PROVIDING FOR A MODERNIZED SYSTEM OF ADMINISTRATION AND DISPOSITION OF MINERAL LANDS AND TO PROMOTE AND ENCOURAGE THE DEVELOPMENT AND EXPLOITATION THEREOF.

• Number: Presidential Decree No. 463
• Sections: 107

Preamble

WHEREAS, mineral production is a major support of the national economy, and therefore the intensified discovery, exploration, development and wise utilization of the country's mineral resources are urgently needed for national development; WHEREAS, the existence of large undeveloped mineral areas and the proliferation of small mining claims deter modern development of the country's mineral resources and urgently require well-planned exploration, development and systematic exploitation of mineral lands to accelerate production and to bolster the national economy;

WHEREAS, effective and continuous mining operations require considerable outlays of capital and resources, and make it imperative that persons possessing the financial resources and technical skills for modern exploratory and development techniques be encouraged to undertake the exploration, development and exploitation of our mineral resources;

WHEREAS, the foregoing objectives cannot be achieved within the shortest possible time without removing the deficiencies and limitations of existing laws and improving the same in order to provide for a modernized administration and disposition of mineral lands and to promote and encourage the development and exploitation thereof.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby issue this Decree, revising Commonwealth Act No. 137 otherwise known as the Mining Act, as amended, as follows:

TITLE AND DEFINITIONS

OWNERSHIP OF MINERAL LANDS AND MINERAL DEPOSITS

MINERAL RESERVATIONS

LOCATION OF CLAIMS

MINING RECORDERS, DISTRICTS AND REGIONS

ANNUAL WORK OBLIGATIONS

LEASE SURVEY OF MINING CLAIMS

LEASE OF MINING CLAIMS

PROTESTS, ADVERSE CLAIMS AND APPEALS

FISCAL PROVISIONS

AUXILIARY MINING RIGHTS

MINES PERSONNEL, INSPECTION AND SAFETY

QUARRY RESOURCES

PENAL PROVISIONS

GENERAL PROVISIONS

TRANSITORY AND FINAL PROVISIONS

Section 1 Short Title.

SECTION 1. Short Title. - This Decree shall be known and may be cited as the "Mineral Resources Development Decree of 1974".

Section 2 Definition of Terms.

SEC. 2. Definition of Terms. - As used in and for the purpose of this Decree, the following terms, whether in the singular or plural, unless the context indicates otherwise, shall have the following meanings:

(a)

"State" means the Republic of the Philippines.

(b)

"President" means the President of the Republic of the Philippines.

(c)

"Government" means the Government of the Republic of the Philippines.

(d)

"Secretary" means the Secretary of Natural Resources.

(e)

"Director" means the Director of Mines.

(f)

"Minerals" means all naturally occurring inorganic substances in solid, liquid, or any intermediate state including coal. Soil which supports organic life, sand and gravel, guano, petroleum, geothermal energy and natural gas are included in this term but are governed by special laws.

(g)

"Mineral Deposit" means a natural deposit or accumulation of minerals.

(h)

"Mineral Lands" are those lands in which minerals exist in sufficient quantity and grade to justify the necessary expenditures in extracting and utilizing such minerals.

(i)

"Quarry Resources" means any common stone or other common mineral substances as the Director may declare to be quarry resources such as, but not restricted to, marl, marble, granite, volcanic cinders, basalt, tuff and rock phosphate; Provided they contain no metal or metals or other valuable minerals in economically workable quantities.

(j)

"Exploration" is the examination and investigation of lands supposed to contain valuable minerals, by drilling, trenching, shaft sinking, tunneling, test pitting and other means, for the purpose of probing the presence of mineral deposits and the extent thereof.

(k)

"Development" refers to steps necessarily taken to reach an orebody or mineral deposit so that it can be mined.

(l)

"Exploitation" means the extraction and utilization of mineral deposits.

(m)

"Mining" or "to mind" means to extract, remove, utilize minerals, and include operations necessary for that purpose.

(n)

"Qualified person" means a Filipino citizen, of legal age and with capacity to contract, or a corporation or partnership registered with the Securities and Exchange Commission at least 60% of the capital of which is owned by Filipino citizens.

