"
39 15° 41' 44.600" 120° 01' 45.001"
40 15° 41' 44.600" 120° 01' 55.079"
41 15° 41' 25.079" 120° 01' 55.079"
42 15° 41' 25.079" 120° 02' 15.237"
43 15° 41' 44.600" 120° 02' 15.237"
44 15° 41' 44.600" 120° 02' 25.315"
45 15° 41' 54.360" 120° 02' 25.315"
46 15° 41' 54.360" 120° 02' 05.158"
47 15° 42' 04.121" 120° 02' 05.158"
48 15° 42' 04.121" 120° 02' 15.237"
49 15° 42' 23.642" 120° 02' 15.237"
50 15° 42' 23.642" 120° 02' 45.470"
51 15° 42' 43.163" 120° 02' 45.470"
52 15° 42' 43.163" 120° 02' 55.548"
53 15° 42' 04.121" 120° 02' 55.548"
54 15° 42' 04.121" 120° 02' 45.470"
55 15° 41' 44.600" 120° 02' 45.470"
10
56 15° 41' 44.600" 120° 02' 35.394"
57 15° 41' 25.079" 120° 02' 35.394"
58 15° 41' 25.079" 120° 02' 25.601"
59 15° 41' 05.557" 120° 02' 25.601"
60 15° 41' 05.557" 120° 02' 05.158"
61 15° 40' 55.797" 120° 02' 05.158"
62 15° 40' 55.797" 120° 01' 24.844"
63 15° 40' 46.036" 120° 01' 24.844"
64 15° 40' 46.036" 120° 00' 24.372"
65 15° 41' 05.557" 120° 00' 24.372"
66 15° 41' 05.557" 120° 00' 34.350"
67 15° 41' 15.318" 120° 00' 34.350"
68 15° 41' 15.318" 120° 00' 24.372"
69 15° 41' 25.079" 120° 00' 24.372"
70 15° 41' 25.079" 120° 00' 04.215"
71 15° 41' 15.318" 120° 00' 04.215"
72 15° 41' 15.318" 120° 00' 00.000"
73 15° 41' 30.000" 120° 00' 00.000"
74 15° 41' 30.000" 119° 59' 30.000"
75 15° 42' 00.000" 119° 59' 30.000"
76 15° 42' 00.000" 119° 59' 13.822"
77 15° 42' 04.121" 119° 59' 13.822"
78 15° 42' 04.121" 119° 59' 03.743"
79 15° 42' 13.881" 119° 59' 03.743"
80 15° 42' 13.881" 119° 58' 43.586"
Block 8
Area = 36.7102 Has.
Corner Latitude Longitude
1 15° 45' 38.037" 120° 01' 50.786"
2 15° 45' 47.804" 120° 01' 50.786"
3 15° 45' 47.804" 120° 01' 53.540"
4 15° 45' 38.606" 120° 01' 53.540"
5 15° 45' 38.606" 120° 02' 03.761"
6 15° 45' 47.799" 120° 02' 03.761"
7 15° 45' 47.799" 120° 02' 10.944"
8 15° 45' 57.563" 120° 02' 10.944"
9 15° 45' 57.563" 120° 02' 13.841"
10 15° 45' 48.369" 120° 02' 13.841"
11 15° 45' 48.369" 120° 02' 23.921"
12 15° 45' 57.563" 120° 02' 23.921"
13 15° 45' 57.563" 120° 02' 30.970"
14 15° 45' 38.563" 120° 02' 30.970"
11
BIock 9
Area = 7.9248 Has
Corner Latitude Longitude
1 15° 46' 47.010" 120° 01' 24.220"
2 15° 46' 47.010" 120° 01' 20.550"
3 15° 46' 17.083" 120° 01' 20.550"
4 15° 46' 17.083" 120° 01' 24.220"
The Contractor is not allowed to undertake any mining activities within the
portion of the Contract Area covered by any DENR Project Areas, without
the prior consent of the contractor(s)/concessionaire(s) concerned.
Any portion(s) of the Contract Area that may be found and verified as old
growth and/or mossy forests shall be automatically excised from said
Contract Area.
