Domingo G.

Gerard Domingo January 22, 2013

2012-30430 Mr. T.D. Chavez

Eng 10

The Illegal Gold Mining in the Philippines for the Past Ten Years

A curiosity in the Philippine gold mining industry has brought this study. After knowing

the background of the mining in our country many questions entered my mind. One of them is

the illegal aspect of the industry and how the government act upon this problem. Knowing that

one of the most precious and most expensive minerals in the world is gold, how can the

government regulate such activities in the country? Also, we discussed in Geology 11 class that

according to statistics the Philippines, ranked 2nd in the top producers of gold in the Southeast

Asia region back in 2002 and 18th in the world according to the 2011 survey. So I think not just

local Filipinos are eying for these minerals but also foreign investors and companies.

Mining is a process wherein the minerals from the earth are being extracted. This can be

an opencast, underground or fluid. In opencast mining, minerals are being extracted from the

earth’s surfaces and shallow areas while underground mining engages digging out beneath the

surface, usually 10, 000 ft deep. In the other hand, fluid mining is removing the minerals from

natural brines, lakes, oceans and other bodies of water. (“McGraw-Hill Science and Technology

Encyclopedia: Mining”, 5)

In the Philippines, as early as the pre-historic period, mining is very essential. We

discussed in our Kas 1 class last semester that at that era raw gold was already been used for
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regular trading systems. Years passed and the Spaniards occupy our land, they introduced to our

ancestors the Mercantilism type of economy to which it resulted to the stockpiling of precious

metals. About 50 years before the Americans took charge of the Philippines, the Spaniards

implemented the First Philippine Mining Law to regulate all the mining activities since the

industry that time was flourishing. In fact, many companies opened and one of them was the

Lepanto Mine which focused on copper and gold production. Then the Americans came and

established the Second Philippine Mining Law also known as the Philippine Bill of 1902. In

1907, the Benguet Mine was established along with 17 other gold mines were opened at the

Baguio region. In short terms, this is the beginning of the exploitation of the Philippine mineral

resources of the Americans. And the 1930’s period was considered as the peak of the U.S.

Colonial Period. At this time, the large-scale mining industry in the Philippines entirely

flourished. This improvement was disrupted when the Japanese invaded the Philippines. Years

later, the Philippines acquired independence and at the same time, the mining businesses came

back to its highest point. Biggest companies such as Atlas, Sipalay and Philex were then built.

The “Golden Age” of the Philippine big mining came during the 1960’s to the 1980’s. Many

foreign investors retained their pre-existing trade patterns and ownership of mining industries

with the local investors. The implementation of the Martial Law and the support of the late

President Ferdinand E. Marcos to the mining commerce helped in the progress of the business.

But the termination of the Marcos power and the end of the Martial Law led to the “Dark Period”

of the mining industry. The international market collapsed and brought low prices for the

principal metal products. The number of the big exporting traders rapidly decreased. In line with

this fall, the government conducted major studies on the country’s mineral potentials with the aid

of other countries like United States of America and Japan in cooperation with the United
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Nations Development Program (UNDP) and the Asian Development Bank (ADB). As a result,

the industry was bombarded with even more analyses regarding whether the country’s resources

are suitable for the field. (“Historical Sketch of the Mining Industry”, 7)

After all that had happened, there are various mining laws were passed at the Senate and

the House of Representatives of the Philippine Congress. One of them is the Republic Act No.

7942 also known to be “Philippine Mining Act of 1995”. According to this law, all the minerals

including gold that can be extracted inside the Philippine Area of Responsibility whether the

land/water is owned by a private sector will be possessed by the Philippine Republic and the one

responsible for this is the Mines and Geosciences Bureau under the Department of Environment

and Natural Resources. There should also be Regional Directors appointed by the secretary of

the department and the director of the bureau. For companies be allowed to do mining activities,

they should apply for an exploration permit. But there are restrictions because not all the areas in

the country can be mined such as military and government reservations. Also, given the permit

there is a maximum area where the miners can do their activities. The government has the power

to withdraw the permit whenever the company violates the guidelines and the terms and

conditions agreed upon the application of the permit. Written in the law, the safety and

environmental protection for the area and the laborers. The penalties and the fees are discussed

whenever the company violates the given conditions. (Philippine Mining Law of 1995, 10)

Another law is the Presidential Decree No. 1899 also known as the Small-Scale Mining

Law. According to this law, there should only be at most 50,000 metric tons of minerals can be

mined in a year. Small-scale miners should also seek an exploration permit as stated in the

Philippine Mining Law of 1995. Though they have the same laws, orders, rules and regulations
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to follow small-scale miners are exempted from all taxes unlike with the large-scale miners.

(Small-Scale Mining Law, 9)

One of the reasons why people go to illegal gold mining is that gold is one of the most

expensive minerals in the world. Gold is very resistant to react with water, oxygen and acids.

