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TO:	MINISTRY OF NATURAL RESOURCES BUREAU OP MINES & GEO-SCIENCES NATIONAL DEVELOPMENT COMPANY

WHEREAS, it is the policy of the state to encourage the exploration and development of  indigenous mineral resources;

WHEREAS, National Development Company (NDC), through Philippine Phosphate Fertilizer Corporation (PHILPHOS), is erecting a phosphate fertilizer plant;

WHEREAS, this plant requires initially an annual amount of 1.2 million tons of phosphate rock per annum;

WHEREAS, by virtue of Proclamation Nos. 2158 and 2356, the President of the Philippines has set aside, subject to existing private rights, phosphate bearing lands and deposits within the islands of Leyte, Biliran Sub-Province of Leyte and Camotes Island, and the Islands of Panay, Negros, Cebu, Bohol, Masbate, Guimaras, and Siquijor as phosphate reservations under the administration of NDC;

WHEREAS, in addition to these areas set aside as phosphate reservations, there are existing private rights more particularly defined as mining claims/leases or quarry permits covering phosphate bearing land areas;

WHEREAS, these existing leases and permits are small and fragmented thereby leading to uneconomic techniques of extraction and development;

WHEREAS, the need to conserve foreign exchange requires the immediate acceleration of local phosphate production consistent with good mining practice;

NOW, THEREFORE, it is hereby directed that:

1. The Ministry of Natural Resources, through the Bureau of Mines and Geo-Sciences, prepare a list of all valid and subsisting mining claims/quarry permits for phosphate rock.
   
   
2. This list shall be submitted to NDC within thirty (30) days of issuance of this LOI.  NDC shall, together with the Bureau of Mines, validate this list within a period of ninety (90) days, to determine the following:
   
   
   1. the technical and financial competence of lessee/ permittee;
      
      
   2. appropriateness and viability of the work program of the lessee/permittee consistent with the urgent need to eliminate the need for importation of phosphate rock.

If such validation shall show the financial and technical competence of operator/permittee and viability of its work program all appropriate government agencies shall extend full support to operator/permittee in furtherance of their production objectives, placing first priority on the needs of PHILPHOS.

Should the results of the validation show the lack of financial capability and/or technical expertise to develop and exploit the area at an economic rate within a reasonable length of time, the Bureau of Mines, with the assistance of the NDC, shall give the permittee ninety (90) days to correct such a defect which, if not corrected, shall be disqualified from applying for other areas. This Letter of Instructions shall take effect immediately.

Done in the City of Manila, this 5th day of May, in the year of Our Lord, nineteen hundred and eighty-four.