small scale mining

A BAckground Study on the SmAll-ScAle gold mining operAtionS in Benguet And South cotABAto And their impAct

on the economy, the environment And the community By The Alternate Forum for Research in Mindanao (AFRIM)

Bantay Kita Occassional Paper Series No. 2012-02

A BAckground Study on the SmAll-ScAle gold mining operAtionS in Benguet And South cotABAto And their impAct

on the economy, the environment And the community

By The Alternate Forum for Research in Mindanao (AFRIM)

A BAckground Study on the SmAll-ScAle gold mining operAtionS in Benguet And South cotABAto And their impAct on the economy, the environment And the community

Bantay Kita Occassional Paper Series No. 2012-02

A study commissioned by

BANtAy KitA/ActiON fOr EcONOmic rEfOrmS

march, 2012

BANtAy KitA is a coalition of organizations that advocates for transparency and accountability in the extractive industries.

Office Address: Unit 1403 West trade center, 132 West Avenue, Quezon city, Philippines 1104

telefax: (+632) 426-5626Website: http://bantaykita.phEmail: [email protected]

Writer: AltErNAtE fOrUm fOr rESEArch iN miNdANAO iNc. (Afrim) Publication design and layout: r. JOrdAN P. SANtOS

Send your comments, inquiries, write-ups, and contributions to: [email protected]/[email protected]

contentS

introduction.............................................................4

BAckground................................................................7

SmAll-ScAle mining ActivitieS..............................11

economic impAct.......................................................19

locAl revenue collection........................................19

environmentAl impAct ...........................................27

SociAl impAct............................................................29

SummAry of findingS...............................................31

chAllengeS..............................................................32

concluSionS.............................................................32

referenceS................................................................34

4A BAckground Study on the SmAll-ScAle gold mining operAtionS in Benguet And South cotABAto And their impAct on the economy, the environment And the community

introductionGold is the number one mineral produced by the Philippines in value terms. Although total local production was low relative to world production, it ranked 2nd to Africa in gold production per unit land area in 1988 and ranked 29th as top gold producer in 2002(israel and Asirot 2002). in the year 20022007, the Philippines gold production increased by 8.2%. This contributed an average of 2% gross domestic product (GdP) in the same period. The country was ranked 18th in the GfmS Gold Survey list of top 20 Gold Producing countries in 2007 (teves 2008). The 2008 and 2009 data of the Philippine mining Almanac showed a significant amount of gold production by the small-scale gold mining operations in the country. reports revealed that the small-scale mining sector contributed almost 80% of the total gold production. This is equivalent to a Php32B contribution to GdP in 2007 (ibid).

The following 2008 and 2009 data are based on the amount of gold sold to the Bangko Sentral ng Pilipinas (BSP). The highest amount of gold produced in the country at 28,198 kg and 26,112 kg, respectively were generated by the small-scale mines (fig. 1).

Fig.1: gold Production on the PhiliPPines, 20082009

Source: (Philippine Mining Almanac 2010)

local governments hosting the sector acknowledged the industrys economic contribution, as it somehow provides livelihood to the local community and unemployed migrants. There are some reports on the adverse impact of small-scale mining on the environment, health and human lives. however, research studies documenting the impact of small-scale mining industry on the local economy, environment, human health, public safety and the socio-cultural condition of indigenous peoples (iPs) in the mining areas, are limited. The socio-

2003

1. Secondary producers have copper as primary product2. *Less purchases from Acupan SSM Project, Banahaw Gold Project and Diwalwal Projects

PriMAry ProDucerS VAriouS SMALL-ScALe MineS BASeD on PurchASeS of BSP*

SeconDAry ProDucerS

6,072.00

6,072.00

26,112.00

28,198.00

4,863.00 5,023.00

2009

2008

5the Alternate forum for research in mindanao (Afrim)

political dynamics between small- scale miners and other stakeholders like community and civil society organizations, regulatory bodies, the government and large-scale mining companies remains undocumented.

There were concerns regarding the implication of some regulatory policies on the small-scale mining industry as the application of such will prevent some iP communities from accessing their properties. furthermore, questions arise on the actual impact of the industry on poverty alleviation. Some theory suggests that the small-scale industry may have aggravated poverty because of the weak regulation of the industry.

it is in this light that this scoping study was carried out to provide the different stakeholders with preliminary information on the state of small-scale mining in the Philippines. This study may help the civil society, institutions, national agencies and local governments in shaping policy.

objectives oF the studyThis scoping paper aims to provide an overview of the small-scale mining operation, the stakeholders of the industry and the policy regime that governs it. it looks at small-scale minings contribution to the local economy, particularly its impact on women and children. it also tries to provide an overview on the effect of small-scale mining on the environment and the delivery of social services in the mining communities.

Methodology oF the studyThe study areas were Barangays Kematu and desawo, municipality of tboli, South cotabato, Barangay Ampucao, municipality of itogon and camp 6, municipality of tuba, Benguet. The said areas were selected due to the perceived variation on the mode of tunneling and gold extraction which are old and traditional (represented by Benguet) and new and modernized (represented by South cotabato). Accessibility and safety/security of the research areas were also considered.

This research study involves a review of existing literature on small-scale mining and the industry. Official documents gathered include socio-economic profiles, environment code, executive orders, resolutions, ordinances, lists of tunnel and processors, small-scale mining tax collection reports, safety inspection and joint retrieval reports of local governments and the small-scale mining associations legal documents.

Primary and secondary data were also analyzed. Secondary data were collected from the government agencies and local government units, while primary data came from key informant interviews (Kiis), focus group discussions (fGds) and direct observations of activities in tunnels, gold processing plants and communities in the areas.

Primary and secondary data collection was conducted on October 1324, 2011 and february 1, 2012 in the municipality of tboli, South cotabato and on November 1629, 2011 in the


municipalities of tuba and itogon, Benguet. A total of twenty-seven (27) interviews were conducted in both provinces. The complete list of informants is attached in Annex A.

location oF the study

Nine focus group discussions were conducted in the two mining sites. They were conducted with the National commission on indigenous Peoples (NciP). A total of 61 individuals participated composed of municipal and barangay officials (9), officers and members of small-scale mining associations (27), church groupSocial Action committee (4), women working and involved in small-scale mining (12) and tunnel workers/ atraseros/ ball mill and processing plant workers (9). Among the informants and participants of the fGds, 29 are women (32%) and 63 (68%) are men.

Among the areas visited are the small-scale tunnels and destinos of tboli minahang Bayan multi-Purpose cooperative (tmBmPc) in Barangay Kematu and desawo integrated Small-Scale mining Association, inc. (diSSmAi) in Barangay desawo, tboli including the gold processing areaball mills and ciP plant in Barangay Edwards and Poblacion, tboli, South cotabato. in Benguet, tunnels and processing plants of camp 6 Explorers Small-Scale mining Association, inc. (cESSmAi) in camp 6, tuba and the Saddle hartwell Gold coin Goldhill community livelihood Association, inc. (ShAGGclAi) in Barangay Ampucao, itogon. Actual tunneling, processing and the communitys daily activity within the tunnel areas were observed.

liMitations oF the studyThe study faced difficulty in terms of acquiring comprehensive revenue collection information on small-scale gold mining operations in the areas. The lists of actual tunnel operators were incomplete and lGUs and regulatory bodies only have rough estimates of the number of mine workers. There was no actual survey on household income.


field works coincided with the lGUs and national agencies heightened enforcement of rules and regulations in the areas. This affected the quality of information collected from Kiis and fGds as there were doubts on the relationship of this research study and the governments enforcement activities. A day after the fieldwork in tboli, 300 tunnels were closed in Sitio tunnel, Barangay Kematu, tboli by the Provincial mining regulatory Board (PmrB) of South cotabato. during the conduct of fieldwork in Benguet, a cease-and-desist order was issued by the Provincial Government to a tunnel in Barangay Ampucao, itogon.

in assessing the immediate environmental, safety and health impact of the small-scale mining activities in the areas, the study relied primarily on available literature, inspection and joint retrieval reports from the offices of the provincial and municipal environment and natural resources. Online references were also used to inform the study.

