Weighing the cost of gold rush in Benguet

Business MIrror

Posted at Oct 16 2008 11:14 AM | Updated as of Oct 17 2008 12:10 AM

The soaring value of gold has pushed more impoverished people in Benguet to small-scale mining for a livelihood. They venture deep into the bowels of mined-out tunnels trying to find anything that glitters, albeit scraps from decades of exploitation by big mining companies.  In the black market, gold prices have trippled in the last five years. According to small-scale miners, the prevailing rate as of today is P800 to P1,000 per gram. In a span of one month, a miner unearths gold ore worth a measly P10,000 to P15,000.

Small-scale mining is one of the major income providers for the people of Benguet and those coming from other provinces. Benguet Province is home to more than 15,000 small-scale miners who make out a living by extracting gold.

“For many communities, small-scale mining has become a traditional way of life,” said Lomino Kaniteng, President of the Benguet Fedration of Small Scale Miners. “Mining is so important as it is the alternative livelihood of residents next to farming, especially nowadays that the price of gold is high and there is a slump in prices of agricultural farm products.”

But Kaniteng told BusinessMirror that there is a low production in gold ore nowadays as pockets of stringers or veins left out during the active mining operations were patiently dug by small-scale miners.

He also ticked off some problems encountered by the small-scale miners such as safety and health due to poor sanitation and lack of ventilation in the underground working areas; very low production because of traditional mining operations method; unstable grade of ores, among others.

In mineral-rich but often inaccessible parts of Benguet, officials from the Department of Environment and Natural Resources’ Mines and Geosciences Bureau in the Cordillera said most of the small-scale miners, both legal and illegal, are still trying their luck for gold rush in closed mining tunnels.

“It’s really a game of chance,” said DENR-MGB Mine Management Division Officer-In-Charge Alfredo Genetiano. “You will probably find something worth today and the next day you find nothing.”

The Cordillera is endowed with vast mineral resources. Most of the ore deposits found in Benguet include metallic minerals like gold, silver, copper, lead, iron and zinc.

“But most of them do not think of what safety standards they operate under. And do these small-scale miners really get the monetary rewards that they deserve?” Genetiano asked.

In Benguet, most of the small-scale mining is done by hand, with broken shovels, plastic buckets and improvised mine cart, hammers. They literally moved a mountain shovel by shovel in most mining tunnels closed by large-scale mining companies as early as the 80s.

“ Most of these working areas are considered unsafe. If they consider it as their livelihood they should be aware that nothing comes free, that it includes risking their lives,” Genetiano told BusinessMirror.

The Gold Rush in Benguet

According to the Benguet Province mining history, the discovery of gold in Benguet by early settlers in the early 1900s led to the “Gold Rush” and the subsequent flourishing of mining industries in the locality.

American prospectors and investors fueled the mining activity, eventually founding the first corporate mining firm, Benguet Consolidated Mining Company in 1903, to exploit the gold deposits of Antamok, Itogon. In 1905, the Suyoc and Lepanto in Mankayan, Benguet was opened for mining ventures. The Balatoc Mining company was organized in 1925. In 1936, Lepanto Consolidated was established; and later in the 1950s, Philex Mining Corporation.

In 1984 Presidential Decree 1899 was signed into law regulating small-scale mining in the country. As part of the mining industry, the Republic Act 7076 was also enacted in 1992, which intend to recognize small-scale mining.

“Small-scale mining has been the livelihood of local communities since the gold rush in Benguet. It is just appropriate to recognize them as part of the mining industry. But we should re-evaluate the mining provisions if they are really beneficial also to the small- scale industry,” Kaniteng said.

Kaniteng said that with the closure or suspension of some mining industries in Itogon town, unemployment surged resulting to the increase in small-scale mining, legal and illegal, within the community.

Gold shimmers on

Data obtained by BusinessMirror from the Mines and Geosciences Bureau in the Cordillera shows that in Benguet alone, gold production for 2007 from three large mining companies—Lepanto Consolidated Mining Corporation, Philex Mines Corporation and the Benguet Corporation-Acupan Contract Mining Project—was 6, 109.22 kilograms for a total of P6.23 million. On the other hand, sales last year for gold export of 6,137 kilograms was P6.3 million or $ 136, 046,505. Most of them were exported to England and China.

From January to June 2008, gold production was 2,464.796 kilograms or P2. 63 million.

These large companies also produced a total of 6,716.22 kilograms of silver, and 79,254.00 diumetric tons of copper. In January-June 2008, 13,700.186 kilograms of silver and 40,843 diumetric tons of copper were produced.

For the small-scale mining industry, the Mines and Geosciences Bureau admitted having a hard time monitoring small-scale mining production, as most of these operating illegally.