SECTION V
EXPLORATION PERIOD
5.1 Timetable for Exploration - The
Contractor shall commence 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 six (6) years for nonmetallic minerals
and eight (8) years for
metallic minerals, subject to annual review and
approval by the Director in
accordance with the implementing rules and
regulations of the Act.
5.2 Renewal of Exploration Period - In case
the Contractor opts for a renewal
of its Exploration Period, it shall file prior
to the expiration thereof, a renewal application in the Regional Office
concerned, accompanied by the mandatory requirements stipulated in the
implementing rules and regulations of the Act. The Director may grant the
renewal of the Exploration Period on condition that the Contractor has
substantially complied with the terms and conditions of the Agreement.
In cases where further exploration is warranted
beyond the six (6)- or eight
(8)-year period and on condition that the
Contractor has substantially
implemented the Exploration and Environmental
Work Programs as
verified by the Bureau, the Director may further
grant renewal of the
Exploration Period: Provided, That the
Contractor shall be required to set
up a performance surety equivalent to the
expenditure requirement of the
Exploration and Environmental Work Programs.
5.3 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 Contractor in
conducting Exploration
activities under the terms of this Agreement
during the Exploration Period
12
shall be in the
aggregate of not less than that specified for each of the
Contract Years, as follows:
For the Exploration Work Program:
1st Contract Year :
PhP 8,765,000.00
2nd Contract Year :
PhP 7,200,000.00
Total
: PhP
15,965,000.00
For the Environmental Work Program
: PhP 1,600,000.00
In the event of renewal of the Exploration
Period, the amount to be spent
every year shall first be agreed upon by the
parties.
In the event of termination of this 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 of the
Government, expend less during a year, then the
deficiency shall be
applied to the amount to be expended during the
succeeding Contract
Years.
5.4. 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 a Declaration of Mining Feasibility
by the Director, the
Contractor shall finally relinquish any portion
of the Contract Area not
necessary for mining operations and not covered
by any Declaration of
Mining Feasibility.
5.5.Final Mining Area - The Director may allow
the Contractor to hold more
than one (1) final Mining Area subject to the
maximum limits set under the
implementing rules and regulations of the Act:
Provided, That each final
Mining Area shall be covered by a Declaration of
Mining Feasibility.
5.6. Declaration of Mining Feasibility -
Within the term of the Exploration
Period, the Contractor shall file in the
Regional Office concerned, the
Declaration of Mining Feasibility of the
Contract Area/final Mining Area
supported by Mining Feasibility Study, Three
(3)-Year Development and
Construction or Commercial Operation Work
Program, complete geologic
report, an application for survey and the
pertinent Environmental
Compliance Certificate, among other applicable
requirements. Failure of
the Contractor to submit the Declaration of
Mining Feasibility during the
Exploration Period shall be considered a
substantial breach of this
Agreement.
13
5.7 Survey of the Contract Area― The
Contractor shall cause the survey of
the perimeter Of the Contract Area/final Mining
Area through an
application for survey, complete with
requirements, filed in the Regional
Office concerned simultaneous with the
submission of the Declaration of
Mining Feasibility Survey returns shall be
submitted to the Regional
Director concerned for approval within one(1)year
from receipt of the
Order of Survey complete with the mandatory
requirements stated in the
implementing rules and regulations of the Act
5.8 Reporting
a. During the Exploration Period, the
Contractor shall submit to the
Director, through the Regional Director
concerned, quarterly and
annual accomplishment reports under oath on a‖ activities conducted in the Contract Area from the Effective
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
submitted 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 map at a minimum 1:50,000 scale, copies of
originals of assay results, duplicated samples, field data, copies
of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing
discrepancies/deviations with approved exploration and environmental plans
and budgets as we‖ as
a‖ other information of any kind collected during the exploration activities A‖ information submitted to the Bureau shall be subject to the confidentiality clause of
this Agreement
b. Final Report― The
Contractor shall submit to the Director, through
the Regional Director concerned, 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 a‖
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
results of the 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/Regional Director
concerned, 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
c. Relinquishment Report― The Contractor shall
submit a separate relinquishment report with a detailed geologic
report of the relinquished area accompanied by maps at a scale
of 1:50,000 and results of analyses and detailed expenditures,
among others.
