FACTS:

The Central Mindanao Mining and Development Corporation (CMMCI) entered into a Mines Operating Agreement with Banahaw Mining and Development Corporation (Banahaw Mining). Banahaw Mining filed applications for Mining Lease Contracts over the mining claims with the Bureau of Mines and was granted a Mines Temporary Permit. Banahaw Mining later assigned its rights and interests to Base Metals Mineral Resources Corporation (Base Metals) and Base Metals became the new operator of the mining claims. PICOP filed an Adverse Claim and/or Opposition to Base Metals' application, arguing that it violated the non-impairment clause of the Constitution and defeated its rights as the adverse claimant. Base Metals argued that the Adverse Claim was filed out of time and that PICOP has no rights over the mineral resources.

The case involves the dispute between Base Metals and PICOP regarding the approval of Base Metals' Mineral Production Sharing Agreement (MPSA) applications for certain areas covered by a Presidential Warranty and claimed by PICOP. Base Metals filed MPSA applications but PICOP opposed them, stating that its consent was necessary for their approval. After the submission of their respective position papers, the Panel Arbitrator set aside Base Metals' MPSA applications. Base Metals appealed to the Mining Adjudication Board (MAB), which reinstated and gave due course to Base Metals' applications. The Court of Appeals upheld the MAB's decision.

The case involves a dispute between PICOP and Base Metals over mining operations in certain concession areas. PICOP argues that the mining areas are closed to mining operations without its written consent and that mining is prohibited in the wilderness area. PICOP also argues that Base Metals' lack of an exploration permit should have prevented the reinstatement of its MPSA. Furthermore, PICOP argues that the Presidential Warranty issued to it is a valid contract with mutual obligations. Base Metals argues that PICOP never previously raised issues regarding land classification or the exclusion of the disputed area from mining activities.

The case involves a controversy between Base Metals and PICOP regarding the issuance and reinstatement of a Mineral Production Sharing Agreement (MPSA) for a specific area covered by PICOP's Integrated Forest Management Agreement (IFMA). Base Metals argues that PICOP's appeal raises new issues and misinterprets certain laws. They argue that the area is not proclaimed as a protected area under the National Integrated Protected Areas System (NIPAS). Base Metals also claims that the non-impairment clause in the Constitution does not prevent the reinstatement of the MPSA. They argue that the State has the authority to enter into contractual agreements for mining activities even if it requires amending or revoking PICOP's timber license. Lastly, Base Metals points out that PICOP's timber license only requires notice, not consent, for mining activities.

ISSUES:

1. Whether the area is classified as a permanent forest and closed to mining activities.

2. Whether the Presidential Warranty is a valid and subsisting contract between PICOP and the Government.

3. Whether mining operations are legally permissible over PICOP's concession areas.

4. Whether the alleged wilderness area falls within the coverage of the restrictive provisions of RA 7586.

5. Whether the area covered by the Mining Production Sharing Agreement (MPSA) is classified as permanent forest and closed to mining activities.

6. Whether PICOP raised new issues in the instant petition.

7. Whether the concession area of PICOP is closed to mining applications under Sec. 19 of RA 7942.

8. Whether mining activities are allowed in government reservations.

9. Whether the consent of existing licensees is required before mining activities can be commenced inside forest concessions.

10. Whether the area covered by Base Metals' Mineral Production Sharing Agreement (MPSA) is closed to mining activities.

11. Whether the Presidential Warranty is a contract protected by the non-impairment clause of the 1987 Constitution.

12. Whether the Presidential Warranty is a contract distinct from the Timber License Agreement (PTLA) and Integrated Forest Management Agreement (IFMA).

13. Whether the non-impairment clause of the Constitution is applicable to timber licenses.

RULING:

1. The Court held that the area is not classified as a permanent forest, and mining operations are legally permissible over PICOP's concession areas.

2. The Court ruled that the Presidential Warranty is not a contract separate from PICOP's timber license, and it cannot amplify PICOP's rights under its PTLA No. 47 and IFMA No. 35.

3. The Court held that mining operations are legally permissible over PICOP's concession areas, subject to existing rights and reservations, and subject to State regulation and mining laws.

4. The Court ruled that the alleged wilderness area has not been designated as a protected area, and therefore, it does not fall within the coverage of the restrictive provisions of RA 7586.

