DOJ OPINION NO. 074, s.

2006
November 30, 2006

Governor Eripe John M. Amante

Office of the Governor
Butuan City, Agusan del Norte
Sir:
This refers to your request for an opinion regarding the proper interpretation of
the phrase "50,000 nickel-cobalt ore" as appearing in the Small Scale Mining Permits
(SSMP) and the Environmental Compliance Certificates (ECC).
The query, it appears, stemmed from the letter of the lawyer of SR Metals, Inc.,
San R Construction Corporation, and Galeo Equipment Corporation, the three rms
granted by your of ce SSMP for them to be able to extract nickel-cobalt ore within your
province, informing your of ce of the intention of the said rms to extract more from
their approved mine sites claiming that they have yet to meet the nickel-cobalt ore
quota allowed them under their SSMP and ECC.
It also appears that under the SSMP issued by your of ce, the permit-holder or
"permitee" is allowed to
. . . extract and remove 50,000 mt per annum, authorized under Republic
Act No. 7942 (sic) and its implementing rules and regulations, under related laws .
. . (emphasis supplied)

HEITAD

Upon the other hand, the ECC issued by the Environmental Management Bureau
to the permitees provide, in part, as follows:
7.
That this Certificate is valid only for the operation of a small-scale
nickel-cobalt mining project employing shallow open case mining method . . .
8.
That the volume of extraction shall not exceed an annual production
capacity of 50,000 metric tons of nickel-cobalt ore . . . (stress ours)

You now seek advice from this Department to guide your of ce, which, you claim,
is in-charge of the processing and issuance of SSMP since the lawyer, in a letter dated
November 7, 2006 avers that:
It is very clear from the above-quoted ECC that my clients are entitled to
50,000 metric tons of nickel-cobalt ore. My clients wish to inform you that they
have not exhausted their limit of 50,000 metric tons of nickel-cobalt ore. The
reason for this is that what they have extracted only contains a specific amount
or percentage of nickel-cobalt ore. The extraction process is such that the nickelcobalt ore is mixed with other unwanted rocks and minerals, known as gangue.
Gangue is defined in Encyclopedia Britannica as unwanted rocks and minerals.
So, any other minerals, rocks or substances other than nickel, iron and cobalt are
considered as gangue.
The only way to determine the amount of nickel, iron and cobalt which my
clients have actually mined is through a scientific process in a laboratory. In the
laboratory, the chemist tests the whole extracted mass and then issues a
Certificate of Analysis. The Certification of Analysis shows that amount of nickel,
iron and cobalt in the mass which my client consider as ore.
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For your convenience, a copy of a Certificate of Analysis is attached herein

as Annex "B". In Annex "B", my clients were able to extract 49,446.000 metric tone
so of mass. This is indicated as Annex "B-1". Water denominated as H2O
comprises 34.46% of the mass. This is Annex "B-2". The remaining 31,752.848
metric tons of mass comprises of 0.94% nickel or 299.381 metric tons. This is
Annex "B-3". Of the 31,752.484.14% is iron (Annex "B-4") and 0.107% is Cobalt
(Annex "B-5"). So, in the Certificate of Analysis, water and any other minerals are
considered as gangue and not ore.

My clients are therefore informing you that they shall continue their mining
operations until they have exhausted their limit of 50,000 metric tons of nickelore." (emphasis added)
DEcSaI

Although, in line with settled precedents, the Secretary of Justice does not render
opinion on questions involving substantive rights of private parties (Sec. of Justice Op.
No. 54, current series), and those affecting local governments since their provincial/city
legal of cers or prosecutors, as the case may be, are, by law, designated as their legal
advisers (id., No. 33, s. 1983, citing opinions), we decide to rule on the issue not only
because of the separate request of the Secretary of the Interior and Local Government
(see, DILG Secretary dated November 20, 2006) but more because of the importance
of the issue raised and the fact that your of ce is, indeed, directly involved in the
implementation of R.A. No. 7076 (People's Small-scale Mining Act of 1991), the law
applicable herein (see, Sec. 42, R.A. No. 7942) as expressly stated in Sections 24 and
25 of R.A. No. 7076 which reads:
SEC. 24.
Provincial/City Mining Regulatory Board. There is hereby
created under the direct supervision and control of the Secretary a provincial/city
mining regulatory board, herein called the Board, which shall be the implementing
agency of the Department, and shall exercise the following powers and functions,
subject to review by the Secretary:
(a)

