Southeast Mindanao Gold Mining Corp. vs. Balite Portal Mining Cooperative, et al.

GR No. 135190 – 09 April 2002

FACTS: This case involves a rich tract of mineral land situated in Agusan-Davao-Surigao Forest River or
known as Diwalwal Gold Rush Area. Diwalwal has been embroiled in controversy with hundreds of
people perishing in mine accidents, man-made or otherwise, brought about by unregulated mining
activities. On March 10, 1988, Marcopper was granted an Exploration Permit No. 133 (EP No. 133) over
4,491 hectares of land which included the Diwalwal area. This acquisition of mining rights by Marcopper
was challenged by Apex. However, the Court found out that Apex did not comply with the procedural
requisites of acquiring mining rights within forest reserves.

Subsequently, Congress enacted RA 7076 or the Peoples Small-Scale Mining Act where DENR issued an
Order declaring 729 hectares of Diwalwal area as non-forest land open to small-scale mining. Later on, a
petition for cancellation of EP No. 133 was filed before DENR and while the case is pending, Marcopper
assigned its EP No. 133 to petitioner herein Southeast Mindanao Gold Mining Corp.

On March 3, 1995, RA 7942 or the Philippine Mining Act was enacted which later on allow, through
Provincial Mining Regulatory Board of Davao, issuance of ore transport pertmits (OTPs) to small -scale
miners operating in Diwalwal mines. With this, petitioner file a complaint contending that the illegal
issuance of OTPs allowed extravtion and hauling of P60,000.00 worth of gold. On 24 June 1997,
Memorandum 97-03 was issued by the DEBR secretary providing for a direct state utilization.

ISSUE: Whether or not the Memorandum issued by the Secretary of DENR divested petitioner’s right to
the gold rush area under EP No. 133.

HELD: No. The challenged Memorandum 97-03 did not conclusively adopt direct state utilization as
policy in resolving Diwalwal dispute. The terms of the Memorandum clearly indicate that what was
directed thereunder was merely a study of this option and nothing else. It did not grant any
management/operating profit-sharing agreement to small-scale miners or to any party but it simply
instructed DENR officials concerned to undertake studies to determine its feasibility.