14
SECTION
VI
DEVELOPMENT AND CONSTRUCTION PERIOD
6.1 Timetable - The Contractor shall
complete the development of the mine
including the construction of production
facilities within thirty six (36)
months from the submission of the Declaration of
Mining Feasibility,
subject to such extension based on justifiable
reasons as the Director
may approve, upon recommendation of the Regional
Director concerned.
6.2.Reporting
a. Annual - The Contractor shall submit,
within sixty (60) days after
December 31 of each year, to the Director,
through the Regional
Director concerned, an annual report, which
states the major
activities, achievements and detailed
expenditures during the year
covered, including maps, assays, rock and
mineral analyses and
geological and environmental progress reports
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
Regional Director
concerned. Such report shall integrate all
information in maps of
appropriate scale and quality, as well as in
monographs or reports
in accordance with international standards.
SECTION VII
OPERATING PERIOD
7.1. Timetable - The Contractor shall submit,
within thirty (30) days before
completion of mine development and construction
of production facilities,
to the Director, through the Regional Director
concerned, a Three-Year
Commercial Operation Work Program. The
Contractor shall commence
commercial utilization immediately upon approval
of the aforesaid Work
Program. Failure of the Contractor to commence
Commercial Production
within the period shall be considered a
substantial breach of the
Agreement.
7.2. Commercial Operation Work Program and
Budget - During the Operating
Period, the Contractor shall submit to the
Director, through the Regional
Director concerned, Work Programs and Budgets
covering a period of
three (3) years each, which shall be submitted
not later than thirty (30)
days before the expiration of the period covered
by the previous Work
Program.
The Contractor shall conduct Mining Operations
and other activities for the
duration of the Operating Period in accordance
with the duly approved
15
Work Programs and corresponding Budgets.
7.3. 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.
7.4. 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 Director, through the
Regional Director
concerned, a Quarterly Report stating the
tonnage of production in
terms of 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.
b. 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 Regional Director
concerned, an Annual
Report indicating in sufficient detail:
b.1. The total tonnage of ore reserves, whether proven,
probable,
or inferred, 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
if known to
the Contractor, tonnages refined, processed or
manufactured in the Philippines with full
specifications as to
the intermediate products, by-products or final
products and
of the terms at which they were disposed;
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 program,
including the
investment actually made or committed; and
b.3. Profile
of work force, including management and staff,
stating particularly their nationalities, and
for Filipinos, their
place of origin (i.e., barangay, town, province,
region).
The Contractor shall also comply with other
reporting requirements
provided for in the implementing rules and
regulations of the Act.
16
SECTION VIII
FISCAL REGIME
8.1. General Principle― The fiscal regime of this Agreement
shall be governed
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 terms and
conditions prevailing elsewhere
in the industry and any special efficiency to be
gained by a particularly
good performance of the Contractor
8.2. Registration Fees― Within fifteen (15) days upon
receipt of the notice of
approval of the Agreement from the Regional office concerned, 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 of the same same.
8.3. Occupation
Fees― Prior to registration of this Agreement and at the same date every year thereafter, the Contractor shall pay to
the Municipal/City Treasurer concerned an occupation fee over the
Contract Area at the annual rate provided in the existing rules and
regulations if the fee is not paid on the date specified,
the Contractor shall pay a surcharge of twenty five percent (25%) of the amount due in
addition to the occupation fees.
8.4. Share
of the Government― The Government 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) of the
National Internal
Revenue Code, as amended as we‖ as other taxes,duties
and fees levied
by existing laws.
For purposes of determining the amount of the
herein Government Share,
the Contractor shall strictly comply with the
auditing and accounting
requirements 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".
8.5. 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 i sha‖ 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,
17
prices shall be at arm's length standard and competing offers for large
scale and long-term contracts shall be procured.
Before any sale and/or
shipment of mineral product is made, existing
and future marketing
contract(s)/sales agreement(s) shall be
submitted to the Director, copy
furnished the Regional Director concerned, for
registration. At the same
time, the Contractor shall regularly inform in
writing of any revisions,
changes or additions in said
contract(s)/agreement(s).
The Contractor shall reflect in its
Monthly/Quarterly Report on Production,
Sales and Inventory of Minerals, as well as in
the Integrated Annual
Report, the corresponding registration number(s)
of the marketing
contract(s)/agreement(s) governing the export or
sale of minerals.