(o)

"Lessee" may include a leaseholder, claim owner or operator as the context of the provisions of this Decree may indicate.

(p)

"Regulations" means the rules and adminis-trative orders promulgated by the Secretary to implement the provisions of this Decree, or issued by the Director as to such matters as may be delegated to him by the Secretary.

Section 3

SEC. 3. State Ownership of Mineral Deposits. -All mineral deposits in public or private lands within the territorial limits of the Philippines whether found in, on, or under the surface of dry lands, beds of creeks, rivers, lakes, or other submerged lands within the territorial waters or on the continental shelf or its analogue in an archipelago seaward from the shores of the Philippines which are not under the jurisdiction of other countries, belong to the State, inalienably and imprescriptively, and the administration, disposition and exploitation thereof shall be governed by this Decree and by rules and regulations promulgated thereunder and other laws.

Section 4 Minerals Excluded from Other Rights to Lands.

SEC. 4. Minerals Excluded from Other Rights to Lands. - The ownership or the right to use public or private lands whether exposed or submerged, for agricultural, logging, industrial, commercial, residential, petroleum exploration and/or exploitation purposes or for any purpose other than mining, does not include the ownership of, nor the right to develop, exploit or utilize, the mineral deposits found in, on or under the surface of such lands, except with respect to quarry resources as provided for in this Decree.

Section 5 Mineral Deposits Open to Location and Lease.

SEC. 5. Mineral Deposits Open to Location and Lease. - Subject to any existing rights or reservations, all valuable mineral deposits in public land including timber or forest land as defined in Presidential Decree, No. 389, otherwise known as the Forestry Reform Code or in private land not closed to mining location, and the land in which they are found, shall be free and open to prospecting, occupation, location and lease.

Section 6 Establishment and Reversion of Mineral Reservations.

SEC. 6. Establishment and Reversion of Mineral Reservations. - Upon the recommendation of the Secretary, based on the reports submitted by the Director, the President may set aside and establish an area of the public domain as a mineral reservation and prescribe the terms and conditions for its disposition and operation, or may also alter or modify the boundaries of any mineral reservation from time to time or revert any mineral reservation to the public domain without prejudice to any prior subsisting rights.

Section 7 Existing Claims in Reservation.

SEC. 7. Existing Claims in Reservation. - Whenever lands are reserved for purposes other than mining, the rights of the claimowners or lessees of valid mining claims existing within the reservation at the time of its establishment shall not be prejudiced or impaired.

Section 8 Exploration and Exploitation of Reserved Lands.

SEC. 8. Exploration and Exploitation of Reserved Lands. - When lands within reservations, which have been established for purposes other than mining, are found to be more valuable for their mineral contents, they may, upon recommendation of the Secretary be withdrawn from such reservation by the President and established as a mineral reservation.

When practicable, prospecting and exploration of minerals in reserved lands may be undertaken by the Bureau of Mines or by any proper government agency. Said reservation shall be opened to mining by the Government or its instrumentality or by any qualified person through competitive bidding under such terms and conditions as may be prescribed by the Secretary, or through contracts of service with any party or parties, domestic or foreign, duly qualified as to organization, finances, resources, experience and technical competence, subject in any case to the approval of the President.

In the event that the proper government agencies cannot undertake the prospecting and exploration of minerals in the reserved lands, qualified persons or corporations may be permitted to undertake such prospecting and exploration in accordance with the rules and regulations promulgated by the Secretary. The right to exploit therein shall be awarded by the President under such terms and conditions as recommended by the Director and approved by the Secretary, Provided, That the persons or corporations who undertook prospecting and exploration of said area shall be given priority.

Section 9

SEC. 9. Reservation Closed to Mining Location. -Mineral reservations are closed to mining location; Provided, however, That the Government may, prospect, develop and exploit such reservations, through its agencies or instrumentalities or through an independent contractor selected by negotiated contract or after a public bidding which shall be conducted by the Secretary through the Director after proper notice duly published, subject in any case to the approval of the President.