5. The Court held that the area covered by the MPSA is not classified as permanent forest and is open to mining activities. This is based on the fact that Congress has yet to enact a law determining the specific limits of the forest lands covered by Proclamation No. 369 and marking clearly its boundaries on the ground. Therefore, there can be no violation of the constitutional provision.

6. The Court ruled that the so-called new issues raised by PICOP are well within the issues framed by the parties in the proceedings a quo, thus they are not being raised for the first time on appeal. PICOP's arguments were given ample opportunity to be responded to by Base Metals and the OSG. The Court deemed it essential to settle the crucial question of whether the concession area in dispute is open to mining activities.

7. The court concluded that PICOP's concession area is not closed to mining activities under Sec. 19 of RA 7942. The provision only prohibits mining applications in specific areas, such as military and government reservations, areas prohibited by law, and certain protected areas. However, it does not expressly prohibit mining in the Agusan-Surigao-Davao Forest Reserve where the concession area is located.

8. Mining activities can be allowed in government reservations upon prior written clearance by the government agency having jurisdiction over the reservation. Sec. 15(b) of DAO 96-40 provides for the opening of government reservations for mining applications. Additionally, Sec. 6 of RA 7942 allows the Department of Environment and Natural Resources (DENR) to undertake mining operations in reserved lands, subject to certain limitations.

9. No, the consent of existing licensees is not required. The mining activities may be commenced inside forest concessions upon proper notice to the licensees, as provided for in Section 47 of PD 705.

10. No, the area covered by Base Metals' MPSA is not closed to mining activities. There is no evidence presented to show that the area is designated as a protected wilderness area pursuant to a law, presidential decree, presidential proclamation, or executive order.

11. No, the Presidential Warranty is not a contract protected by the non-impairment clause of the 1987 Constitution. The warranty only guarantees PICOP's peaceful and adequate possession and enjoyment of the areas for timber cutting, collection, and removal, but does not extend to the utilization of other resources.

12. The Presidential Warranty cannot be considered a contract distinct from PTLA No. 47 and IFMA No. 35. It is merely a collateral undertaking that cannot amplify the rights of the respondent under its timber license.

13. Timber licenses are not considered contracts within the purview of the non-impairment clause. They are licenses or privileges that can be validly revoked or rescinded by executive action whenever dictated by public interest or welfare.

PRINCIPLES:

• The non-impairment clause under the Constitution is a limit on the exercise of legislative power and not of judicial or quasi-judicial power.

• A timber license is not a contract within the purview of the due process and non-impairment clauses.

• The Presidential Warranty is a mere collateral undertaking and cannot amplify the rights of the timber licensee.

• The State has the power to enter into contractual arrangements for the exploration, development, and extraction of minerals, even if it means amending or revoking previous licenses or contracts.

• Mining operations are legally permissible over forest lands subject to existing rights and reservations, and subject to State regulation and mining laws.

• The area covered by forest lands and national parks may not be expanded or reduced except by congressional legislation.

• Multiple land use is a policy enshrined in the law, seeking to rationally explore, develop, utilize, and conserve the country's natural resources.

• Mining contractors may be granted auxiliary mining rights within timber concessions, but proper compensation must be provided for any damage done to the property as a consequence of mining operations.

• Mining applications are prohibited in specific areas, such as military and government reservations, areas prohibited by law, and certain protected areas, as provided under Sec. 19 of RA 7942.

• Mining activities can be allowed in government reservations upon prior written clearance by the government agency having jurisdiction over the reservation, as provided under Sec. 15(b) of DAO 96-40.

• The DENR can undertake mining operations in reserved lands, subject to limitations, as provided under Sec. 6 of RA 7942.

• Notice to existing licensees is required before mining activities can be commenced inside forest concessions.

• The area covered by a Mineral Production Sharing Agreement (MPSA) is open to mining activities unless designated as a protected wilderness area pursuant to a specific law or proclamation.

• The non-impairment clause of the 1987 Constitution does not protect warranties or guarantees that are limited in scope and do not cover the utilization of other resources.

• A timber license is not a contract, property, or property right protected by the due process clause of the Constitution. It is a license or privilege that can be withdrawn whenever necessary for public interest or welfare.

• Timber licenses, permits, and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources. They do not vest in the licensee a permanent or irrevocable right to the concession area and the forest products therein.

• The non-impairment clause of the Constitution does not apply to timber licenses since they are not contracts.