BAckgroundSmall-scale mining (SSm) refers to mining by individuals, groups, families or cooperatives with minimal or no mechanization, often in the informal (illegal) sector of the market. Small-scale mining relies heavily on manual labor and does not use explosives. The scope of the area allowed for small-scale mining should not exceed 20 hectares per contractor (1991). in the Philippines, small-scale mining operators include subsistence mining (estimated 75%), individual or family businesses (estimated 15%) and established commercial mining firms (estimated 10%) (hentschel 2002). According to the different interviews and focus group discussions, the operation of small-scale gold mining in the country can be traced as early as 10th century or even since time immemorial in the north and as late as 1990s in south cotabato.

history oF sMall-scale Mining in the areas

tuBA And itogon, Benguet

The municipalities of tuba and itogon in Benguet are two municipalities that have been officially identified by historians and Spanish explorers as locations of the thick mineral belt in cordillera(Alyansa dagiti Pesante iti taeng Kordilyera 2011). traditional small-scale mining has been recorded to be present since time immemorial in the said areas. chinese and Spanish records documented the gold trade as early as 1200s, 1500s and up to 1898, with historical evidences showing the involvement of the Kankana-ey tribe in the 800-year-old small-scale mining tradition (caballero 2004).

tuba has a total land area of 44,926 hectares, 13 barangays. The municipality is generally mountainous with irregular rugged terrain and steep slopes. The municipality is near Baguio city and caters to spillover economic activities for the city. tuba is home to diverse ethno-linguistic groups such as ibaloi, ilocano, Kankana-ey, ifugao, Kalinga, Pangasinan, tagalog


and Kalanguya. The municipality hosted the large-scale mining operation of Benguet Exploration, an American company, in camp 6, tuba in the 1950s. due to mismanagement of the operations, the company filed for bankruptcy and closed in 1990. The company closed and left some unpaid wages due the mining workers. in 1995, a group of former workers of the company assumed the gold mining operation in the tunnels left by the company. camp 6 Explorers Small-Scale mining Association, inc. (cESSmAi) was eventually organized and granted a permit to operate by the Provincial lGU (local government unit) and the national agencies. Up to the present, cESSmAi operates within the 18-hectare mining area. itogon identifies itself as the land of Golden Opportunities. The municipality is one of the home-origins of traditional SSm activities and host to eight large-scale mining companies which made the Philippines one of the significant gold producing countries in the whole world. Among the large-scale mining companies operating in itogon since the early 1900s are the Benguet consolidated mining company (1903), Balatoc mining company (1925) which later became Benguet consolidated, inc. and further renamed as Benguet corporation (1980; Baguio Gold mining company, Atok Big Wedge, itogon mining company which later became itogon Suyoc mines, inc., Gold creek mining company, Goldfields company and Philex mining corporation which have been actively operating since 1950s.

currently, new large -scale mining companies have pending application to mine in the area as shown by the notice of applications posted in the municipal bulletin. Other companies were attempting to revive their patented claims within the area. two free, Prior and informed consents (fPics) are at present being facilitated by the National commission of indigenous Peoples (NciP) for mining applications in camp 4 and Ampucao, itogon (2011b).

The operation of the large-scale mining companies in itogon did not stop the continuous operations of SSm activities in the area. The local government and the large-scale mining companies acknowledged the SSm sector not only as a subsistent livelihood of the people but also an important aspect of the peoples identity, culture and tradition (2011a). however, this does not mean that the co-existence of the large and small-scale gold mining within the areas has no issues at all. While there is co-existence, issues, threats and challenges in mining abound in this gold-rich municipality.

tboli, south cotabatoThe name tboli was derived from the words tao belil which means men living on the hills. tboli was created on march 1974 by virtue of Presidential decree No. 407. The municipality is a landlocked area, characterized by a hilly and mountainous terrain and situated in the southern part of the province of South cotabato (municipality of tboli 2010).

The total land area of tboli is 91,527 hectares or 27% of the total land area of South cotabato, making it the biggest municipality of the province. The majority of the population belongs to the tboli tribe which comprised 17 out of 25 barangays while the remaining barangays are dominated by the Blaan tribe. A majority of the lands in the municipality are recognized


as ancestral lands (Ibid). The small-scale gold mining in tboli is concentrated within two barangays, namely, Kematu and desawo.

The small-scale gold mining activity in the municipality started with the discovery of gold in 1989 (others claim 1984). The first person to open a tunnel was a chinese man named mr. chang. The communities suspected about the existence and operation of the mining operation as the ore was hauled at night. The community members blocked the hauling of ores. They discovered that there was an abundance of minerals in their area. mr. changs tunnel operation stopped. The discovery of minerals led to migration of people from different areas specifically those coming from diwalwal, compostela Valley in davao del Norte. The locals, having no skills and knowledge about mining, looked for financial investors from outside. The first and the most influential iP group that engaged in small-scale mining is the family of the former mayor mai tuan and his siblings. his brother, fludi tuan established the tboli Small-Scale mining Association in 1989. The family eventually established the tribal mining company (tmc), a family corporation owned by the tuan Brothers namely, fludi tuan, mai tuan, dad tuan and yani tuan (2011j).

Unknown to the other small-scale mining operators in the area, tmc applied for a mineral Production Sharing Agreement (mPSA), which the dENr (department of Environment and Natural resources) approved. The tuan brothers sold a portion of the shares of the company to canadian and Australian investors. At present, mr. dibu tuan, incumbent municipal councilor of tboli, sits in the Board of directors of tmc. tmc operates in an 84-hectare area in Barangay Kematu, tboli. Also operating within the claimed mining area are the small-scale miners of tboli. They have an estimated total number of 1,000 tunnels with 300 abandoned tunnels due to lack of financing (2011h).

national Policy environMentPresidential decree No. 1899 Establishing Small-Scale mining as a New dimension in mineral development in 1984 and republic Act No. 7076, also known as the Peoples Small-Scale mining Act of 1991 govern the small-scale mining operations in the country. The law requires the small-scale mining operators to register their operations and secure permit and /or contract from the government, register mining workers through organization of cooperatives, comply with the required safety, health and environmental conditions, submit production reports and pay taxes, royalties and government production share as provided by the law (1984; 1991).

The table below (table. 1) presents the salient features of the two policies which co-exist at present. rA 7076 applies to declared Peoples Small-scale mining Areas (PSSmAs) or minahang Bayan while Pd No. 1899 governs small-scale mining areas which are not declared as PSSmAs (Pinoy legal Blog 2010b). The implementation and enforcement of these laws as devolved to the provincial lGU has resulted in additional revenue collection and control of illegal small-scale mining activities in some areas. however, some small-scale mining operators criticize the laws because of difficulties in complying with the requirements, i.e. written consent from the claim owner in cases when the mining area is located within the patented claim of a large-scale company.

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This is the case of small-scale mining operations in Benguet (2011f) . The applicability of two laws creates confusion among small-scale miners and the Provincial Environment and Natural resource Office (PENrO) which is responsible for implementing such laws. One example is the approval of small-scale mining sites. Under Pd No. 1899, applications of small-scale miners are processed with the director of the mines and Geo-Sciences Bureau. republic Act No. 7076 vested the approval of the applications for mining permits and mining contracts with the Provincial/city mining regulatory Board. The Provincial/city mining regulatory Board, is composed of the dENr representative, a representative from the small-scale mining sector, a representative from the big-scale mining industry and a representative from an environmental group. This body is tasked to approve small-scale mining permits and contracts (Pinoy legal Blog 2010a).

table 1: salient Features oF Pd 1899 and ra 7076Presidential Decree No. 1899 RA 7076

Co-existence of the Small-scale Mining Laws

The Governing Law on Small-Scale Mining(Note for areas not declared as Peoples Small Scale Mining area (PSSSMA) under RA No. 7076, the

pertinent rules and regulations of PD 1899 shall apply)

Implementing Rules and Regulations

The Mine Administrative Order No. MRD-41, Series of 1984, Department Administrative Order (DAO) No. 28 and MRDB Administrative Order Nos. 3 and 3A as provided in DAO No. 96-40, as amended

DA No. 34, Series of 1992

Scope of Small-scale Mining Permits and Contracts

Small-scale mining operations in areas not declared as PSSMA.

Small-scale Mining Contracts (SSMCs) pursuant to the pertinent provisions thereof.

Term of a Small-Scale Mining Permit (SSMP) or Contract

The two (2)-year term of an SSMP is renewable only once: provided that the pertinent application shall be filed prior to the expiration thereof, among other requirements. No SSMP shall be renewed unless its two (2)-year term is fully consumed. In the case of an SSMC, no renewal shall likewise be granted unless its two (2)-year term is fully consumed.

Qualification of Applicants Any Qualified Person may apply for an SSMP. For this purpose, a Qualified Person shall mean a Filipino citizen, of legal age, and with capacity to contract, or a corporation of partnership authorized to engage in mining, registered with the Securities and Exchange Commission (SEC), at least 60 percent of the capital of which is owned all times by Filipino citizens.

RA No. 7076, only a Filipino small-scale mining cooperative organized by licensed and registered small-scale miners may apply.

Maximum Annual Production

For metallic minerals, the maximum annual production under an SSMP/SSMC shall be 50,000 dry metric tons (DMT) of ore, while for non-metallic minerals, the maximum production shall be 50,000 DMT of the material itself, e.g., 50,000 DMT of limestone, 50,000 DMT of silica, or 50,000 DMT of perlite.

