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Southeast Mindanao Goldmining Corporation v. Balite Portal Mining

G.R. No. 135190, April 3, 2002
YNARES-SANTIAGO, J

Facts:

 It involves a rich tract of land in Diwalwal Gold Rush Area which they believe that it contains rich gold
deposit
 As people rush in the location peace and order was compromise which includes unregulated mining
activities.
 Congress enacted People's Small-Scale Mining Act which includes supervision and control also
award mining contracts to small scale miners under certain condition.
 DENR Secretary Factoran issued Department Administrative Order 66 declaring 729 hectares of
Diwalwal area as non-forest and open for small scale mining.
 A petition was filed to cancel Exploration Permit No 133 ( EP No. 133) Mineral Production
Sharing Arrangement (MPSA) proposal over Diwalwal titled "Rosendo Villaflor, et al. v.
Marcopper Mining Corporation."
 Marcopper assigned its EP No. 133 to petitioner Southeast Mindanao Gold Mining Corporation
(SEM) which in turn applied for an integrated MPSA over the land covered by the permit

 March 3, 1995, RA 7942 the Philippine Mining Act, was enacted. According to the law, Mine
Administrative Case was ask to resolve the issue involving conflicting mining rights.
 A resolution was issue by the Provincial Mining Regulatory Board of Davao authorizing the
issuance of ore transport permits (OTPs) to small-scale miners operating in the Diwalwal mines.
 DENR Secretary Issue Memorandum Order 97-03 wherein DENR shall studying and weighing the
feasibility of entering into management agreements or operating agreements, or both, with the
appropriate government instrumentalities or private entities, or both, in carrying out the
declared policy of rationalizing the mining operations in the Diwalwal Gold Rush Area
 Petitioner filed a civil action and prayed for the nullification of the memorandum 97-03 on the ground
that the "direct state utilization" espoused therein would effectively impair its vested rights under EP No.
133
 Mines Adjudication Board (MAB) rendered a decision in the consolidated Mine Administrative
Case (MAC) setting aside the judgment of the RPA.
 The court of appeals rendered a decision that DENR Secretary did not abuse his discretion in
issuing Memorandum Order No. 97-03 since the same was merely a directive to conduct studies
on the various options available to the government for solving the Diwalwal conflict.
 Petitioner filed a motion for reconsideration which was denied due to lack of merit.

Issue:

Whether or Not the DENR acted within its capacity its Police Power
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Ruling:

Yes the DENR acted within its capacity. It must be noted that EP 133 does not offer total and absolute
right it only granted privileges to the petitioner. Such privilege granted by the state can be amended,
modified or rescinded when the national interest so requires. This is necessarily so since the exploration,
development and utilization of the country's natural mineral resources are matters impressed with great
public interest. Like timber permits, mining exploration permits do not vest in the grantee any
permanent or irrevocable right within the purview of the non-impairment of contract and due process
clauses of the Constitution, since the State, under its all-encompassing police power, may alter, modify
or amend the same, in accordance with the demands of the general welfare.