8.6. Associated Minerals - If minerals
other than nickel, cobalt, chromite 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 Government share.
SECTION IX
WORK PROGRAMS
9.1 Submission to Government - Within the
periods stated herein, the
Contractor shall prepare and submit to the
Director, through the Regional
Director concerned, a Work Program and
corresponding Budget for the
Contract Area stating the Mining Operations and
expenditures which the
Contractor proposes to carry out during the
period covered with the details
and particulars set forth elsewhere in this
Agreement or in the supporting
documents.
9.2. Government's Examination and Revision
of Work Program - Should the
Government decide to propose a revision to a
certain specific feature in
the Work Program or Budget, it shall, within
thirty (30) days after receipt
thereof, provide a Notice to the Contractor
specifying in reasonable detail
its reasons therefore. Promptly thereafter, the
Government and
Contractor will meet and endeavor to agree on
the revision proposed by
the Government. In any event, the revision of
any portion of said Work
Program or Budget in which the Government shall
fail to notify the
Contractor of the proposed revision shall,
insofar as possible, be carried
out as prescribed herein. If the Government
should fail within sixty (60)
days from receipt thereof to notify Contractor
of the proposed revisions,
the Work Program and Budget proposed by the
Contractor shall be
deemed to be approved.
9.3. 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 percent
(20%) shall be subject to the
18
approval of the Director.
9.4. The Government's approval of a proposed
Work Program and Budget will
not be unreasonably withheld.
SECTION X
ENVIRONMENTAL PROTECTION AND MINE SAFETY AND
HEALTH
10.1. The Contractor shall manage its Mining
Operations in a technically,
financially, socially, culturally and
environmentally responsible manner to
achieve the sustainable development objectives
and responsibilities as
provided for under the implementing rules and
regulations of the Act.
10.2. The Contractor shall ensure that the
standards of environmental protection are met in the course of the Mining
Operation. To the extent possible, control of pollution and the
transformation of the 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
implementing 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
of the total project
cost (10%) or in such amount depending on the
environmental/geological condition, 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 beginning
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%) of its
direct mining and milling costs depending on the
environmental/geologic
condition, nature and scale of operations and
technology employed in the
Contract Area.
19
10.7 The Contractor shall establish a Contingent Liability and RehabilitationFund (CLRF) which shall be in the form of the Mine Rehabilitation Fund
(MRF) and the Mine Waste and Tailings Fee (MWTF).
The MRF shall be 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 during the
specific project phase. The MRF shall be deposited as Trust Fund in a
government depository bank and shall be used for physical and social
rehabilitation of areas affected by mining activities and for research on the
social, technical and preventive aspects of rehabilitation.
The MWTF shall be collected based on the amounts of mine waste and
mill tailings generated during the conduct of Mining Operations. The
MWTF collected shall accrue to a Mine Waste and Tailings Reserve Fund
and shall be deposited in a government depository bank for payment of
compensation for damages caused by the Mining Operations.
10.8 The Contractor shall set up mitigating measures such as mine waste and
mill tailings disposal system, mine rehabilitation or plan, water quality
monitoring, etc. to minimize land degradation, air and water pollution, 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 DAO No. 2000-98,
otherwise known as the "Mine Safety and Health Standards."
10.11 The Contractor shall be responsible for the submission of a final mine rehabilitation and/or decommissioning plans, including its financial
requirements and incorporating the details and particulars set forth in the
implementing rules and regulations of the Act.
SECTION XI
RIGHTS AND OBLIGATIONS OF THE PARTIES
11.1 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;
20
b. To construct and operate any facilities specified under the Mineral Agreement or approved Work Program;
c. To determine the exploration, mining and treatment process to be
utilized in the Mining Operations;
d. To extract, remove use and dispose of any tailings as authorized
by an approved Work Program;
e. To secure all permits necessary or desirable for the purpose of
Mining Operations;
f. 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.