Declare and segregate existing gold-rush areas for smallscale mining;

(b)

Reserve future gold and other mining areas for small-scale

mining;

(c)

Award contracts to small-scale miners;

(d)

Formulate and implement rules and regulations related to

small-scale mining;

(e)

Settle disputes, conflicts or litigations over conflicting

claims within a people's small-scale mining area, an area
that is declared a small mining area; and

(f)

Perform such other functions as may be necessary to

achieve the goals and objectives of this Act.

SEC. 25.
Composition of the Provincial/City Mining Regulatory Board.
The Board shall be composed of the Department of Environment and Natural
Resources' representative as Chairman; and the representative of the governor or
city mayor, as the case may be, one (1) small-scale mining representative, one (1)
big-scale mining representative, and the representative from a non-government
organization who shall come from an environmental group, as members.
IaHDcT

The representatives from the private sector shall be nominated by their

respective organizations and appointed by the Department regional director. The
Department shall provide the staff support to the Board.

Moreover, the requested opinion of the Secretary of Justice would indeed be

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needed in view of the far-reaching impact of our mineral wealth and natural resources
on the larger community of the Filipino people. As held in La Bugal B'laan Tribal
Association Inc. v. Victor Ramos, GR No. 127882, December 1, 2004:
Verily, the mineral wealth and natural resources of this country are meant
to benefit not merely a select group of people living in the areas locally affected
by mining activities, but the entire Filipino nation, present and future, to whom the
mineral wealth really belong. This Court has therefore weighed carefully the rights
and interests of all concerned, and decided for the greater good of the greatest
number. JUSTICE FOR ALL, not just for some; JUSTICE FOR THE PRESENT AND
THE FUTURE, not just for the here and now.

The People's Small-scale Mining Act of 1991 (R.A. No. 7076) pertinently
provides:
SEC. 3.
Definitions. For purposes of this Act, the following terms
shall be defined as follows:
(b)
"Small-scale mining" refers to mining activities which rely heavily
on manual labor using simple implements and methods and do not use
explosives or heavy mining equipment;
xxx xxx xxx
SEC. 12.
Rights Under a People's Small-scale Mining Contract. A
people's small-scale mining contract entitles the small-scale mining contractor
the right to the mine, extract and dispose of mineral ores for commercial
purposes. . . . .
SEC. 13.
Terms and Conditions of the Contract. A contract shall
have a term of two (2) years, renewable subject to verification by the Board for the
like periods as long as the contractor complies with the conditions set forth in this
Act, and confers upon the contractor the right to mine within the contract area:
Provided, That the holder of a small-scale mining contract shall have the
following duties and obligations: . . . .

Basic is the rule in statutory interpretation that legislative intent must be

ascertained from a consideration of the statute as a whole. As stressed in Aisporna vs.
Court of Appeals, 113 SCRA 459:
. . . The particular words, clauses and phrases should not be studied as
detached and isolated expressions, but the whole and every part of the statute
must be construed in fixing the meaning of any of its parts and in order to
produce harmonious whole. (at p. 466, citing cases)
cDEICH

