Cap on small-scale mining plants may backfire, global group warns

MANILA, Philippines — A global non-profit group has warned that a proposed P200-million capital cost cap on mineral processing plants for small-scale miners could create unintended risks over time.

Speaking during a public consultation conducted by the Mines and Geosciences Bureau (MGB) last week, John Joe Gayao of the Artisanal Gold Council questioned the use of a fixed peso amount as the sole qualifying criterion for small-scale processing facilities.

“The cap on capital cost is likely to become obsolete quickly due to inflation, cost escalation, regional cost differences and access constraints for remote communities,” Gayao said.

He warned that the proposal could push some small-scale mining contractors to underinvest in environmental and safety infrastructure in order to stay below the P200-million threshold, particularly since mine tailings storage facilities are already included in the cap.

Under the draft rules, small-scale processing plants would also be limited to extracting no more than 50,000 metric tons of ore annually.

Gayao said it would be more coherent to align capital cost benchmarks with production capacity or legally permitted processing volumes, instead of relying solely on a peso-based limit.

As an alternative, he suggested keeping the cap but adjusting it periodically to reflect inflation, while carving out environmental and safety-related investments so these are not discouraged by regulation.

The government is currently amending its guidelines for small-scale mining, aiming to tighten regulation and ensure more responsible operations.

The revisions focus on updating the implementing rules of Republic Act 7076, also known as the People’s Small-Scale Mining Act of 1991.

The Department of Environment and Natural Resources (DENR) said the amendments seek to balance the growth of small-scale mining with safeguards for worker safety, environmental protection and community welfare.