g. 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;
h. To allow access to Government during reasonable hours in
inspecting the Contract Area and examining pertinent records for
purposes of monitoring compliance with terms of this
Agreement;
i. 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 indemnify the Government for any
expenses or costs incurred by the Government by reason of any
such claims, accounts, demands or actions;
J. In the development of the community:
j.1. To recognize and respect the rights, customs and traditions
of indigenous cultural communities over their ancestral lands
and to allocate royalty payments of not less than on percent
(1%) of the value of the 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, education, 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:
21
j.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 (1%) of the gross output
intended for the
concerned indigenous cultural community;
j.4 To give preference to Filipino citizens who
have established
domicile in the neighboring communities, in the
hiring of
personnel for its mining operations. lf
necessary skills and
expertise are currently not available, the
Contractor must immediately prepare
and undertake a training and recruitment
program at its expense; and
j.5 To incorporate in the Mining
Feasibility Study the planned
expenditures necessary to implement (j.1)
to (j.3) of this Section;
k. 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
internationally
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 three (3)
years;
k.2. To systematically keep the data
generated from the
Contract Mining Area such as cores, assays and
other
related information, including economic and
financial data
and make them accessible 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 Government or local mining
company the
appropriate technology it may adapt in the
exploration,
development and commercial utilization of the
minerals in
the Contract Area;
22
k.4 To
allocate research and development budget for the
advancement of mining technology and geosciences
in
coordination with the Bureau, research
institutions, academe, etc.; and
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, however, that the
release of
data, maps and the like shall be similarly
constrained in
accordance with (k.1 ) and (k.2) above;
l. To incorporate in the Mining Feasibility
Study the planned
expenditures necessary to implement all the
plans and programs
set forth in this Agreement; and
m. To pay all other taxes and fees mandated by
existing laws, rules
and regulations.
11.2. Rights of the Contractor:
a. To conduct Mining Operations
within the confines of its Contract Mining Area in accordance with
the terms and conditions hereof and without interfering with
the rights
of other Contractors/Lessees/Operators/ Permittees/Permit Holders;
b. Possession of the Contract Area, with
full right of ingress and
egress and the right to occupy the same, subject
to surface and
easement rights;
c. To use and have access to all
declassified geological, geophysical,
drilling, production and other data relevant to
the mining operations;
d. To sell, assign, transfer, convey or
otherwise dispose of all
e. To employ or bring into the Philippines
foreign technical and
its rights, interests and obligations under the
Agreement subject to the
approval of the Government; 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. Every time foreign technologies
are utilized and
where alien executives are employed, an
effective program of
23
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:
f. 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;
g. Repatriation of capital and remittance
of profits, dividends and
interest on loans, subject to existing laws and
Bangko Sentral ng
Pilipinas 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.
11.3. Obligations of the Government:
a. To ensure that the Contractor has
the Government's full cooperation in the exercise of the rights granted to
it under this Agreement;
b. To 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
c. To cooperate with the Contractor in its
efforts to obtain financing
contemplated herein from banks or other
financial institutions:
Provided, That such financing arrangements will
in no event reduce
the Contractor's obligation on Government rights
hereunder.
SECTION XII
ASSETS AND EQUIPMENT
12.1. The Contractor shall acquire for the
Mining Operations only such assets
that are reasonably estimated to be required in
carrying out such Mining
Operations.
12.2. All materials, equipment, plant and other
installations of a movable nature
erected or placed on the Contract Area by the
Contractor shall remain the
property 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 (1)
24
year from the time of
cessation within which to remove its improvements;
otherwise, all social infrastructures and
facilities shall be turned over or
donated tax free 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.
SECTION XIII
EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL
13.1 The Contractor agrees to employ, to
the extent possible, qualified Filipino
personnel in all types of mining operations for
which they are qualified;
and after Commercial Production commences shall,
in consultation and
with consent of the Government, prepare and
undertake an extensive
training programme suitable to Filipino
nationals in all levels of
employment. The objective of said programme
shall be to reach within
the timetable set forth below the following
targets of "Filipinization:"
Unskllled Skilled
Clerical Professional Management
(%) (%) (%) (%) (%)
Year 1 100% 100% 100% 70% 70%
Year 3 100% 100% 100% 90% 80%
Year 5 100% 100% 100% 100% 90%
Year 7 100% 100% 100% 100% 95%
Year 10 100% 100% 100% 100% 95%
Year 15 100% 100% 100% 100% 95%
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 Government and the Contractor shall consult with each other in good
faith and shall exhaust a‖ available remedies to settle any and a‖ 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.