According to our Chemistry class, element that are least to react with the three substances, are

hardy corrosive and can easily be extracted from its ore. With the condition of gold there is zero

chances to corrode which makes it very expensive. In almost all countries, including the

Philippines, the price of gold is continuously increasing. In fact, in the past 10 years, the prices

of gold in different countries increase by an average of 15%. In the Philippines, as of 12:09 PM,

January 21, 2013, a gram of 24 Carat gold, considered as the pure gold, costs 2, 203.39 Php

(equivalent to $54.28 USD) and a gram of 21 Carat gold costs 1,927.88 Php (equivalent to

$47.50 USD). (Gold Price Network, 6)

Many issues and articles on illegal gold mining in the Philippines have been published in

many periodicals and in the internet. One of them is entitled “Old small-scale gold mining area

closed down”, published in the Manila Bulletin last July 2004. As stated in the news article, a

small-scale mining site in New Bataan, Compostela Valley after several tunnels were hitting

high-grade layers of gold. Also October of the last year, 42 other small-scale tunnels were closed

in Mt. Batutu in Barangay Santa Luisa because of the same reason. Also the mining in these

areas had no permits and considered illegal. (8) Another article is “Violence rules illegal gold

mining”, published in the Malaya Business Insight last September 2012. This concentrates on the

violence in Mindanao, specifically in Zamboanga del Sur where massive smuggling of illegally-

produced gold were occurring. There are reports that there had been ambushes made by the
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masterminds of the illegal mining activities in the region and one of them was the case of Manda,

a known anti-illegal gold mining devotee. Though she survived the ambush, her 11 year-old son

was killed. Fortunately, the suspects were already identified as the AK 76 group. (11) Joey

Gabieta of Inquirer News reported that another illegal gold mining activity had been going in

Eastern Samar. It was said that this illegal mining activity may trigger landslides in the Southern

Leyte area knowing that this region is a landslide prone area. Also stated in the article, people

mostly rely on farming but the high price of gold urged them to go to this illegal acts. (1)

One article by Rey Panaligan and Dexter See exposes an update on the Mount Diwalwal

Gold Rush Area issue in Mindanao. According to Panaligan and See, there was already a filed

case in the Supreme Court to cancel all mining operations within the Diwalwal Gold Rush Area,

this includes Agusan, Davao, Surigao Forest Reserves. This case has a connection to the

controversial NBN-ZTE deal. It is a $329-million NBN project deal with ZTE International

Investments Ltd., which is an investment arm of ZTE Corporation of China, for the exploration

of the Diwalwal Gold Rush Area. By this, the Southeast Mindanao Gold Mining Corporation

(SEM) reacted and they refer to the Proclamation No. 297 (issues on 2002) and the Executive

Order No. 318 (issued on 2004). The law states that the 8,100 hectare Diwalwal Gold Rush Area

is a mineral reservation but the counter law states that there would be provisions of various laws

and mandated that the re-classification of forest reserves may only be done by a law passed by

Congress. (4)

According to Nueva Vizcaya Gov. Luisa Cuaresma, she was leaving the decision to the

people, who live in Kasibu Town in Bayombong, near the mining sites and are affected by the

bad effects of the mining activities. Though not all of these mining firms are considered illegal,
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most of them violate the safety and environmental protections stated in the Philippine Mining

Law of 1995. (Gascon, 2) In line with this, Gov. Cuaresma wants her constituents to be more

responsible and concern with regards to their community. Kasibu Mayor Romeo Tayaban and

Vice Mayor Romeo Aliguyon have opposed the Climax Arimco Mining Corporation (CAMC)

Gold-Copper Project in the town for the people are threatened by the physical and economical

displacement and dislocation, environmental degradation, threats of pollution and diseases, and

loss of security. Addition to this, that time DENR Secretary, Lito Atienza, ordered an

investigation on the failure of mining firms to get consent from the local communities in the

province. And as a result these mining firms are subjected to withdrawal of their mining permits.

(Padua, 3)

As a conclusion, most of the issues concerning the illegal gold mining in the Philippines

are being noticed by the government by the time there were already excavations and the people

were already threatened by the dangers brought out by the illegal acts of these firms. There were

only very little efforts from the government to eliminate the illegal miners. There are no

evidences that can prove that the government created such special task forces or passed special

laws against illegal gold mining in the country. The only responsible act that I found out is the

move of the Nueva Vizcaya Governor Luisa Cuaresma wherein she managed to make her people

be the protector of their own province and own rights. Also I commend Secretary Lito Atienza to

his extended efforts to regulate illegal mining activities at least in Nueva Vizcaya.
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References:

1
Gabieta, Joey. ‘Illegal’ Gold Mining in Leyte, Samar Probed. Inquirer News, 16 Jan.

2012. < http://newsinfo.inquirer.net/128641/%E2%80%98illegal%E2%80%99-gold-mining-in-

leyte-samar-probed>.

2
Gascon, Melvin. “Vizcaya gov says let people decide on mining.” Philippine Daily

Inquirer 3 August 2005: 16. Print.

3
Padua, Reinir. “DENR Orders Probe of Mining Firms’ Failure to Get Consent of Local

Communities.” Malaya Business Insight 26 October 2007: A2. Print.

4
Panaligan, Rey and Dexter See. “SC to Decide on Diwalwal Mining Issue.” Manila

Bulletin 8 April 2008: 8. Print.

5
Definition:Mining. McGraw-Hill Science and Technology Encyclopedia

6
Gold Price Network TM. < http://goldpricenetwork.com/goldprice/philippines/>

7
Historical Sketch of Mining Industry. < http://www.prrm.org/publications/gmo2/

historical.htm >

8
“Old small-scale mining area closed down.” Manila Bulletin 9 July 2004: I4. Print.

9
Presidential Decree No. 1899 “Small-Scale Mining Law”. < http://www.chanrobles.com

/presidentialdecreeno1899.htm# .UPyi_R04u4w>

10
Republic Act No. 7942 “Philippine Mining Law of 1995”. <

http://www.chanrobles.com/RA7942.htm# .UPyi_x04u4w>

11
Violence Rules Illegal Gold Mining. Malaya Business Insight, 11 Sept. 2012 <

http://www.malaya.com.ph/index.php/news/nation/12750-violence-rules-illegal-gold-mining>