Section 10 Offshore Areas Established as Mineral Reservation.

SEC. 10. Offshore Areas Established as Mineral Reservation. - All submerged lands beneath the territorial waters and on the continental shelf or its analogue in an archipelago, are hereby established as mineral reservations subject to existing rights and the President may declare these reservations, or parts thereof, open or closed to mining location to be disposed of in the same manner as other mineral reservations. Submerged lands are those under water during low tide as determined by the Bureau of Coast and Geodetic Survey.

Section 11

SEC. 11. Locations in Public and Private Lands. -Only qualified persons may locate mining claims within public and private lands. However, a prospector may locate for another person: Provided, That he is first duly authorized by means of a public instrument registered with the mining recorder concerned before undertaking such location work.

Section 12

SEC. 12. Entry into Public and Private Lands. -A person who desires to conduct prospecting or other mining operations within public lands covered by concessions or rights other than mining shall first obtain the written permission of the government official concerned before entering such lands. In the case of private lands, the written permission of the owner or possessor of the land must be obtained before entering such lands. In either case, if said permission is denied, the Director, at the request of the interested person may intercede with the owner or possessor of the land. If the intercession fails, the interested person may bring suit in the Court of First Instance of the province where the land is situated. If the court finds the request justified, it shall issue an order granting the permission after fixing the amount of compensation and/or rental due the owner or possessor: Provided, That pending final adjudication of such amount, the court shall upon recommendation of the Director permit the interested person to enter, prospect and/or undertake other mining operations on the disputed land upon posting by such interested person of a bond with the court which the latter shall consider adequate to answer for any damage to the owner or possessor of the land resulting from such entry, prospecting or any other mining operations.

Section 13

SEC. 13. Areas Closed to Mining Location. -No prospecting and location shall be allowed:

(a)

In military, mineral and other reservations, except by the Government;

(b)

In lands covered by valid and subsisting mining claims located under previous mining laws;

(c)

In lands covered by mining claims or leases acquired in accordance with the provisions of this Decree; and

(d)

Near or under buildings, cemeteries, bridges, highways, waterways, railroads, reservoirs, dams, or any other public or private works, unless otherwise authorized by the Secretary with the permission of the Secretary of the Department of Public Works, Transportation and Communications.

The Secretary shall, upon recommendation of the Director, prescribe in detail the regulations implementing the various restrictions under this Section.

Section 14 Size of Mining Claim.

SEC. 14. Size of Mining Claim. - For purposes of registration of a mining claim under this Decree, the Philippine territory and its shelf are hereby divided into meridional blocks or quadrangles of one-half minute (1/2') of latitude and longitude, each block or quadrangle containing an area of eighty-one (8l) hectares, more or less.

A mining claim shall cover one such block although a lesser area may be allowed if warranted by attendant circumstances, such as geographical and other justifiable considerations as may be determined by the Director: Provided, That in no case shall the locator be allowed to register twice the area allowed for lease under Section 43 hereof.

Section 15 Declaration of Location of a Mining Claim.

SEC. 15. Declaration of Location of a Mining Claim. - A qualified person may locate a mining claim by filing with the Director or his designated deputy, a declaration of location covering a meridional block or fraction thereof constituting his mining claim in a form prescribed for the purpose.

Section 16 Recording of Declaration of Location, Ministerial.

SEC. 16. Recording of Declaration of Location, Ministerial. - Upon payment of the required filing fee, recording of a duly accomplished and notarized declaration of location for a mining claim shall be ministerial on the part of the recorder concerned.

Section 17 Mining Register.

SEC. 17. Mining Register. - The Director shall cause a mining register to be kept in the Bureau of Mines, or in such other places as he may designate, on which all instruments concerning mining rights, such as acquisition, sub-lease, operating agreements, transfers, assignments, abandonment, cancellation and others, are recorded and registered in chronological order of receipt upon payment of the required fee. On each instrument recorded and registered, shall be annotated the date and time of filing, document number, page of register, register book number, year series, the amount of fee paid, and the official receipt number.

Section 18 System and Effect of Recording Mining Instruments.