But one small-scale mining group, the Camp 6 Explorer’s Small Scale Mining Association, Inc. with more than 140 members, registered 3,475 kilograms of gold, silver and copper in 2007 with a sales of about P1.7 million.

“We are trying hard to attract more mining investments whether big- or small-scale. But we make sure that before they operate they meet certain standards for mining explorations like sustainable development, social equity and environmental protection,” Genetiano said.

The MGB listed at least five priority mine projects in Benguet: Teresa Gold Project, Far Southeast Project and Victoria Project all by Lepanto in Mankayan, Project 3000 of Itogon Suyoc Mines, Padcal Copper Expansion Project by Philex Mines, and the Batong Buhay Project by the Philippine Mining Development Corporation. Most of the projects are already in operation with gold and silver as the common mineral.

Regulating the small-scale mining industry

Due to the competitive and often unregulated nature of their operations, these miners operate in dangerous environments, frequently using unsafe methods of tunnelling that are often detrimental to the health and the environment of surrounding communities.

Gov. Nestor Fongwan said the Province of Benguet has allocated a budget to tackle the issue of registration of mining activities of small-scale miners’ groups, as well as the regulation of the industry in Benguet.

“Regulating these miners would likely help prevent accidents and protect the workers,” Fongwan said.  “We have to help them and come up with an industry profile.”

MGB Regional Director Neoman De La Cruz agreed with Fongnwan’s observation. He said a review of the regulations of the small-scale mining industry should be carried out immediately.

“They (small-scale miners) have to legalize their operations and regulate safety in the work sites as well as adhere to health and environmental regulations,” De la Cruz said.

De La Cruz said small-scale mining should be regulated by the same legislation with that of large mining companies such as for the environment, labor, mineral rights, exploration and mining permitting, and skills development.

But for the President of the Benguet Federation of Small-Scale Miners, a provision for the reconciliation of the mining code is needed instead of regulating the industry.

Kaniteng is referring to the Republic Act 7942 (Philippine Mining Act), RA 7076 (Small-scale Mining Act). He said these mining laws that resulted in the “increasing marginalization and impoverishment of poor communities” should be reviewed.

“The problem is that, these laws favor the big mining companies to the detriment of poor people like the small-scale miners. We need to seek balance so that we all benefit from it,” Kaniteng said.

He said the main barrier for illegal small-scale miners to be regulated is the difficulty of getting a mineral consent from the big mining companies in vast mining areas in Benguet.

Kaniteng said the national government also failed to provide employment and alternative livelihood to the mining communities after large mining companies closed or suspended their operations, pushing the miners to illegal small-scale operations.

Admitting that it is difficult to regulate the small-scale mining industry, engineer Gregory Balacua of the MGB said it is important to equip the miners with basic mine safety.

“You cannot guard them (small-scale miners) everytime because that’s their livelihood. But it is important for them to be regulated and taught with basic mine safety,” Balacua said.

He said a miner should be taught safety measures while inside the tunnel, such as what mine safety equipment to bring, first aid, among others.

The review of policies and regulations on small-scale mining was prompted by the recent incident where 16 small-scale miners were trapped inside a flooded mine tunnel in Barangay Poblacion in Itogon, Benguet on September 22 at the height of typhoon Nina.

Of the 16 workers, 10 were rescued alive and six died after more than a week’s ordeal inside the tunnel. They were brought to the Baguio General Hospital for treatment and testing as most of them suffered from loss of oxygen, dehydration and cuts and bruises.

Digging to survive

While more mining means more work and money for people in the so-called mineral-rich belt of Benguet, it also means more injuries and more deaths.

For small-scale miner Rudy Boling, Jr., they do not try to become wealthy but instead dig the tunnel to find chips of gold ore just enough for themselves and for their families.

”It is really life-threatening,” 22-year-old Boling said as he gasped for oxygen at the hospital while recalling his ordeal. “When you see how narrow the tunnel is, you can see just how dangerous it is to be there.”

He recalled that while trapped inside the mining tunnel site as low as 700 feet, all he could do was pray, drink water from rock drippings, chew a momma (betel nut) and wait to be rescued.

Miner’s live with death as a constant threat, said 32-years-old miner Mario Anayasan, one of the survivors of the tragedy. “We do not have any other means of livelihood so we have no choice but to toil down under and look for something that glitters,” he said. Anayasan said he is undecided if he is going back to small-scale mining or find alternative livelihood like vegetable farming.

But 22-year-old miner Antonio Pagulayan realized that life is too short to enjoy it. “Right after the incident, I thought of my family. I will go back to them and cherish every moment with them,” Pagulayan said.

Mining is an important part of the Cordillera economy and has been the driver of much of the economic development of the country. However, the people of Benguet province want to see a well-regulated industry as being the cornerstone of future upliftment of disadvantaged people, as well as the safety of the miners and their surrounding communities.