The maximum annual production above shall include low-grade and/or marginal ore, and/or minerals or rocks that are intended for sampling and/or metallurgical testing purposes/s.

Maximum Capital Investment

The maximum capital investment for single small-scale mining operations shall be PhP 10 million. This shall cover raw, additional and existing capital, such as processing plants, mine and hauling equipment, tools, infrastructures, capitalized exploration and development costs, support facilities and working capital.

Reliance on Manual Labor Small-scale mining operations shall be largely artisanal with heavy reliance on manual labor and without the use of explosives and/or blasting accessories. For this purpose, a single unit small-scale mining operation, in open cast or shallow underground, shall be prohibited from using sophisticated and/or heavy equipment, i.e., excavators, loaders, backhoes, dozers, drilling machines and/or related similar equipment for the extraction and/or breakage of materials, as well as hauling equipment within the mining/permit/contract area.

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Declaration of Small-Scale Mining Areas

New mining areas and/or areas covered by existing reservations not covered by valid and existing mining claims at the time of the promulgation of this Decree shall be governed by the implementing rules and regulations that shall be hereinafter promulgated.

The permit area falling under this Section, and its immediate vicinity, shall be closed to mining location and the permitee/licensee shall have the first option to locate such areas under other mining laws/decree, which shall be exercised within the period of two (2) years from the grant of the permit or license to cover an area equivalent to but not exceeding one meridional block.

The Board is hereby authorized to declare and set aside peoples small-scale mining areas in sites onshore suitable for small-scale mining, subject to review by the Secretary, immediately giving priority areas already occupied and actively mined by small-scale miners before August 1, 1987: Provided, That such areas are not considered as active mining areas: provided, further, That the minerals found therein are technically and commercially suitable for small-scale mining activities: Provided finally, That the area are not covered by existing forest rights or reservations and have not been declared as tourist or marine reserved, parks and wildlife reservations, unless their status as such is withdrawn by competent authority.

Source: (Pinoy Legal Blog 2010a)

SmAll-ScAle mining ActivitieSThere were four (4) SSm groups that were engaged during the conduct of the study: (1) the Ampucao federation of Small-Scale mining Association in Brgy. Ampucao, itogon, Benguet, (2) the camp 6 Explorers Small-Scale mining Association, inc. (cESSmAi), in camp 6, Kias, tuba, Benguet, (3) the tboli minahang Bayan multi-Purpose cooperative (tmBmPc), in Barangay Kematu, tboli, South cotabato and (4) the desawo integrated Small-Scale mining Association, inc. (diSSmAi) in Barangay desawo, tboli, South cotabato. Each SSm group presents a unique picture of an SSm operationtraditional or modern-corporate. The term traditional mining is not used in this paper to imply only old practices of mining using indigenous materials as used by the iP ancestors. The current mining practices of the communities have improved and evolved to meet the demands of the present time.

The term traditional is used in this study to refer to small mining activities usually owned by families. Operations are smaller and are usually considered pocket mines. They do not operate the whole year, especially during rainy season. Processing of minerals is not mechanized and processing plants are set up in the backyard or adjacent to the location of pocket mines. The traditional processes use manual ore crushing and sluicing and heap leaching plant in separating gold. modern Small-Scale mining cooperatives1 are registered associations with a more complex organization than the traditional SSm. They usually have their own mechanized processing plants and have a bigger number of employees compared to the traditional SSm. modern SSms have ball milling and the carbon-in-pulp (ciP) plants to process gold. modern SSms are a result of the adoption of SSm of modern technology in mining. traditional miners still exist because of lack of financing but given the opportunity, they would be willing to adopt the more modern method of mining. community refers to the mining community wherein members are involved in the operations of small-scale mining.

Presidential Decree No. 1889 allows corporations to also engage in small-scale mining.

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The general processes of ore extraction observed in the areas included in this study are quite similar. however, gold processing wherein amalgamation uses mercury was more common in South cotabato than in Benguet. The cyanidation process of gold extraction is used by the small and corporate small-scale mining associations or cooperatives in both areas.

sMall-scale gold Mining ProcessThe initial process of gold mining starts with prospecting. in prospecting, the ore quality, vein geologic formation and ore assaying are examined. An area with a good ore quality is prepared for tunneling. in tunneling, holing and drilling are done using pick and shovel. Others who can afford it use electric hammer jacks. These initial stages of prospecting and tunneling are the expertise of the abanteros, whose knowledge of gold mining has been shaped by years of experience. in Benguet, the ibaloi and Kankanaey miners are known abanteros, having inherited

1. Sharing/Remuneration

Sharing/Remuneration

None yet

Workers Abanteros 3-5Age 20s to 50s.

Process Ore Assay/Vein examination

Duration No specific duration

2. Tunneling

Sharing 55 bags/quota

Workers Abanteros 3-5Age 20s to 50s.

Process Holing and drilling manual using pick and shovel and electric hammer jack

Duration 10-20 days

Fig. 2: Process Flow oF sMall-scale Mining, tboli, south cotabato

9. Smelting/Firing

Remuneration 4,000-4,500 PhP or abover per mo. per worker

Workers with specific in-charge person/plant (adults)

Process Cooking the product mixed with other chemicals; Metal produced subjected to high temp. (blue torch) to refine gold and separate silver

Duration Less than an hour

10. Gold Weighing

Remuneration 4,000-4,500 PhP per mo.

Workers With specific in-charge person.Young/adult trusted workers (usually female) or sometimes done by the owner

Remarks: In TMBMPC, this job is an additional function of the administrative staff

Duration Less than an hour

11. Gold Trading/Selling

Value At 100 gram gold min. @ P1,000PhP selling price = 100,000 PhP

Workers Owner/Financier

Remarks: Sold to buyers in Tagum City

Duration Weekly basis 100g and above gold

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their skills from their ancestors. Some migrant miners from the lowlands have also learned the skill. in South cotabato, the abanteros came from diwalwal, monkayo, compostela Valley.

mine workers are hired to work on the tunnels. These are the ore and muck ore packers, atraseros (ore exporters from inside the tunnel), ore washers (usually women), habal-habal drivers, horses and horse owners/guides as transporters of ores from the tunnel site to the processing area. Extracted ores are processed in the ball or rod mill plant for mercury amalgamation. The tailings that have accumulated for several weeks will be subjected to further cyanidation in the carbon-in-Pulp (ciP) Plant. The mercury amalgamation process will recover 40% of gold from the ores while the cyanidation will recover up to 60% of gold, both refined right after the smelting and/or firing process. Gold produced in button shapes will be sold to licensed gold buyers in tagum. A detailed process flow is presented in the following diagram (fig.2).

3. Oral Extraction

Remuneration 10 PhP/puyong(1 Puyong=5-6 bags)

Workers Abanteros Age - 13-50s or older as one can handle the job

Process Pick and shovel

Duration Daily basis (per quota)180 bags/quota2-5 days minimum duration per quota

4. Ore Hauling

Remuneration 60Php per puyong

Workers Atraseros Age - 13-50s or older

Process Sacking of ores and muck wastes

Duration Daily, depends on the distance of tunnel from the ore depository site

Nearest 50 meters or lessFarthest 1 km or more

5. Ore Hauling

Remuneration 60Php per puyong

Workers Women/young workers(no age limit)

Process Manual washing with free flowing waterDrums and basins used

Duration 1-2 hrs. or more depends on the volume of ore; usually 3x/wk

6. Ore Transport

Remuneration 30Php/puyong (motorcycle)50Php/puyong (horse)

Workers Habal-habal drivers, Horse owners/guides(no age limit)

Process By horse/motorcycles

Duration 1-2 hrs. or more depends on the volume of ore; usually 3x/wk

7. Ball/Rod Milling

Remuneration 4,000-4,500 PhP/mo. per worker

Workers Plant workersYoung people/adults - 16-30s

Process Amalgamation using mercury

Duration 3 hrs./loadLess than 1 hr. amalgamationRecovered gold is subjected to firing immediately; 10-30 mins. Depending on the volume of gold.

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traditional Practices in sMall-scale Miningin Benguet, the traditional manual process of physical separation of gold particles from the crushed ore has been continually practiced by the small-scale mining operators in the area. This is the initial zero-chemical process recovering 60% of gold prior to the modern heap-leaching process that further subjects the tailings from the sluicing process into a cyanide solution. in this process, 90% gold recovery can be achieved. mercury, which has been traditionally used in many small-scale mining to help the gold sink through the flowing water-gravel mixture, is unpopular in the small-scale mining operations in Benguet.

A unique traditional way of ore sharing is still practiced in Benguet. The monetary profit from a single mining operation is equally shared by the mine workers. Another sharing tradition that is still practiced in Benguet is the sagaok. This is a mode of sharing by tunnel owners and miners whenever a high grade ore is found. All the members of the community get a share of the mine. Elders, women and their children are prioritized. Other miners and mine workers may work inside the mine for a given amount of time to get their share.