SEC. 18. System and Effect of Recording Mining Instruments. - All declarations of location, affidavits, authority, and all other documents or instruments regarding or affecting the possession of mining area or any right or title thereto, or interest therein, shall be recorded in the order of their receipt by the Mining Recorder after payment of the required fee, and from and after such recording, all documents or instruments in writing shall constitute notice to all persons and to the whole world of the contents of the same.

Section 19

SEC. 19. Registration, Filing and Other Fees. -The Director is authorized to charge reasonable filing and other fees as he may prescribe by regulation for services to be rendered by the Bureau of Mines. The registration and filing fees shall accrue to the Mines Special Fund, and other fees to the Fiduciary Fund.

Section 20 Right Acquired by Registration of the Declaration of Location.

SEC. 20. Right Acquired by Registration of the Declaration of Location. - The recording of a declaration of location for a mining claim shall give the claim owner, his successors and assigns, the right to occupy, explore and develop said claim from the date of the recording thereof subject to the provisions of Section 12 hereof.

Section 21

SEC. 21. Voluntary Abandonment of Mining Claim.-A claim owner may, at any time before a lease is granted, voluntarily abandon his mining claim by filing for record with the Director or his deputy, an affidavit of abandonment, and from the date of the recording of such affidavit all the rights and interests in such claim shall be deemed to have ceased: Provided, That the original locator or his successor or assigns shall not be allowed to relocate directly or indirectly the same claim.

Section 22 Designation of Mining Recorders.

SEC. 22. Designation of Mining Recorders. - The Director shall be responsible for the proper recording of mining instruments and documents and he is hereby authorized to designate such deputies in the Bureau of Mines whom he considers qualified to perform the duties of the mining recorder. Subject to the approval of the Secretary, the Director shall issue rules and regulations to insure proper recording of mining instruments and documents.

Section 23 Mining Regions.

SEC. 23. Mining Regions. - The existing mining regions with offices in Cebu, Baguio, Daet and Surigao shall be maintained. However, the Secretary, upon recommendation of the Director, may establish other mining regions as the need arises, the boundaries of which shall, so far as practicable, coincide with the boundaries of the corresponding provinces. When local conditions require, two or more provinces may be included in the same mining region.

Section 24 Expenditure Required.

SEC. 24. Expenditure Required. - A claim owner under this Decree and under the Mining Act (Commonwealth Act No. 137) as amended, shall perform annual work obligations on his mining claim, the value of which shall not be less than the following amounts:

Before the lease contract is granted, per hectare per calendar year ..............................P 20.00

After the lease contract is granted, per hectare per calendar year ............................... P100.00

A holder of a patentable claim shall before the grant of the patent applied for, perform annual work obligations on his mining claim, the value of which shall not be less than two hundred fifty pesos (P250.00) per hectare per calendar year.

The annual work obligations for each mining claim shall start with the calendar year immediately following the date of recording of such mining claim, and in the case of patentable and other claims the annual work obligations shall start with the calendar year following the date of the approval of this Decree.

Section 25 Group Development.

SEC. 25. Group Development. - The claim owner or lessee may concentrate all the annual work obligations on any one or more of several contiguous or geologically related mining claims in one province, if it can be shown to the Director that such concentration of work will be most advantageous and beneficial in the development and operation of said mining claims: Provided, That any expenditure in any calendar year in excess of the minimum amount required for work obligations per hectare may be carried forward and credited to the work obligations of the group claims for the succeeding year or years: Provided, further, That, if the expenditure incurred for any claim is less than that required in any year, the difference shall be paid to the Bureau of Mines which shall accrue to its Mines Special Fund.

Section 26 Legitimate Expenditure for Work Obligations.

SEC. 26. Legitimate Expenditure for Work Obligations. - Expenses for prospecting, exploration, and development work, including the costs of labor, materials and equipment used, and the fees and charges paid for geodetic, geological, geophysical, geochemical and other related surveys and for laboratory and pilot plant testing shall be considered legitimate expenditures for work obligations. The cost of buildings, machinery, equipment, roadways or other works shall be considered expenditures for work obligations if it is clearly shown that they are essential to the exploration and development of, or will facilitate the extraction of minerals from, the mining claims.

