The Supreme Court recently affirmed that qualified mining operators have the authority to exercise eminent domain. Consequently, mining companies may expropriate lands which are covered by their exploration permit.
In Agata Mining Ventures, Inc. v. Heirs of Alaan, G.R. No. 229413 (15 June 2020), the Supreme Court ruled on whether a mining company, which entered into an Operating Agreement with another mining company for the transfer of the latter’s exclusive mining rights under a Mineral Production Sharing Agreement (“MPSA”), can validly file a complaint to expropriate property covered by the mining area under the MPSA.
The case began when a mining company filed a complaint for expropriation before the Regional Trial Court (“RTC”) after a negotiated purchase with certain landowners failed. The RTC issued a writ of possession as prayed for by the mining company. When the issuance of the writ was questioned by the landowners on certiorari, the Court of Appeals held that the mining company, being a mere private entity, may not validly exercise the power to expropriate property without violating the constitutional principle of non-delegation of State powers. On review, the Supreme Court reversed the Court of Appeals and ruled that Congress has conferred the power to expropriate upon mining companies through various mining laws, specifically Commonwealth Act No. 137, Presidential Decree (“P.D.”) No. 463, P.D. No. 512 and, most recently, Republic Act No. 7942 or the Mining Act.
The Supreme Court also reiterated its 2006 ruling in Didipio Earth-Savers Multi-Purpose Association, Inc. v. Gozun, G.R. No. 157882 (30 March 2006), which “already settled that qualified mining operators have the authority to exercise the power of eminent domain”. In doing so, it restated its clarification in Didipio, supra, that the “entry referred to in Section 76 [of the Mining Act] is not just a simple right-of-way which is ordinarily allowed under the provisions of the Civil Code” but a taking (i.e., expropriation) provision. This is because “the holders of mining rights enter private lands for purposes of conducting mining activities such as exploration, extraction and processing of minerals” and “will definitely oust the owners or occupants of the affected areas the beneficial ownership of their lands.” Thus, the Supreme Court expressly confirmed that qualified mining operators have the authority to exercise the power of eminent domain.
On another point, the Supreme Court also ruled that the Mining Act authorizes a grantee of an exploration permit to transfer or assign its rights to another operator subject to the approval of the Government. As a consequence, the transferee of such rights steps into the shoes of the transferor and enjoys the latter’s privileges. As a transferee of such mining rights, the subject mining company may validly file for a complaint to expropriate the subject property.
Finally, the Supreme Court ordered the RTC to proceed with a determination of the validity of the Operating Agreement between the original MPSA holder and the petitioner mining company, further to the adjudication of the latter’s right to expropriate the subject land.