Power relations in the sectorThe major key players and relations dynamics are similar in the areas visited for this study. however, for the purpose of providing an overview, the case of tboli, South cotabato is presented (See fig. 3 below).

The mine is viewed as a resource, with various interested key players aiming to access it and benefit from it. There are several key players in the small-scale mining industry. With respect to the mining operation, the key players include:

land owners

tunnel owners (individuals or cooperative and association)

financiers (foreigners, migrants or local, IPs and non-IPs)

the abanteros or skilled miners the mine workers which include the atraseros (ore packers and haulers) ore and sack washers (usually women and young workers)

ore transporters (habal-habal drivers, horse owners or guides) processing plant workers

gold traders

On the trading side, gold produced by the small-mining operations in South cotabato are purchased by the licensed gold buyers based in tagum, davao del Norte and subsequently sold to the Bangko Sental ng Pilipinas (BSP). Non-licensed traders are also present in the areas and are commonly labeled as the black market. Black market traders would usually visit the community or are based in the community. Purchase price is lower in the black market but the miners save the cost of transportation in going to tagum city. Sometimes, the owners of processing plants are part of the black market. Because of the savings in transportation, miners are encouraged to sell their gold to the black market.

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in Benguet, anyone who has money can offer to buy gold at a lower price. however, communities are realizing their loss in black market trading. thus they are trying to find ways on how to set up legitimate gold trading in the barangay as in the case of Barangay Ampucao, in itogon, Benguet.

regulation and enforcement of policies related to small-scale mining industry are under the Provincial mining regulatory Board (PmrB). This is composed of the dENr- mines and Geo-Sciences Bureau (mBG) as the chairman and the Provincial Governor as the vice-chairman. The other members of the board are representatives from the SSm Association, large-Scale mining Operators and non-government organizations (NGOs). in Benguet and South cotabato, a number of local officials are involved in mining either as tunnel owner, land owner or financier. This presents a conflict of interest between regulating small-scale mining and operating mines.

in tboli, local regulations are in place to minimize the negative effect of small-scale mining on the environment. tax collection was also intensified. The communities in the mining areas are open to the current efforts of the provincial government to strictly enforce these regulations.

in Benguet, the SSm operators have mixed opinions regarding the increasing efforts of the PlGU to regulate SSm operations and enforce applicable laws. currently, there are two provincial federations of SSm groups or associations: the (1) Benguet federation of Small-Scale miners (BfSSm) and the (2) Benguet Small- Scale mining Associations (BSSmA). BfSSm is more receptive to regulation as such would legalize and protect the SSm operations, while BSSmA is not totally against the regulation but they have concerns that they want the government to address in relation to its efforts to regulate. Some of the points that BSSmA are advocating (points a and b) and are also apprehensive about (point c) are (2011e):

a. The clear definition of small-scale mining vis--vis the current existence of highly mechanized small-scale mining and processing;

b. The push for a clean gold advocacy, there is no clear regulation by national agencies as to the selling and use of chemicals like cyanide. Not all SSm operations are using cyanide; and,

c. regulation and permitting would mean eradication of the traditional practices like ore-sharing with elders, women and children as mine safety provisions would not allow non-workers (esp. children) to stay in the mining area.2

2 The SSM operators in Itogon and Kias, Benguet (both traditional and corporate-type or those that are advanced in terms of technology used and operations) still practice traditional ore sharing with the community, locally called sagaok. Participation of women and young people (or children) especially in traditional and smaller-type operations is also common. The SSM operators (usually the small operators) are apprehensive that the strict regulation and law enforcement may affect some of their traditional practices in SSM.

16


Other issues raised by the communities regarding the enforcement of regulations are the following:

1. inconsistency in the system of regulation and enforcement does not address the problems of illegal SSm operations; lax or selective issuance of cease-and-desist to SSm operators in the area is seen as inconsistency of enforcement.

2. Existing regulatory policies, along with the requirements to seek consent to mine in areas covered by large scale patented claims raised negative reactions from traditional SSm operated by iP communities;

3. The existing policies on regulation and enforcement threaten the traditional way of small-scale mining and managing of resources in the iP community;

4. The regulation efforts of the government are perceived to be anti-SSm operations and pro-large scale mining operations;

5. The current regulation efforts encourage iP communities to assert their rights over land and resources.

Fig. 3: ssM Key Players diagraM

BLACK MARKET

GOLD & SilVeR

LICENSED GOLD BuyERS(Tagum)

BANGKO CENTRAL NG PILIPINAS

TRANSPORTERS(Habal drivers, Horses,

Horse Owners)

ORE WASHERS(Women, young Workers)

ATRASEROS(Laborers, Packers)

FiNANCieRS(Foreign or Filipino)

LARGE SCALE MINING COMPANy

GOLD MINE

TuNNEL OWNERSlocal / Migrant Financiers,

SSM Cooperative, SSM Association

MinE W

ORkERS

ABANTEROS(Skilled Miners, Migrants)

LAND OWNERSiPs Clan / Families / Political leaders

GOLD PROCESSORS(Ball Mills, CIP Plant Owners -

migrant, foreign)PLANT WORKERS

(Laborers, young and Adults)

PMRB /PlGU / MlGU / BlGU

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The abanteros are usually the ones with knowledge, skill and capability to engage financiers because of their prospecting and tunneling skills. financiers initially provide funds for the operation of the mine but they are expected to engage with venture capitalists to expand the operation in the site. Venture capitalists can be foreign investors or locals who have the capital to infuse into the industry. land owners, on the other hand, have the priority access over the resource, being the rightful claimants of the area. however, the land owners usually do not have the skills and the financial capacity to start a mine. Abanteros and financiers can negotiate with land owners to tap the resource.

in some cases, the land owners can be financiers and tunnel owners, too. Some abanteros who have been successful in mining now act as financiers and tunnel owners, some have even managed to operate processing plants. it is common to see big-time tunnel owners and financiers also operate the processing plants in the area. Normally, all plant owners have tunnels but not all tunnel owners have processing plants. Owners of small mining operations with no processing plants pay for the use of existing processing plants, depending on the number of bags processed.

There are instances when the small land owners would form an association. The officers of the association will be responsible in finding the financiers and operating the tunnels. The association secures a collective legal permitthey need only one permit for all the tunnels if they are organized as an association. The association or individual landowners receive royalty shares from the mine.

in tboli, the discovery of gold in the area brought about conflicts on the legal ownership of land between iP clans (Afrim 2011d). The community elites are the tribal leaders, clan members, barangay and municipal officials, who are usually better educated than the other members of the community and have established social linkage in the community. With the capacity and access to resources, these elite were able to legitimize their claim over the land despite the objection of the original inhabitants of the area. 3These community elites or clan members now receive the royalties from mine operators. to address this issue, the local government would facilitate the resolution of conflicts between clans.4 They would arrange some agreement on the sharing of royalties between clans that are claiming ownership of the land. however, large-scale mining would tend to deal with just one clan, usually the more influential one, and this aggravates conflict in the community. The tuan family in tboli was the first to establish the mining cooperative and claim ownership to the land. One of the members of the clan is a municipal councilor.

The ore sharing scheme practiced in the small-scale mining operations in tboli, South cotabato is similar to the other SSm operations in compostela Valley. The ore sharing scheme is reflected below.

3 There are existing clan conflicts between actual claimants and legal claimants in the area. legal claimants are the prominent families who have worked out the legal titling of the area, allegedly without prior information given to the actual claimants.4 Based on the Kiis and FGDs conducted, it is the municipal local government with the technical assistance from the provincial government who facilitated resolution of conflict as to the ore sharing scheme between iP clans.

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ab

c

deF

g

h

ij

K

l

M

n

A. Land OwnerB. Permitee (TMBMPC)C. Abanteros (Miners) - usually 4- 5 persons;

Miners are Cebuanos, IPs, Ilonggos and even from Ifugao

D. Expenses (Timber, Sacks, GenSet use)E. Maguan Clan (as Royalty Share)F. Ancestral Domain Tribal ChieftainG. Tuan Family (Tribal Share)H. Portal GuardI. InspectorJ. ElectricianK. Main LinerL. Operations ManagerM. Corporate Share (for the group of miners

who started the tunnel)

Fig. 4: tMbMPc ore sharing scheMe

Source: Tboli Minahang Bayan Multi-Purpose Cooperative, Tboli, South Cotabato

Unlike in Benguet wherein miners and financiers share the net income of mining, the tBoli mines in South cotabato divide their income based on fixed ore share instead of the net proceeds of the activity. figure 5 shows the sharing scheme. Abanteros usually determine the sharing scheme in these operations. for every 180 bags of ores, 55 bags (30.5%) goes to the abanteros, followed by the operations expenses of 30 bags (17%) which goes to the financier, and another 30 bags (17%) for the management share of the association or cooperative. The lowest share of 4 bags (2%) is the royalty share of the maguan clan and the ancestral domain tribal chieftain. in other smaller tunnel operations, ores are divided for every 165 bags. A royalty share of 10 bags is given to surface claimant (land owner), another 10 bags are given to the tribal chieftain as the royalty share. The remaining 145 bags are shared between the abanteros with 58 bags (40%) and the owner and/or financier with 87 bags (60%) (2011c).

