Philippines sources 68% of gold from small miners

Small scale mining generates more than half of the country's total gold metal production in a year. The country, however, doesn't benefit fully from it.

MANILA, Philippines – Small scale mining (SSM) is not at all small, as it generates more than half of the country’s total gold metal production in a year. 

The country, however, doesn’t benefit fully from it.

Leo Jasareno, director of Department of Environment and Natural Resources (DENR) Mines and Geosciences Bureau, said at a mining forum on March 2 that SSM takes up the sizable amount of gold production of the country. 

“Of our 30,000 kilos of gold metal production in a year, 68% comes from small scale mining. It means small scale mining is bigger,” he said.

The problem, however, is that most SSM operations are illegal. Jasareno admitted that there are some large companies that obtained small scale mining permits with local governments to speed up the process of getting a permit, as well as to benefit from the tax-free priviledge of SSM operations.

He revealed that the government has not been able to collect tax from them. Since 2009, the uncolleted excise tax has amounted to at least P1.4 billion.

“Small scale mining must be good, but problem is they’re not doing it clean,” he said.

Initiatives

The Department of Environment and Natural Resources (DENR) has started filing complaints against illegal mining. “We’ve already caught a lot. We’re already filing complaints. We just haven’t issued cease and desist orders yet,” Jasareno said.

Jasareno added that the government is eyeing to limit small scale mining through the proposed “Minahang Bayan” program. Under this program, local government units will not be allowed to issue SSM permits anywhere.

“Issuance of permits will only be under the Minahang Bayan in a cooperative (system). MGB will identify the areas, and it won’t be just anywhere. There is only one area, although there can be several tunnels under it, unlike now where there numerous holes anywhere,” he said.

Jasareno added that since residents in mining sites benefit from jobs generated by SSM operations, the government will also use “Minahang Bayan” as an instrument to mineral processing at the small scale level, like producing jewelries, cooking equipment and devices.

“Just give this administration a little time. We will address that,” Jasareno said.

Central bank

Gold remains the king of Philippine metals, accounting for about half of the earnings of the mining industry.

The Bangko Sentral ng Pilipinas (BSP) is required by the Republic Act No. 7076 (People’s Small Scale Mining Act of 1991) to purchase gold from small-scale miners, as well as from other sources.

The central bank then refines the gold purchased to forms acceptable in the international bullion markets.

BSP’s gold purchases from small-scale miners account for about 3/5th of the country’s gold production.

Central banks worldwide are stepping up gold purchases to boost their reserves. – Rappler.com

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