Responsabie at Maka-pilipinong Pagmimina Act

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session JH. 14 P2.55 RITT SENATE Senate Bill No. _ Introduced by Senator JOEL VILLANUEVA AN ACT PROVIDING FOR THE STRATEGIC EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION OF MINERAL RESOURCES FOR THE BENEFIT OF LOCAL INDUSTRIES AND COMMUNITIES, AND FOR OTHER PURPOSES EXPLANATORY NOTE The Philippines is endowed with an abundance of mineral resources, ,1 ranking among the world's top holders of nickel, copper, and cobalt reserves-minerals that are essential to global clean energy transitions. And yet, the country continues to export the bulk of these resources in raw form, with limited benefits for local industries, workers, and communities. This proposed measure seeks to change that. The proposed measure aims to maximize the long-term value of the country's finite mineral resources by discouraging the export of unprocessed ore and encouraging domestic value-adding activities. It adopts a phased approach - a gradually increasing export tax on raw ore starting in 2026, which escalates every two years, until a full ban on raw ore export takes effect in 2033. This transition period gives the mining industry sufficient time to realign business plans, invest in domestic processing capacity, and prepare for integration into the country's industrial development agenda. To ensure that the proceeds from the export tax benefit the Filipino people, the bill establishes the Mining Downstream Industry Development Fund, which shall be allocated to support local processing, strengthen the capacity of mining host local government units (LGUs), and fund national development priorities aligned with the Mines and Geosciences Bureau. Minerals Industry at A Glance. Published on 30 June 2024. Available at https://mgb.gov.ph/images/Mineral_Statistics/MINERALS-INDUSTRY-AT-A-GLANCE-Updated-30-June- 2024.pdf (Accessed on 20 June 2025).

Philippine Development Plan. The Downstream Mining Coordinating Council, composed of relevant government agencies and key stakeholders, will be created to recommend strategic programs and projects to support the growth of downstream mining industries, in line with a fifteen-year development roadmap. To further strengthen this shift, the bill mandates the alignment of higher education and technical-vocational training programs with the needs of the downstream mining industry, in coordination with the Technical Education and Skills Development Authority and the Commission on Higher Education. This ensures that Filipino workers are equipped to take on higher-value jobs in mineral processing, metallurgy, industrial operations, and related fields. Countries like Indonesia have already demonstrated the long-term benefits of this strategy. In 2014, Indonesia banned the export of unprocessed nickel ore to encourage local smelting and refining. This bold policy move significantly increased domestic investment in mineral processing facilities, created jobs, and positioned the Indonesia as a key player in the global battery and electric vehicle supply chain. The Philippines can and must take similar steps not only to remain competitive but to ensure that its mineral wealth truly serves national development. This measure is a concrete step toward responsible and strategic mining-one that moves beyond extraction and toward value creation, industrialization, and shared prosperity for the Filipino people. In view of the foregoing, the immediate passage of this bill is earnestly sought. Hella VILLANUEVA T CETRI. Indonesia's Export Ban on Raw Minerals. 3 July 2023. Available at https://www.cetri.be/Indonesia-s- export-ban-on-raw?lang=en (Accessed on 22 June 2025). ASEAN Briefing. Indonesia's Ban on Raw Mineral Exports Takes Effect. Published on 15 January 2014, Avaitable at https://www.aseanbriefing.com/news/indonesias-ban-raw-mineral-exports-takes-effect/ Accessed on 22

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES JUL 14 P2:55 First Regular Session SENATE Senate Bill No. 352 Introduced by Senator JOEL VILLANUEVA AN ACT PROVIDING FOR THE STRATEGIC EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION OF MINERAL RESOURCES FOR THE BENEFIT OF LOCAL INDUSTRIES AND COMMUNITIES, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Responsable at

2 Maka-Pilipinong Pagmimina Act."

SEC. 2. Declaration of Principles. - All natural resources are owned by

Filipinos represented by the State. It shall be the responsibility of the State to 5 ensure that the present and future generations benefit from these finite resources. The State must then establish mechanisms to promote the rational and responsible exploration, development, utilization, and conservation of the country's mineral resources. The State must likewise ensure that mining activities in the country shall serve as a driver for economic growth, creating jobs, and supporting local industries, and that the revenues derived from mining activities are used for the benefit of the people.