The quality of ore a person gets as a share of the mining activity depends on their actual involvement in the operation. The ores are not randomly distributed. landowners would most likely get low grade ores as their share. Because they are not part of the actual operation, no one looks after their interest.

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in Barangay Ampucao, itogon, Benguet, the small-scale miners associations find it difficult to acquire necessary mining permits due to the requirement of getting consent from Philex mining company, which is the mining claim-holder of the area. About 70 80% of the entire barangay area is covered by the mining claim of the large-scale company. The small-scale mining operations in Barangay Ampucao continue to operate without legal permits. The legality of small-scale mining operations and iP claims in the large scale mining area is a perennial issue in Benguet.

There are cases where the small-scale mining association was able to engage large- scale mining companies in Benguet. The Acupan contract mining Project, a small-scale mining group, partnered with Benguet corporation, a large-scale mining company, in terms of mineral extraction. The company allows the small-scale mining operations within its area, provides technical assistance, allows utilization of the processing plant and buys the production output, while the small-scale mining groups finance and conduct the operations. This arrangement/partnership benefits both parties.

in tboli, South cotabato, a conflict arose between the small mining operators in the minahang Bayan and the entry of the tribal mining corporation (tmc) in the same mining area. At present the small-scale mining cooperative, tmBmPc, continues to operate in the 21-hectare designated area for minahang Bayan along with the on-going exploration activities of tmc in its 84 -hectare claim which includes the minahang Bayan. The overlap in mining claims resulted in legal battles between small -scale miners and tmc.

economic impAct5local revenue collection6

South cotabato has Provincial Ordinance No. 7 as enacted by a resolution in 2003 that imposes taxes on small-scale mining, mineral processing operations and transport of ores in the province (South cotabato Provincial council 2003). Benguet, on the other hand, is deliberating on the proposed mining code for small-scale mining operations, which will impose tax on the industry.6

south cotabato Below is the schedule of fees the small-scale mining operators need to pay to operate mine tunnels in South cotabato:

5 Please note that the data presented in this section are based on the information provided by the LGus. 6 Proposed Benguet Small-scale mining Code due for 2nd reading as of November 28, 2011. An Ordinance Governing the Issuance of Permits for the Taking, Removal and Disposition of Minerals to Include Ordinary Earth, Gravel, Sand, Guano, Gemstone, Pebbles, Boulders, Other Loose and unconsolidated Materials and Other Quarry Resources from Public and Private Lands within the Territorial Jurisdiction of the Province of Benguet; imposing Tax on the extracted Materials and Providing Penalties for the Violation of Certain Provisions Thereof

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table 2: list oF aPPlication and other Fees oF sMall-scale Mining oPerations, south cotabato

Permitting Agency/lGU Type of Fee Amount (in PhP) Remarks

DENR Environmental Management Bureau (EMB)

1. Environmental Clearance Certificate (eCC)

4,000.00 For gold processing plant Ball Mill and CIP Plant

2. Violation Fee 50,000.00 Per violation of the ECC conditions

Provincial LGu 1. Small-Scale Mining Permit 6,600.00 Per contract, renewable every 2 years

2. Delivery Receipt (DR) 1,000.00 per Ton (T), with an allowable limit of 50,000T / yr.

3. Ore Transport Permit (OTP) Application

6,500.00 For the 1st application, renewable every after 15 days

4. OTP Renewal (every 15 days) 500.00

Municipal LGu 1. Annual Business Tax (Mayors Permit)

200.00 For less than P500K annual income.

400.00 500.00 For less than P500K 2M annual income.

2,500.00 3,000.00 For more than P2M annual income.

2. Zoning Clearance 1,300.00 Annual

3. Realty Certificate / Assessors Fee 44.00 Annual

4. Occupation Fee 50.00 100.00 Per mine worker per tunnel

5. Sanitary inspection Fee 100.00 Annual

6. Police Clearance 22.00 Annual

7. Garbage Fee 200.00 Annual

8. Secretarys Fee 20.00 Annual

Barangay LGu

1. Barangay Clearance 1,000.00 Per Tunnel Operator, Annual

2. Transport Fee 5.00 Per DayFor habal-habal ore transporters.

Source: EMB RXII and Provincial LGU of South Cotabato, Tboli LGU and Barangay Kematu LGU.

The fees collected by the dENrEmB (Environmental management Bureau) goes to the National treasury. The provincial and municipal governments each receive 30% of the mineral tax, while the barangay government receives 40% share. The share from mining tax goes directly to the General fund. The disbursement of mineral tax collected by the PlGU to the other local government units is done monthly (Afrim 2011i; 2012b).

The issuance of permits for tunnel operations in South cotabato was not strictly enforced by the PlGU and the Provincial mining regulatory Board (PmrB) until the last quarter of 2011. Prior to 2011, permits were facilitated by associations representing iP clans and non-iP cooperatives that are operating in the area. Each association only needs to apply for one permit for all the tunnels of the members of the association. The association has facilitated the processing of documents for all the members. This made the process of application easier. They have also consolidated the clans who are operating in the area. in the last quarter of 2011, the PmrB demanded that each tunnel owner apply for a separate permit, disregarding the shared permit of associations. About 300 tunnels where closed due to the absence of permit to operate. The

21


changes in the local regulation of SSm invited criticisms from the tunnel operators and SSm association officials. The cost of securing permits to operate has caused some tunnel operators to temporarily cease their operation (2012c). According to tunnel operators, the new way of implementing the issuance of permit threatened the associations. There is no incentive for members to affiliate with the association, except for the easy approval of permits due to the facilitation by an iP group whose members are landowners/ claimants of the mining area. Prior to the new regulation, the mining association in South cotabato required tunnel owners to pay PhP70.00/puyong as the toll gate fee for the Ore transport Permit (PhP30.00) which is provided by the association and for the associations management share (PhP40.00).

in response to this, a Joint Barangay and diSSmAi (desawo integrated Small-Scale mining Association, inc.) resolution will be forwarded to the PmrB objecting to the individual tunnel permit requirement of the province. There were also some objections from the mining operators when the mineral tax that was first imposed in 2004 was increased from 10 centavos/kg to 1 peso/kg last July 2011 (2011d).

for 10 years prior to the strict enforcement of the regulation, the PlGU had only collected PhP2.2m from the small-scale gold mining operations in the province (2011k). The 20082011 data from the province show a steady increase in the amount of tax collected from sand and gravel, mining tax, processing, miscellaneous and other fees (fig. 5). The strict implementation of the law in the last quarter of 2011 resulted in an increase of tax collection by 48.70% (Ibid). Although the contribution of sand and gravel and mining tax collection to the gross income of South cotabato has remained at 1%, the PlGU aims to collect PhP30m from small-scale gold mining operations in the province for 2012, around 440% more than the average collection of previous years prior to strict enforcement of the law.

Fig 5: Provincial tax collection FroM sand and gravel and sMall-scale Mining oPeration (2008 2011)

Source: PEMO, South Cotabato, Monthly SAG and Mining Tax Collection Report submitted to the Office of

the Provinciall Governor, 2008-2011

Of the total collections made for 2011, the PlGU is entitled to get a 30% share from the sand and gravel and small-scale mining taxes. This is equivalent to PhP 2.1m. Of this amount, PhP 1.7 m (77.55%) is from sand and gravel and PhP 491t (22.45%) is from small-scale mining.7

7 Note that the sand and gravel collection here is from the entire province of South Cotabato while the small-scale mining operations are concentrated only in one municipality, which is Tboli.

2009(reported as of 19, January 2009)

4,935,479.45 5,067,394.606,559,854.13

9,754,648.25




22


Fig 6: Provincial share on sag and ssM, 2011

491,040.00

South Cotabato ProvinCial Share on Sand and Gravel and MininG tax, 2011 (30%)

1,695,742.51

SAnD AnD GrAVeL

MininG TAx



The sharing of the lGUs on mining tax collected from small-scale mining is shown below (fig. 7) wherein both the province and the municipality got the same share of 30% each, while a bigger chunk of 40% goes to the barangay. The said share becomes an additional source of income for the barangay, augmenting its internal revenue Allotment (irA). mining has become the major source of income for most of the households in the barangay. The iP communities in tBoli have lost their interest in agriculture, primarily because it requires more capitalization to farm than to work as a laborer in the mining area.