25
14.2. Any disagreement
or dispute which can not be settled amicably within
a period of one (1) year from the time the
issue is 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 the
other to be appointed by the Secretary. The
first two appointed arbitrators
shall consider names of qualified 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 arbitration shall be conducted
applying the substantive
laws of the Republic of the Philippines.
14.3. Each party shall pay fifty percent (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
INCENTIVES AND CREDITS
15.1. 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 term, whether original or
renewal; (b) withdrawal from
the Agreement by the Contractor; (c) violation
by the Contractor of the
Agreement's terms and conditions; (d) failure to
pay taxes, fees/or
charges or financial obligations for two (2)
consecutive years; (e) false
statement or omission of facts by the
Contractor; and (f) any other cause
or reason provided under the Act and its
implementing rules 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 hereof, 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
mining 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.
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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 case 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 accordance with good mining
industry practice
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, inter alia
shall constitute breach of
contract, upon which the Government may exercise
its right to terminate
the Agreement:
a. Failure of the Contractor without valid
reason to commence
Commercial Production within the period
prescribed; and/or
b. Failure of the 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 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
OTHER 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
of this Agreement.
16.2.
Notice
All notices, demands and other communications
required or
permitted hereunder shall be made in
writing, telex or telecopy and shall be deemed to have been duly given
notice, in the case of telex or telecopy, if
answered back or confirmation received, or if
delivered by hand, upon
receipt or ten days after being deposited in the
mail, airmail postage
prepaid and addressed as follows:
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If to the Government:
The Secretary
Department of Environment and Natural Resources
DENR Building, Visayas Avenue
Diliman, Quezon City
If to the Contractor:
The President
Eramen Minerals, Inc.
3'd Floor, ALPAP I Building
No. 140 Leviste Street
Salcedo Village, Makati 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
governed 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 provisions of the Act, its implementing
rules and regulations and
other relevant laws and regulations.
16.4. Suspension of Obligation
a. Any failure or delay on the part of any party
in the performance of its
obligation or duties hereunder shall be excused
to the extent
attributable to Force Majeure as defined in the
Act: Provided, That
the suspension of Mining Operations due to Force
Majeure causes
shall be subject to approval by the Director.
b. Mining Operations are delayed, curtailed
or prevented by such
Force Majeure causes, then the time for enjoying
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. The Party, whose ability to perform its
obligations is affected by
such 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 effect and
shall use its efforts to
remedy such delay, except that neither Party
shall be under any
obligation to settle a labor dispute: Provided,
That the suspension
of obligation by the Contractor shall be subject
to prior approval by
the Director
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16.5. Amendments
This Agreement shall not be annulled, amended or modified in any
respect
except by mutual consent in writing of the
herein parties.
IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement, as
of the day and year first above written
THE REPUBLIC OF THE PHILIPPINES
BY:
MICHAEL T. DEFENSOR
Secretary
Department of Environment and Natural Resources
ERAMEN MINERALS, INC.
TIN: _219-856-656_______
SIGNED IN THE PRESENCE OF:
(Signature over Printed Name)
(Signature over Printed Name)
29
ACKNOWLEDGEMENT
Republic of the Philippines )
Quezon City ) ss
Before me, a Notary Public for and in the City of Quezon personally
appeared MICHAEL T. DEFENSOR, with Community Tax Certificate No.
15653147 issued
on January 5, 2005 at Quezon City in his
capacity as Secretary of
Department of Environment and Natural Resources,
and ENRIQUE C.
FERNANDEZ, with Community Tax Certificate No.
13980829 issued on January 26,
2005 at Manila, in
their capacity as President of Eramen Minerals
Incorporated both known to me
and to be the same persons who executed the
foregoing instrument consisting of
thirty (30) pages, including this acknowledgment page, and acknowledged to me
that the same is their voluntary acts and deeds.
IN WITNESS THEREOF, I have herunto set my hand and affix my notarial
seal, this ______________________________ day of _____________.
Notary Public
Doc. No. 213
Page No. 44
Book No.1
Series of 2005
C3/Company Eramen/proforma/mpaa/Feb 4, 2005
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