SEC. 3. Definition of Terms. - For the purposes of this Act, the following

definitions shall apply:

a) Financial or Technical Assistance Agreement (FTAA) refers to a contract involving financial or technical assistance for large-scale exploration, development and utilization of mineral resources; b) Gross Output refers to the actual market value of 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; C) Mineral Production Sharing Agreement (MPSA) refers to an agreement where the government grants to the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. The contractor provides the financing, technology, management and personnel necessary for the implementation of the agreement; Minerals refer to 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; e) Mineral Products refer to materials derived from ores, minerals and/or rocks and prepared into marketable state by mineral processing; f) Mining Operations refer to mining activities involving exploration, feasibility study, development, and utilization; and g) Utilization refers to the extraction, mineral processing and/or disposition of minerals.

SEC. 4. Interpretation. - Nothing in this Act shall be construed as a

diminution of the rights and privileges of local government units presently enjoyed under existing laws such as Republic Act No. 7160. Further, nothing in this Act shall be construed as a diminution of the rights enjoyed by indigenous people under Republic Act No. 8371 of 1997.

SEC. 5. Scope and Application. - This Act shall apply to new Mineral

Production Sharing Agreements (MPSAs) and Financial or Technical Assistance Agreements (FTAAs) covering large-scale mineral mining operations that shall be entered into after the effectivity of this Act.

This Act shall also cover existing MPSAs and FTAAs where such agreements provide that any terms and conditions resulting from repeal or amendment of any existing laws or regulation or from the enactment of a law, regulation

SEC. 6. Export Tax on Raw Ore. - Effective January 1, 2026, a ten

percent (10%) export tax on the gross value of raw ore shall be imposed: Provided, That effective January 1, 2028, a twenty percent (20%) export tax on the gross value of raw ore shall be imposed: Provided, further, That effective January 1, 2030, a forty percent (40%) export tax on the gross value of raw ore shall be imposed: Provided, furthermore, That effective January 1, 2032, a sixty percent (60%) export tax on the gross value of raw shall be imposed.

SEC. 7. Utilization of Export Tax Proceeds. - The proceeds from the

export tax on raw ore shall be allocated as follows: a) 50% shall be allocated to the Downstream Mining Industry Development Fund to support capital investments, research and development, and technology transfer for local mineral processing and value-adding; b) 25% shall be allocated to Local Government Units (LGUs) hosting mining operations to support livelihood diversification, community development programs, and local environmental protection programs; 25% shall accrue to the National Treasury for sustainable development initiatives aligned with the Philippine Development Plan.

SEC. 8. Ban on Export of Raw Ore. - The exportation of raw ore shall

be prohibited effective January 1, 2033.

SEC. 9. Downstream Mining Industry Development Fund. - The

national government shall create a Downstream Mining Industry Development Fund sourced from a portion of the export tax proceeds collected, as provided under Section 7 of this Act. It shall be used exclusively to finance programs and projects for the development of the downstream mining industry, in strict compliance with the objectives of this Act. The Fund shall be governed by a multi-stakeholder oversight body created under Section 10 of this Act. It shall adhere to the accounting and auditing rules of the Commission on Audit (COA), and shall undergo regular audit by the COA.

SEC. 10. Strategic Downstream Mining Development Roadmap. -

Within a period of six (6) months from the effectivity of this Act, a fifteen-year (15) Strategic Downstream Mining Development Roadmap shall be formulated for the development of downstream mining industries and the creation of jobs for strategic metallic and nonmetallic minerals. It shall be aligned with the Philippine Development Plan and the National Industrialization Plan. It shall be subject to review and updating every five (5) years.