Fig. 7: lgus share on Mining tax, 2011

CoMPariSon of the ProvinCial, MuniCiPal, and baranGay ShareS in South Cotabato, 2011 - MininG tax

ProVinciAL ShAre 30%

MuniciPAL ShAre 30%654, 720.00 491,040.00

491,040.00

BArAnGAy ShAre 40%



At the municipal level, the revenues collected from permits and other fees of small-scale mining for the period of 6 years (2005-2011) is about 10% of the total fees, licenses and permits collected by the municipality of tboli. Business permits collected from the agriculture sector (large monocrop plantations, SUmifrU and dole Philippines) contributed a total of 18%. The highest contribution (71%) is collected from various other sources which include taxes from other businesses, fees on services, registrations, certification, fines and penalties and others which are collective less comprehensive (fig. 8). Agriculture exceeds SSm in terms of revenue contribution.

23


Fig 8: MuniciPal collection on ssM, sag, agriculture, tboli, south cotabato jan. 2005 oct. 2011

Source: Municipal Treasurers Office, Summary of Collections 2005-2011, LGU Tboli, South Cotabato,

October 2011

it was highlighted in the municipal Profile 2010 of tboli that the lGUs total revenue increased by PhP1.8m annually due to the 30% municipal share from the provincial collection of mining and occupational taxes and local mining permits and licenses secured by the small-scale mining operators and other related businesses that flourished in the municipality.

benguetBy law, small-scale mining in Benguet is required to apply for a permit to mine. But because of the historical nature of the industry in the communities, it has been difficult for lGUs to strictly implement this requirement. currently, the small mining operators are just voluntarily registering with the lGU. What further discourages small mining operators to acquire the permit is the requirement to get the consent of the land owner or the claimant of the land to mine the site. in the case of Benguet, all the small-scale mining areas are within the mining claims of the large-scale mining firm such as Philex mining corporation. Because of the lack of permit, the small-scale mining operations in Benguet are illegal. however, the large-scale mining firm tolerates the operation of the small-scale miners.

Because of the absence of a local ordinance which specifically levies taxes and other application fees on small-scale mining operations in the province of Benguet, the revenue collected from the registered small-scale mining operations amounted only to an annual average of PhP9,029.00 from 2005 to 2010 (fig. 10). The province only collected PhP 300.00 for 2005. The total collection in 2010 amounting to PhP 22, 114.00 represents the highest collection for this period. This is a 173% increase from the previous years collection. despite the increase, this is very small relative to the provinces total collection on tax and fees of about PhP 74m for 2010. The same is true for previous years.

The very low revenue collection is attributed to the fact that small-scale mining is a traditional livelihood in the province.8 There are 69 small-scale mining associations in the Benguet Environment and Natural resources Official list; eight (8) are registered in the PlGU (listed 8 Series of Kiis and FGDs, Benguet Province, November 2011.

SSM, SaG, aGriCulture and other ColleCtionS Jan. 2005 - 17 oCt. 2011 MuniCiPality of tboli, South Cotabato

AGricuLTure

SSM-reLATeD feeS654, 720.00

SAG ShAre

9.056.807 (18%)

36, 824,465 (71%)

5,056,426.58 (10%)

678, 598.53 (1%)

oTher SourceS

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in Provincial treasurers Office database) and only five (5) have payment records in the treasury Office for application, and hauling fees.

Fig. 9: revenue collection, ssM oPerations, benguet 20052010

Source: Municipal Treasurers Office, Revenue Collections from SSM, 2005-2010, Province of Benguet,

November 2011

The municipality of tuba collected a total amount of PhP63, 200.00 (20062011) while the municipality of itogon collected PhP19, 177.08 (20072011) from corporate cedula and/or declared tax, mayors permit, business permit and other fees of registered small-scale mining operations in their areas. (figs. 10). for tuba, collections increased for 2010 and 2011. The municipality of itogon did not have any SSm revenue collection in 2009010 according to the municipal treasurers Office (mtO) report on SSm. The 2011 revenue collection of itogon is PhP16, 317.08 (as of November 2011) which is relatively lower compared to tboli.

Figs. 10: revenue collection, ssM oPerations, tuba and itogon 2006 - 2011

2010200920082007

6,255.00

300

6,710.00

10,708.00

8,092.90

22,114.00

revenue ColleCtion froM reGiStered SMall-SCale MininG oPerationS, benGuet 2005 2010

25,000

20,000

15,000

10,000

5,000

020062005

revenue ColleCtion in SMall-SCale MininG in tuba, benGuet (2006 2011)

201120082006

500

25,500.00

35,200.00

2007

500 5001,000

18,000.00

16,000.00

14,000.00

12,000.00

10,000.00

8,000.00

6,000.00

4,000.00

2,000.00

0.002007 2008 2011

aMount of buSineSS PerMit fee Paid by aSSoCiationS/firMS(With buSineSS related to SMall-SCale MininG)

to MlGu itoGon, benGuet, 2007-2011

20102009

Source: Municipal Treasurers Office, Revenue Collection from SSM, 2006-2011, Tuba, Benguet, November 2011

Source: Municipal Treasurers Office, Revenue Collection from SSM, 2007-2011, Itogon, Benguet, November 2011Note: No MTO data recorded from Year 2009 and 2010

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comparing the 2009 revenues of tuba from large-scale mining and small-scale mining operations, it is apparent that the lGU is getting more income from realty taxes (PhP 4.6m) and the occupational, rental and other fees (PhP 300t) paid by the large-scale mining company. The same is true in the case of itogon, which collects about PhP 7m for realty tax and PhP 380t for occupational, rental and registration fees of mining claims.

eMPloyMentin Barangay Kematu, tboli, South cotabato, about 85% of the mine workers are in the small-scale mining operations. The remaining 15% are employed by the large-scale mining operation (tribal mining company) which is currently at the exploration stage. There are an estimated 5,000 mine workers in Barangay Kematu of which 75% are locals while the remaining 25% are migrants from davao Provinces, General Santos and neighboring municipalities. There are also some who came all the way from the provinces of Benguet and mt. Province.

lot owners are able to generate additional income by collecting toll fees for the use of private-owned gates and bridges. toll fees for motorcycles are P5.00 and an additional fee of P2.00/bag of ore is collected for traversing private bridges. The barangay does not regulate the collection of these fees but it collects a terminal fee of PhP 5.00/day from motorcycles transporting ores from the tunnels.

The small-scale mining operations in the areas do not have the actual inventory of people working the small-scale mining industry. The following data are estimates on employment opportunities for local and migrant workers by the local government. in Barangay Ampucao, itogon, Benguet (table 3), of the total 1,679 households, about 1,007 households (60%) are into small-scale mining operations. The families are operating tunnels in the areas, with both parents and adult children helping in the mine operations. men who are unable to find jobs and out-of-school youths are also able to find jobs in the small mining activities in the area.

The local government also estimated Philex mining corporation, the large scale mining operating in the area, to employ less than a hundred local people from the barangay. This includes contractual and/or non-regular positions in the company.

table 3: PoPulation, household nuMber and eMPloyMent contribution oF sMall and large scale Mining, KeMatu, tboli, south cotabato and aMPucao itogon, benguet, 2011

Locality Total Population

Total No. of HHs.

Small-scale mining Employment Large Scale Mining Employment**

Brgy. Ampucao, Itogon, Benguet

10,076 1,679 60% of HHs are engaged into SSM less than 1% of Brgy. Ampucao residents

Brgy. Kematu, Tboli, So. Cot.

6,825 1,365 85% (75% of which are locals, 25% migrants*)

15%

* From Davao Provinces, Gen. Santos and neighboring municipalities, Benguet, Mt. Province

Source: LGU Data and KIIs in both areas, Oct.-Nov. 2011.