Section 27

SEC. 27. Proof of Annual Work Obligations. -The claim owner shall submit proof of compliance with the annual work obligations by filing a sworn statement with the Director within sixty (60) days from the end of the year in which the work obligation is required, in a form to be prescribed by regulation. Failure of the claim owner to file such proof of compliance for two (2) consecutive years shall cause the forfeiture of all rights to his claim.

Section 28 Lease Surveys.

SEC. 28. Lease Surveys. - Application for the survey of mining claims for lease purposes shall be filed with the Director within one (1) year from the date of the recording thereof. The Director may reject such application for cause or issue the corresponding order for survey. Failure to file the said application within this period shall constitute automatic abandonment of the mining claims and the lands embraced therein shall thereupon be open to location by qualified persons other than the original locator, his heirs, successors or assigns.

Section 29 Execution of Surveys.

SEC. 29. Execution of Surveys. - Survey of mining claims may be performed by a duly licensed geodetic engineer: Provided, That no geodetic engineer shall perform surveys of mining claims for lease, patent or permit purposes without the prior authority of the Director. Geodetic engineers shall comply with additional conditions including the posting of a bond to answer for the faithful and diligent execution of the survey. The Director, may issue such rules and regulations governing the manner of execution and verification of surveys of mining claims. All expenses of the survey shall be for the account of the applicant.

Section 30

SEC. 30. Adjustment to Astronomical Meridian. -In all surveys the astronomical meridian shall be made within the limits of accuracy prescribed by regulations. After the technical adjustments have been made, the resulting bearings and distances between consecutive corners as computed from the adjusted data shall be adopted and recognized.

Section 31 Monumenting of Surveys.

SEC. 31. Monumenting of Surveys. - At the time of the survey, it shall be the responsibility of the geodetic engineer to mark the corners of mining claims with concrete monuments or with such other objects of a permanent nature as may be prescribed by regulations.

Section 32 Period for Submittal of Lease Survey Returns.

SEC. 32. Period for Submittal of Lease Survey Returns. - A geodetic engineer ordered to survey mining claims shall submit the survey returns to the Director within one (1) year after receipt of the survey order. Failure to submit the survey returns within said period is sufficient cause for cancellation of the surveyor's surety bond and/or cancellation of the survey order. No extension of period within which to submit survey returns shall be allowed unless for reasons of force majeure.

Section 33 Mines Temporary Permit.

SEC. 33. Mines Temporary Permit. - Pending the issuance of the lease contract the claim owner may apply with the Director for a mines temporary permit to extract and dispose of the minerals from his claim, subject to the payment of taxes and royalties due and to the further condition that the claim owner has complied with his other obligations on the claim. This mines temporary permit may be issued by the Director for a period of one (1) year, renewable once only for a like period: Provided, That the claim owner shall file a surety bond in an amount to be fixed by the Director.

Notwithstanding the foregoing provisions of this section, the Director may allow the extraction and removal of representative samples for laboratory, scientific and test purposes, in such quantity as the Director may determine.

Section 34 Time Limit to Apply for Lease.

SEC. 34. Time Limit to Apply for Lease.- Application for lease of mining claims shall be filed with the Director within two (2) years from the date of the recording thereof. Failure to file the said application within this period automatically constitutes absolute abandonment of the mining claims, and the land embraced therein shall be open to location by qualified persons other than the original locator, his heirs, successors and assigns.

Section 35 Application for Lease for Contiguous Claims.

SEC. 35. Application for Lease for Contiguous Claims. - A single application for lease may be filed and a single lease may be granted covering adjoining or contiguous mining claims belonging to the same claim owner: Provided, That the total area under a single lease application shall not exceed the maximum number of hectares that may be held or leased in any one province by the applicant.

Section 36 Application Form.

