Mining industry seeks way to draw small-scale miner into mainstream

MANILA, Philippines – Mining stakeholders are exploring ways to draw small-scale miners into the mainstream.

On the sidelines of the 62nd Annual National Mine Safety and Environment Conference (ANMSEC) in Baguio City, miners and industry experts said small miners have gone underground to avoid paying taxes.

Experts are encouraging small miners and government to adopt a rice mill concept of selling their produce.

Dr. Carlo A. Arcilla, director of the National Institute of Geological Sciences at the University of the Philippines, said small miners account for nearly 80 percent of gold sold, with the rest produced by the major mining companies.

He said the small miners have resorted to illegal ways of selling their gold to the international market.

All gold unearthed must be sold to the Bangko Sentral ng Pilipinas (BSP) and in the process pay the necessary taxes. That discourages the small miners who have tapped ‘private buyers’ who, in turn, sell the gold in the mainland China.

In 2014, gold purchases fell to $4 million from $25 million a year earlier.

Arcilla said it also results in losses worth millions of pesos in government tax revenues.

Meanwhile, he is also strongly recommending setting up a purchasing system not only to acquire the gold from small miners. “We could also help them process and improve their system to increase their income and efficiency.”

Louie Sarmiento, president of the Philippine Mine Safety and Environment Association, said miners are ready to share their expertise for inclusive growth.

“Let us share the benefits of responsible mining with the bigger community outside of our operating areas by improving the lives of our stakeholders and sharing our knowledge and skills to enrich others,” Sarmiento said.

“This year, let us heed the call of our theme to be inclusive. Let us realize that by uniting our efforts to improve our impact areas with relevant development that are aligned to the country’s development agenda we can send a tangible message to the leaders of our country that we are deeply concerned with the welfare of the Philippines as a whole - that the industry is true to its potential and is worth supporting,” Sarmiento said.

On the other hand, community development programs from mining companies in the exploration phase (prior to operations) benefited a total of 232 barangays all over the country from 2011 to 2014. While operating mines benefitted a total of 573 barangays via the Social Development Management Program (SDMP) amounting to P11.5 billion as of the first semester of 2015.

In the area of occupational health and safety, all mining companies pursuant to the Philippine Mining Act of 1995 (RA7942) and its implementing rules and regulations are required to submit an annual safety and health program that includes emergency response preparedness program and creation of an emergency response team.

The mining industry expects more challenges in the coming years, including fiscal reforms.