** Large-Scale Mining Companies: Philex Mining Company (Benguet) ; Tribal Mining Company (So. Cot.)

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woMen Women play an important role in traditional small-scale mining. The women working in mining sites are usually the mother, wife, daughter or kinswomen of the mangusok or mine workers. The women of itogon have been trained in the special skill of gold processing. Among the roles of women in gold processing are:Pag-u-usal This is the process of skillfully selecting gold ores.Pagba-bagon from the term bagon or an improvised wagon or cart used in transporting muck ores (waste) from inside the tunnel to outside. Women assist in this process.Pagpa-pala ng waste This is the manual shoveling of muck ores outside the tunnel.Man-gaid The manual pulverizing of ores prior to feeding of ore in the ball mill.Mag-alinteg The grinding of mineral ore using a pair of stones.Mandayas The skillful separation of gold dust from the gold tails.

in Benguet tradition, the older women who cannot work still receive a share in the proceeds of mining during pannakisaga-ok and makilinang, the sharing of ores with the members of the community.

it was estimated that the women members of the SSm federation in itogon could reach almost 3,000 compared to the 7,000 men. According to the women, the SSm activity in the community helps in providing additional income for families. The ore shares of women are considered their own income from the activity. There is no exact estimate on the womens amount of earnings, as their share varies with the ore quality. The women used their income as additional support to household expenses in addition to their husbands income. The women said that their participation in small-scale mining is an additional workload to them. furthermore, the jobs available demand a lot of time and strength. But the women are still thankful for the opportunity as it helps in their financial needs.

in Kematu, women can be found outside the tunnels washing gold ores. These women are tbolis and wives of mine workers of tmBmPc who worked as ore washers three days a week. Work in mines serve as additional source of income for the family which the women can do when they are done with house chores. The age range of the women workers is 2942. most of their children are grown-ups already since they marry at a very young age.

Ore washing starts at 8am and ends at 3pm. The fee for washing a puyong (consisting of 56 sacks) is P60.00. About 810 women can wash at least 710 puyongs. At 10 puyongs per day, each woman could earn P60.00P75.00 per day and P225.00 for 3 washing days in a week. Other women sew sacks outside the tunnel. Each repaired sack costs P2.00P3.00. A woman can sew about 3050 sacks a day, which could earn her P90.00P150.00 per day.

young worKersin Kematu, tboli, young workers aged 1324 are doing hard labor in the tunnels. These young workers are usually out-of-school youths from Barangay Kematu, the neighboring upland barangays in tboli and migrants from other municipalities. young workers are usually the

27


packers and atraseros. Some are seen working as ball mill operators in the processing area, with monthly salary of PhP4, 000.00.

An experienced atrasero can earn a minimum of P500 to as much as P1,000 per day. carrying of one puyong of ore costs P50P60. Each puyong will be manually transported outside the tunnels and down to the ore piling area. The distance of the tunnel to the stocking area matters in pricing the labor fee for every puyong. Working in the mine enables the young workers to buy clothes, shoes and cellular phones and enabled them to send money back home.

environmentAl impAct local environMental regulationsThe Sangguniang Panlalawigan of Benguet enacted Provincial Ordinance No. 04-91, entitled the local Environmental code of the Province of Benguet, on June 4, 2004. The ordinance protects and manages the resources of Benguet. Under the mineral resources section (Section 12), the ordinance complemented the existing mining laws (Philippine mining Act of 1995 or rA 7942, Small-scale mining Act or rA 7076, dENr dAO No. 95-23 as amended by dAO 96-40, series of 1996 and Small-scale mining law or Pd 1899) governing the small-scale mining operations in the province. Benguet has a proposed Small-Scale mining code (not yet the official name of the ordinance) due for second reading (as of November 2011) in the Sangguniang Panlalawigan. The said ordinance, if approved, will govern the issuance of permits from SSm activities and impose tax for extracted materials including minerals and also imposition of penalties and violation fees.

in South cotabato, aside from the national laws on small-scale mining, there are three local laws that include provisions on environmental protection related to small-scale mining operations. These are (1) Ordinance No. 04, series of 2010 also known as the South cotabato Environment code which was enacted on June 9, 2010, (2) Executive Order No. 12, the rules and regulations implementing the Provincial Environment code of South cotabato in 2010 and (3) resolution No. 144 series of 2003, a resolution Enacting Ordinance No. 07 series of 2003, an Ordinance levying taxes, fees charges and Other impositions on Small-Scale mining, mineral Processing Operations and transporting of mineral Ore within the Province. These three local laws specify the rehabilitation of areas damaged due to mining activities. The Provincial Environment management Office (PEmO), along with the Provincial mining regulatory Board (PmrB) is mandated under these laws to monitor and oversee small-scale mining operations in the area. This is in coordination with the municipal and barangay lGUs.

sMall-scale Mining Practices and the environMentin South cotabato, the Provincial mining regulatory Board (PmrB) enforces the total ban of all hydraulic mining, panning and amalgamation operations (Afrim 2011g; Provincial Environment and management Office 2011). hydraulic mining which was locally known as

28


banlas was a popular way of surface mining using hydraulic hose and sluice boxes. This is operated by three or more persons in an open area that is positive for gold. This is done next to creeks or rivers to easily drain the water that will wash the ores with gold. This was prohibited because it destroys vegetation, causes soil erosion, exposes tree roots, silts and pollutes rivers through the use of mercury. furthermore, this operation comes with the illegal cutting of trees to be used as slabs to assemble sluice boxes. Banlas has been documented to be operating in the mining areas in tboli and in the Sagittarius mines areas in the municipality of tampakan.

in tboli, South cotabato, mENrO official incident reports for 20082011 showed 11 landslides, 2 underground tunnel collapses (cave-ins), 1 gas poisoning incident and various cases of illegal logging and illegal SSm operations. cave-ins, gas poisoning and unsafe working conditions in the tunnels (e.g. electrocution) resulted in the death of nine mine workers. it was reported that there are at least 1,000 tunnels in tboli, 300 of which are currently abandoned due to lack of financing. The mining operations in tboli also resulted in the loss of old growth forest in the area and the dramatic decrease of previously 91,000 has. of forest to the remaining 13% total forest cover (2011h). The area has become vulnerable to landslides and this poses continuous threats to communities living within the mining areas.

the PmrB and the lGUs conduct monthly joint monitoring activities to ensure safety wiring and timbering and to see to it that the general condition of the tunnels complies with regulations. they also provide seminars on retrieval operations, mine safety orientations and disaster preparedness in the mining area. the mGB and PmrB in coordination with the lGUs conduct quarterly monitoring of tunnels, while mENrO conducts monthly tunnel inspections. Additional inspections are done when there are emergency reports from the community. two personnel from mENrO are assigned as mine Safety inspectors.

The mENrO monitors the compliance of the processing plants with Ecc (Environmental compliance certificate). The regional office of the EmB admitted that the agencys quarterly monitoring, as mandated, is not carried out due to lack of personnel. instead, bi-annual monitoring is conducted. The lGU personnel have complained about the absence of EmB personnel in joint monitoring activities. The poor compliance of gold processing plants with the requirements of the Ecc has serious implications primarily because the gold processing area designated by the local government of tboli lies within the residential area of the municipality. currently, 200 gold processing plants are operating in the area. At present, there exists a national order to the EmB to suspend the issuance of Ecc to small-scale mining in the entire region (2012a).

in Benguet, cave-ins, gas poisoning and landslides are also common in some SSm areas. hydraulic mining is not common in Benguet. Small-scale miners want the government agencies to legalize the use of dynamite for blasting. They also want to make the process of getting permits to cut trees for tunnel timbering simplified. At present, dynamite blasting

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and cutting of trees are done without permission. it is important to note that it has been a tradition in Benguet not to tunnel during rainy seasons. This somehow decreases the number of cave-in and gas poisoning cases. however, this practice is threatened by the influx of SSm workers and operators who are not from Benguet.

gold Processing and the environMentin both provinces, the modern practices of gold extraction processing and refining utilize chemicals like mercury, cyanide, nitric acid and zinc. mercury is more common in tboli, South cotabato than in Benguet. There are a total of 67 ball mills and 5 ciP plants in tboli (2011g). The number is based on PEmOs list of ball mill plants. The mtO, however, has estimated a total of 250 ball mills operating in the area, excluding those that are not registered. The locations of these gold processing plants are concentrated in the lGU-designated eight-hectare industrial area in Barangays Edwards and Poblacion, tboli. however, despite being designated as an industrial area, the place is teeming with residents. Processing plants operate with tailing ponds established within their respective areas having a minimum size of 1.5m x 2m (for the ball mill processing) and a maximum size of up to hectare (for ciP plants). The ponds are connected by open canals and/or underground pipelines. inspection and verification activities conducted by mENrO Safety inspectors revealed accumulated stockpiled wastes, absence of wastewater discharge lines and absence of perimeter fence among others (Ibid). There are no reported water contamination, human poisoning and spread of disease at present. however, some coconuts around a gold processing plant have yellow leaves, indicating heavy metal contamination in the soil (refer to tboli Plates).

The process of refining gold through smelting using blue torch flame produces fumes. The fumes are a by-product of treating gold and silver with mercury and nitric acid under very high temperature. A separate gold smelting facility with a smokestack was in the vicinity (refer to tboli Plates). The fumes emitted from the stack pose danger to air, plants and humans within the area.

in Benguet, the processing plants visited are situated near the river, creeks and along roads. The use of cyanide, nitric acid and zinc are common in leaching plants. There are tailing ponds but they are not constructed to meet some standard of safety. They are not cemented and are in direct contact with the soil. heavy metal contamination to surface and soil was also observed.