SEC. 36. Application Form. - All applications for mining lease shall be in the prescribed form and under oath, it shall state, among others, the full name, address, citizenship, civil status of the applicant, his place and date of birth. If the applicant is a partnership or corporation, the application shall be accompanied by (1) certified copy of the duly registered articles of partnership or incorporation, (2) a certified copy of the duly registered by-laws, (3) a statement under oath certifying to the percentage of ownership of the partnership or corporation by Filipinos and aliens, and (4) a certified list of the officers, directors and partners. There should be attached to each application a report prepared by a duly licensed geologist or mining engineer to the effect that the mining claim shows adequate mineralization.

Section 37

SEC. 37. Qualification of Lease Applicant. -In addition to the qualifications required of a locator, an applicant for a mining lease shall present proof of the availability of technical competence and financial resources sufficient to develop the claim applied for. The regulations shall prescribe in detail the additional qualifications herein required.

Section 38

SEC. 38. Application Forms Part of Lease Contract. All statements in the application and those submitted in support thereof shall be considered as conditions of the lease. Any falsehood made in these statements or omissions which may alter, change or affect substantially the facts set forth therein shall constitute sufficient cause for denial of the application or the cancellation of the lease granted.

Section 39 Publication of Lease Application.

SEC. 39. Publication of Lease Application. - If the Director finds the application in order, he shall cause the publication of the notice of the application once a week for two (2) consecutive weeks in two (2) newspapers, one of general circulation published in Manila either in Pilipino or English and another published in the municipality or province where the mining claim is situated, if there be such newspaper, otherwise in the newspaper published in the nearest municipality or province. The Director shall also cause posting of the said notice on the bulletin board of the Bureau of Mines for two (2) consecutive weeks and shall order the applicant to post for the same period the notice and a copy of the approved plan of the mining claims on the bulletin boards of the municipal building of the municipality, and the mines regional office where the mining claim is located. Immediately after the expiration of the period of publication, the applicant shall file with the Director an affidavit attesting to the fact that the required notices and approved plan have been posted at the required places and during the specified period.

Section 40

SEC. 40. Issuance of Mining Lease Contract. -If no adverse claim is filed within fifteen (15) days after the first date of publication, it shall be conclusively presumed that no such adverse claim exists and thereafter no objection from third parties to the grant of the lease shall be heard, except protest pending at the time of publication, and the Secretary shall approve and issue the corresponding mining lease contract after the area has been verified as to its mineralization and the due execution of the lease survey, which contract shall be for a period not exceeding twenty-five (25) years, renewable under such terms and conditions as may be provided by law for another period not exceeding twenty-five (25) years. Upon the expiration of the lease, the operation of the mine may be undertaken by the Government through one of its agencies or through a qualified independent contractor. The contract for the operation of a mine by an independent contractor shall be awarded to the highest bidder in a public bidding held after due publication of the notice thereof: Provided, That the lessee shall have the right to equal the highest bid upon reimbursement of all reasonable expenses of the highest bidder.

Section 41 Withdrawal from Lease.

SEC. 41. Withdrawal from Lease. - The lessee may, at any time during the life of the lease, apply for the cancellation of the lease contract due to force majeure or for other causes which render continued mining operations no longer profitable.

Section 42 Mining Lease on Private Land.

SEC. 42. Mining Lease on Private Land. - A mining lease may be granted on mining claims located on private lands: Provided, That the applicant shall submit a written authority of the landowner. If the landowner refuses or fails to enter into an agreement with the applicant, the latter shall have the remedy provided for in Section 12 of this Decree.

Section 43 Maximum Lease Area Allowed.

SEC. 43. Maximum Lease Area Allowed. - The maximum area of mining claims which may be leased shall be as follows:

(1)

In any one province:

(a)

To Individuals, Five Hundred Hectares;

(b)

To Mining Partnerships or Corporations, Five Thousand Hectares;

(2)

In the entire Philippines:

(a)

To Individuals, One Thousand Hectares;

(b)

To Mining Partnerships or Corporations, Ten Thousand Hectares.

The foregoing provisions of this section notwithstanding, the Director with the approval of the Secretary, may allow an applicant to lease a larger area not exceeding 10,000 hectares in any one province, depending upon the nature of the deposit, the kind of minerals located, and other circumstances inherent in the operation of the mining claim justifying the grant.