Equally elementary is the rule that when the words and phrases of a statute are
clear and unequivocal, their meaning must be determined from the language employed
and the statute must be taken to mean exactly what it says (Baranda v. Gustilo , 165
SCRA 757, 770, citing cases).
The de nition of "small-scale mining" under R.A. No. 7076 is clear and
categorical. Any mining activity that relies heavily on manual labor without use of
explosives or heavy mining equipment falls under said de nition. It does not mention
any annual production quota or limitation. On the contrary, Section 12 thereof is explicit
that the contractor, or, speci cally, in this case, the permit holders or permitees, are
entitled not only to the right to mines, but also to "extract and dispose of mineral ores
(found therein) for commercial purposes" without speci c limitation as to the nature of
the mineral extracted or the quantity thereof.
Moreover, while Section 13 of the law imposes certain duties and obligations
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upon the contractor or permitee, nothing therein refers directly or otherwise to

production quota limitation. Additionally, even Section 10 thereof, which provides for
the extent to the mining area, does not limit production but only the mining area and
depth of the tunnel or adit which, as stated in the law shall "not (exceed) that
recommended by the (EMB) director taking into account the "quantity of mineral
deposits", among others. It is, however, silent on the extent of the mining's annual quota
production. Thus, anything that is not in the law cannot be interpreted as included in the
law; otherwise, that would be amending not interpreting the law (see, Juan vs.
Musgi, 155 SCRA 135, 140; also, People vs. Maceren, 79 SCRA 450, 458, citing cases).
We cannot accept the limitation imposed under Presidential Decree No. 1899 for
the simple reason that Section 1 of the PD must be deemed to have been repealed or,
at least, amended albeit impliedly by R.A. No. 7076. While repeal by implication is
not favored and will not be declared unless the legislative intent is manifest (Velunta vs.
Chief, Philippine Constabulary, 157 SCRA 147, 153, citing cases), we are also aware that
when an irreconcilable con ict exists between a prior law and an subsequent one
covering the same eld of operation, the latest legislative expression prevails and the
prior law yields to the extent of the con ict (see, Ramirez vs. Court of Appeals, 71 SCRA
231).
SAHIDc

Consequently, in view of R.A. No. 7076, the annual production limit provided for
under PD. No. 1899 has become immaterial as long as the authority of the rms
involved under the SSMP and the ECC are valid and binding and the limitations and
conditions imposed by R.A. No. 7076 are observed and complied with.
Moreover, argumentatively, that the limitation imposed under the presidential
issuance is still valid and binding, the permitees can still continue with their mining
operation to exhaust the limit granted under the SSMP and the ECC.
It must be stressed, at the outset, that both PD No. 1899 and R.A. No. 7076 are
silent on the meaning of the term "ore". Upon the other hand, Section 3 of Republic Act
No. 7942, otherwise known as the "Philippine Mining Act of 1995", a related law, hence,
can and may be looked into, clearly defines "ore" as follows:
(ak)
"Ore" means a naturally occurring substance or material from
which a mineral or element can be mined and/or processed for profit.

The same provision also states that:

(z)
"Mine wastes and tailings" shall mean soil and rock materials from
surface or underground mining and milling operations with no economic value to
the generator of the same.
(aa)
"Minerals" refers to all naturally occurring inorganic substance in
solid, gas, liquid, or any intermediate state excluding energy materials such as
coal, petroleum, natural gas, radioactive materials, and geothermal energy.
xxx xxx xxx
(ac)

"Mineral land" means any area where mineral resources are found.

(ad)
"Mineral resource" means any concentration of minerals/rocks
with potential economic value.

While RA No. 7942 does not directly govern small-scale mining activities, it
cannot be denied that its relevant provisions, speci cally those that deal with mining in
general, are a persuasive authority which may be applied in small-scale mining where
the provisions of the law or laws applicable are wanting.
EITcaH

Applying the foregoing, "ore", more particularly "nickel-cobalt ore", may be said to
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be the only such naturally occurring substance from which nickel and cobalt may be
extracted, excluding such materials as soil and other materials which are of no
economic value to the Permitees.
Moreover, even if we are to construe that the term "ore" as used in the law refers
to the substance or material in its ordinary or common and general understanding, the
fact that both the SSMP and the ECC issued explicitly provided that said authorities or
permits cover only nickel-cobalt ore is conclusive that all other materials/minerals not
constituting either of the two minerals mentioned in the SSMP and ECC cannot be said
to be covered thereby.
Please be guided accordingly.
(SGD.) RAUL M. GONZALEZ
Secretary

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