SociAl impActPublic healthThe use of chemicals for gold extraction and refining in the processing plants of tboli posed threats to the health of plant workers and the community. Among the noted health threats are the non-use of personal protective equipment while working in plants, exposure to mercury

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while processing the ground ore in basins using bare hands and during packing of tailings with possible mercury contamination, inhalation of smoke from burning carbon with gold in a drum, exposure to cyanide in the ciP plants and inhalation of fumes from smokestacks. The poor construction of the tailing ponds in these plants is harmful to animals and humans. incident reports revealed death of cattle in Barangay Edwards after drinking toxic waste water from the ciP plants tailing pond. At present, there are no reports of spread of disease and poisoning in the community.

tunneling activities in tboli also concern the lGU due to the poor sanitary practices of the mine workers and their families. There are no toilets in the area as mine workers are staying in makeshift bunkhouses and tents. The improper disposal of human waste can cause adverse effects on public health.

the mine workers, like the abanteros, portal guards, tunnel inspectors, packers, atraseros, ore and sack washers and the processing plant workers like ball mill operators and ciP Plant personnel do not have any formal working contract with the tunnel owners. health insurance and other benefits are not provided. local and migrant workers, young and old, work in the mine site at their own risk. there are no death and hospitalization benefits when accidents happen but tunnel owners normally give financial assistance to the victims families.

in Benguet, the women identified respiratory diseases and back pains as common health issues associated with mining activities. The community sourced out water from the upland spring through pipelines. cyanide leaching plants without properly constructed tailing ponds and/or wastewater treatment basins posed threats, as chemicals may contaminate surface water, soil and underground aquifer (2011a) .

educationAn interview with a teacher in desawo Elementary School, revealed that in the school with a total of 380 pupils and 10 classrooms, only 30% of grade 1 pupils will make it to grade 6. the ratio of girls to boys that finish elementary level is 2:1. One of the reasons seen by the teacher is that the young boys are attracted to work in the mine and earn money. Usually by grade 3, male students are more likely to stop going to school and work in the mine. the teacher shared that since she started teaching in 1995, none of her pupils finished college.

basic servicesThe local revenues collected from the small-scale mining operations go directly to the lGUs General fund. There is no ring-fencing of funds collected from the sector that can be utilized as a source of funds for development projects in the mining community and the improvement of basic services like health, education and socio-cultural programs for the people within. There are no technical assistance and capability building for the development of the small-scale mining workers. There are no technologies and support programs that will help mitigate

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environmental degradation and prevent the negative impact on health of chemical-dependent gold recovery processes. The SSm communities, especially the traditional ones, are appealing for assistance to have alternative livelihood, basic social services and financial support or loan assistance from the government.

SummAry of findingS1. Economic. SSm operations in the area can contribute to the local revenue generation

provided that local policies are in place and enforced. it was shown above that at least 110% of the total revenue collected is contributed by SSm operations to lGUs. The sector provides immediate employment and livelihood for the residents and migrants. A comprehensive socio-economic survey among households and small mine workers in the area needs to be conducted in order to see the actual economic impact of SSm in the community.

2. Environment. The current practices of SSm operations threaten the environment. Because of weak enforcement of laws, a majority of the SSm operations are illegal and the facilities are substandard. Soil and water contamination exists in these communities. landslides and floods are also common.

3. Health and Safety. dependence on hazardous chemicals in gold extraction and refining processes exposes miners and plant workers to health problems. Workers do not use protective gear while working on mines and processing plants. The establishment of gold processing plants in residential areas poses health threats to the public.

4. Women. The SSm operations in the areas provided the women with livelihood from washing ores/sacks and participating in the initial processing of gold.

5. Cultural Dimension. in Benguet, SSm operation is historically part of their way of life. SSm defines their cultural identity. The traditional practices of SSm are threatened by competition for resource and profit. The introduction of new technologies, entry of migrant financiers and workers and the increasing demand for the resource and profit, along with the adverse impacts posed and continues to pose challenges to self-governance of iP communities.

6. Governance and Policies. Government suffers from weak enforcement of laws. regulation has been difficult in areas where SSm has been a way of life. in places where laws are enforced, SSm seems to be helpful in generating additional local resources. however, this does not guarantee an increase in social services in mining areas.

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chAllengeSSome of the challenges that are critical in understanding the small-scale mining industry are:

1. The legal definition of small-scale mining may no longer be applicable to all existing small-scale mining in the areas. A distinction has to be made between small-scale miners who use the traditional method of mining and miners who have mechanized and are using more advanced technologies.

2. republic Act 8371 or the indigenous Peoples rights Act (iPrA) of 1997 gave the iP communities priority rights in the extraction/development/exploitation of any natural resources and in entering into an agreement with large-scale mining companies. different claims over ancestral land created conflict between iP groups. A mechanism to validate the authenticity of some group of iPs claim over lands should be developed. iP communities have also been vulnerable to manipulation of big corporations.

3. The capability of both the national and local government in enforcing regulations should be examined. despite the existence of regulatory policy on SSm, enforcement of these policies has been a perennial problem.

4. mining communities should also be introduced to alternative livelihoods, to provide options to the residents of mining communities. This would provide additional economic activities in the mining areas and alleviate stress imposed on the environment.

5. The shift from agriculture to mining contaminates the soil and water supply and threatens food security and development of agriculture in the area.

concluSionSThe conflicting policies on resource extraction/development versus environmental protection and weak governance as indicated by the absence of local regulations threaten the environment and public health. The negative impacts of small-scale mining activities have been observed in many of these communities. Poverty and the attractiveness of immediate money from the mining industry attract children and women to work in the mines. These expose women and children to hazardous chemicals and unsafe mining practice.

Small-scale mining contributes to the local economy through job creation, increasing economic activity in the communities. Unfortunately, because of limited data, this research

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was only able to document small-scale minings contribution to the local tax collection of the local governments.

There is a need for the development of sound policies and laws to balance economic development and environmental sustainability. Strong enforcement of laws is a must. however, the conflict of interest of local officials who are in charge of regulation and governing the community and who also have interests in mining operations poses a threat in the strict enforcement of laws in the communities.

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referenceS1984. Presidential decree No. 1899. Establishing Small-Scale mining as a New dimension in

mineral development. Philippines.

1991. Peoples Small-Scale mining Act. in RA 7076. Philippines.

Afrim. 2011a. fGd with Barangay Ampucao federation of Small-Scale mining Associations (BAfSSmAi) Officers and miners. covered court, Barangay hall, Ampucao, itogon, Benguet.

. 2011b. fGd with tuba municipal Officials and NciP Personnel. municipal hall, tuba,Benguet.

. 2011c. Kii with Barangay captain mansueto l. dela Pena. Brgy. hall, Kematu tboli, South cotabato.

. 2011d. Kii with desawo integrated Small-Scale mining Association, inc. (diSSmAi) members. Brgy. Poblacion, tboli, South cotabato.

. 2011e. Kii with fernando mangili. SSm congress, Wangal, la trinidad, Benguet.

. 2011f. Kii with Joseph cervantes . BENrO Office, capitol, la trinidad, Benguet.

. 2011g. Kii with lourdes S. Jumilla , SEmS-PEmO. PEmO Office, capitol compound, Koronadal city.

. 2011h. Kii with mr. Julian c. Asion, Jr., municipal Environment and Natural resource Office. mENrO Office, tboli, South cotabato.

. 2011i. Kii with mr. melanie Bracamonte, municipal treasurer, tboli, South cotabato 17 October. .

. 2011j. Kii with Norberto Z. lapastora, Jr.. municipal Administrators Office, tboli, South cotabato.

. 2011k. Kii with Seigfred flaviano, PEmO in-charge. Governors Office, Provl capitol, Koronadal city, South cotabato.

. 2012a. Kii with Environmental management Bureau Personnel, EmB rXi, Koronadal city, So. cot., 01 february.

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. 2012b. Kii with mrs. fe Guardaya, ltOO ii, tboli, South cotabato. 02 february.

. 2012c. Kii with tunnel Operations manager, tmBmPc, Kematu, tboli, South cotabato, 02february .

Alyansa dagiti Pesante iti taeng Kordilyera. 2011. Primer on Small-Scale Mining and Clean Gold Advocacy.

caballero, Evelyn J. 2004. Traditional Artisanal Gold Mining Among the Kankana-ey and Their Current Concerns.

hentschel, t., hruschka f., Priester m., . 2002. Global report on Artisanal and Small-Scale mining. No. 70.

israel, danilo c. and Jasminda P. Asirot. 2002. mercury Pollution due to Small-Scale Gold mining in the Philippines: An Economic Analysis. Research Paper Series No. 2002-02.

municipality of tboli. 2010. muni

small scale mining

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