Section 44 Mining Lease Rights.

SEC. 44. Mining Lease Rights. - A mining lease contract shall grant to the lessee, his heirs, successors and assigns the right to extract all mineral deposits found on or underneath the surface of his mining claims covered by the lease, continued vertically downward; to remove, process, and otherwise utilize the mineral deposits for his own benefit; and to use the lands covered by the lease for the purpose or purposes specified therein: Provided, however, That the Secretary shall reserve the right to grant and use easements in, over, through, or upon the said claims as may be needed by other claim owners or lessees for right-of-way to enable them to have access to and/or facilitate the operation of, their mining claims: Provided, further, That in case of conflict of interest between claim owners for this purpose the Director is hereby authorized to mediate: Provided, furthermore, That in granting any lease under this Decree the Government reserves the right to lease, or otherwise dispose of the surface of the lands embraced within such lease which is not needed by the lessee in extracting and removing the mineral deposits from his mining claims, or in the beneficiation of the ores extracted therefrom: Provided, finally, That a lessee may on his own or through the Government, enter into a service contract with a qualified domestic or foreign contractor for the exploration, development and exploitation of his claims and the processing and marketing of the product thereof, subject to the rules and regulations that shall be promulgated by the Director, with the approval of the Secretary, and on the condition that if the service contractor will provide the necessary financial and technical resources, he may be paid from the proceeds of the operation not exceeding forty per centum (40%) thereof. Service contracts shall be approved by the Secretary upon recommendation of the Director.

Section 45 Laws and Regulations Considered Part of Lease Contract.

SEC. 45. Laws and Regulations Considered Part of Lease Contract. - All mining lease contracts shall contain a provision that the lessee shall comply with the provisions of this Decree and with all the rules and regulations promulgated concerning the safe operation and sanitary upkeep of the mines as well as pollution control laws and regulations.

Section 46 Termination of Lease Rights.

SEC. 46. Termination of Lease Rights. - Immediately after a mining lease contract is cancelled or otherwise terminated, the Director shall cause the same to be entered in the mining register and a notice thereof shall be posted on the bulletin board of the Bureau of Mines, and the lands covered thereby shall thereupon be open to location and lease by other qualified persons.

Section 47 Removal of Improvements.

SEC. 47. Removal of Improvements. - The lessee shall within one (1) year from the abandonment, termination or cancellation of the lease, remove all improvements on the mining premises, except roads and bridges; otherwise said improvements shall become the property of the Government.

Section 48 Protests and Adverse Claims.

SEC. 48. Protests and Adverse Claims. - Any protest or adverse claim of any nature whatsoever involving the right to possession, lease, exploration or exploitation of any mining claim in any part of the Philippines shall be filed with the Bureau of Mines for investigation and decision pursuant to the provisions of Presidential Decree No. 309 and Letter of Instructions No. 119, as amended by Letter of Instructions No. 135. The protest or adverse claim shall be under oath and shall state in detail the nature thereof and shall be accompanied by all plans, documents, and other data upon which the protest or adverse claim is based.

In the case of an adverse claim against a lease application, filed under Section 34 hereof; such adverse claim shall be filed within fifteen (15) days after the first date of publication of the notice of lease application if such claim was not previously investigated and decided under Presidential Decree No. 309. When an adverse claim is filed under this paragraph, all proceedings, except the publication of the notice of application for lease, the submmittal of the affidavit in connection therewith and the processing of applications for temporary permit, shall be stayed until the controversy is settled or decided by the Director: Provided, That the operations and production under a mines temporary permit issued prior to the adverse claim shall be allowed to continue subject to the provisions of Section 33 concerning the posting of bonds.

Section 49 Priority Rights.

SEC. 49. Priority Rights. - In case of conflict of mining claims, priority of recording shall determine the right to the area, notwithstanding any defect in form or technicality as provided for in Presidential Decree No. 99-A: Provided, That in case of discrepancy between the area described in the declaration of location and the actual area occupied on the ground, the former shall prevail, subject to any question as to the validity of the location of the claim and to the locator's having complied with all the requirements of this Decree.