G.R. No. 199081, January 24, 2018
ASIGA MINING CORPORATION, Petitioner vs. MANILA MINING CORPORATION and BASIANA MINING EXPLORATION CORPORATION, Respondents

FACTS

Petitioner Asiga Mining Corporation held mining claims granted under the Mining Act of 1936, which were subsequently recognized under Presidential Decree No. 463 (the Mineral Resources Decree of 1974). When Republic Act No. 7942 (the Mining Act of 1995) took effect, Asiga applied to convert its claims into a Mineral Production Sharing Agreement (MPSA). During this process, Asiga discovered that its claims overlapped with the pending MPSA applications of respondents Manila Mining Corporation and Basiana Mining Exploration Corporation, which were filed earlier. Asiga then filed an Adverse Claim with the Mines and Geosciences Bureau, asserting its vested rights under its existing mining claims and praying for the exclusion of the overlapping areas from the respondents’ applications.
The respondents moved to dismiss Asiga’s claim, arguing prescription and abandonment. They contended that Asiga failed to file its adverse claim within the 30-day period from the publication of their MPSA applications and, crucially, that Asiga had abandoned its mining claims by failing to file an Affidavit of Annual Work Obligation (AAWO) for more than two consecutive years. The Panel of Arbitrators initially ruled in favor of Asiga, ordering the exclusion of its valid claims from the respondents’ applications. However, the Mines Adjudication Board (MAB) reversed this, upholding the respondents’ arguments on abandonment. The Court of Appeals affirmed the MAB’s decision.

ISSUE

Whether Asiga’s mining claims were deemed abandoned due to its alleged failure to perform its annual work obligations and file the corresponding AAWOs, thereby rendering the areas open to the respondents’ MPSA applications.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the Decision of the Panel of Arbitrators. The Court held that a declaration of abandonment of a mining claim for non-performance of annual work obligations requires strict compliance with due process. Under the governing Mineral Resources Decree of 1974, as interpreted by jurisprudence, the government must first make a factual determination of non-performance and then provide the claimholder with notice and an opportunity to be heard before a claim can be legally declared abandoned. The mere failure to file an AAWO, by itself, is not sufficient to constitute automatic abandonment.
The Court found that there was no such prior administrative declaration of abandonment against Asiga’s claims. The respondents’ assertion of abandonment was a collateral attack on the validity of Asiga’s claims, which remained valid and existing until properly cancelled through a direct proceeding that observes due process. Consequently, Asiga’s mining claims, being valid and existing, constituted areas closed to new mining applications under Section 19(c) of the Mining Act of 1995. The overlapping portions of the respondents’ MPSA applications should therefore be excluded, as initially ordered by the Panel of Arbitrators.