SEC. 11. Downstream Mining Coordinating Council (DMCC). - There

is hereby created a Downstream Mining Coordinating Council, which shall be in charge of the Downstream Mining Industry Development Fund and shall prepare the Strategic Downstream Mining Development Roadmap. It shall be composed of the following: a) The Secretary of the Department of Environment and Natural Resources (DENR), as Chairperson; b) The Secretary of the Department of Trade and Industry (DTI) as Co- Chairperson; C) The Secretary of the Department of Science and Technology (DOST) as Member; d) The Secretary of the Department of Economy, Planning, and Development (DEPDev) as Member; e) The Secretary of the Department of Finance (DOF) as Member; The Secretary of the Department of the Interior and Local Government f) (DILG) as Member; Two (2) representatives from the mining industry as Members; and Two (2) representatives from civil society organizations as Members. The DMCC shall meet at least twice a year or as often as may be necessary. The chairpersons and members may designate their representatives, who shall have at least the rank of Assistant Secretary or its equivalent, and who must be fully authorized to decide for and on behalf of the agency represented. The Secretariat of the DMCC shall be composed of dedicated personnel from DENR and DTI, which shall provide administrative, operational, and technical

support to the DMCC. The Council may request additional technical or administrative support from its member agencies or other government offices, as may be necessary. Budgetary support for the operations of the Council shall be sourced from the appropriations of its member agencies, subject to existing laws and regulations. The DMCC shall likewise engage other government agencies and instrumentalities, LGUs, as well as representatives from the labor and employers' organizations, local mining companies, and other civil society organizations, as may be necessary, for the effective implementation of this Act.

SEC. 12. Powers and Functions of the DMCC. - The DMCC shall have

the following powers and functions: a) Submit a work plan, within sixty (60) days from the effectivity of this Act, for the formulation of the Strategic Downstream Mining Development Roadmap; Identify and recommend programs and projects to support the growth of the downstream mining industry; c) Conduct and facilitate the necessary capacity and institutional building programs for all concerned government agencies and instrumentalities and stakeholders; d) Request the assistance of any government agency or instrumentality, including government-owned and controlled corporations and LGUs, in the implementation of the downstream mining development program and road- map; e) Conduct quarterly meetings among members of the council; f) Submit quarterly progress reports to the President on the status of the implementation of the downstream mining development program and road- map; Adhere to the reporting requirements of the Philippine Extractive Industries and Transparency Initiative; and h) Perform such other functions and acts as may be necessary, proper or incidental to the attainment of its mandates and objectives, or as may be directed by the Chairpersons.

SEC. 13. Skills and Workforce Development. - The DMCC, in

coordination with the Technical Education and Skills Development Authority (TESDA) and the Commission on Higher Education (CHED), shall facilitate the development of technical-vocational and higher education programs to support 5 workforce needs of the downstream mining industry.

SEC. 14. Penalties. - Any company proven to have violated Sections 6 and

8 of this Act shall be subject to a fine ranging from Five Million Pesos (P 5,000,000.00) to Ten Million Pesos (P10,000,000.00) and an additional amount equivalent to five (5) times the gross value of raw ore illegally exported. Furthermore, the responsible officers of the erring company shall be punished by imprisonment of not less than one (1) year but not more than three (3) years.

SEC. 15. Incentives. - Notwithstanding anything to the contrary, all tax

incentives granted to mineral mining and quarry contractors shall be repealed immediately upon the effectivity of this Act.

SEC. 16. Implementing Rules and Regulation. - The Secretaries of

the DENR, DTI, DEPDev, DOF, and DILG, in consultation with relevant stakeholders, shall promulgate the necessary rules and regulations within sixty (60) days from the effectivity of this Act.

SEC. 17. Separability Clause. - If any portion or provision of this Act is

declared unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.

SEC. 18. Repealing Clause. - Any law, presidential decree or issuance,

executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly; Provided, That nothing in this Act shall be construed as a diminution of local autonomy or in derogation of ancestral domain rights under the Indigenous Peoples' Right Act of 1997.

SEC. 19. Effectivity. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in a newspaper of general circulation. Approved,