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At Large

Assessing mining

/ 08:53 PM November 12, 2012

Mining has lately come under scrutiny, with advocates claiming it could help lift the country out of the trap of poverty, and critics declaring it is more trouble than it’s worth, with the income earned by the government not enough to offset the damage done to the environment and to local communities.

The latest news is that some legislators are advocating the lifting of the “gold tax,” a 5-percent withholding tax and a 2-percent excise tax that, they say, has led to a spike in gold smuggling. Though there had long been talk (as in three decades’ worth) of rampant gold smuggling which usually involve small, independent miners and traders from China and Hong Kong, the recent 95-percent drop in gold sales to the Bangko Sentral ng Pilipinas has raised renewed alarms. This is because the country’s gold reserves are said to have reached a new low, threatening the country’s financial stability.

In the past year or so, Malacañang has attempted to forge a policy compromise between those demanding the total cessation of mining activities in the country and those pushing for the grant of more new mining permits, saying the economy would benefit greatly from the extraction of the minerals and metals which still lie buried underground. Part of the compromise measure was to raise the taxes imposed on mining products—including gold—increasing the income earned from mining by both local and national governments. Another feature are new rules calling for stricter monitoring of mining activities, the imposition of more rigorous environmental standards, and stronger protective measures for communities where mines are located, particularly those in the “ancestral domain” of indigenous peoples.


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OPPONENTS of mining point to the many environmental risks posed by mining activities, including the use of toxic chemicals such as mercury to extract gold from ore, and the despoliation of rivers, rice fields and even the sea due to the careless disposal of toxic materials.

But to fairly measure the impact of accidents like spillage, one needs first complete information and then an open mind.

When reports surfaced about the spillage from a tailings pond of the Philex Mining Corp. in Padcal, Benguet, people immediately assumed a major environmental catastrophe had taken place. People had not forgotten about the disaster that took place in Marinduque in 1996, with the collapse of the wall of a “disposal lake” of mining waste, discharging mine tailings into the nearby river system. So devastating was the damage done to the Boac River and the people depending on it for subsistence that a UN assessment, according to Wikipedia, declared it a “major environmental disaster.”

This may not be the case, though, with the Padcal mine. First of all, while the Marcopper operation used “open pit mining,” the Philex operation used underground tunnels that have been in use since 50 years ago. The tailings pond in Padcal breached its walls as a result of heavy, continuous rains caused by Typhoons “Ferdie” and “Gener” last July and early August, as well as by seasonal monsoons. And as early as Aug. 2, company officials had informed the relevant government agencies about the leak, while declaring that operations cease at once. This decision has led to the loss by Philex of P30-40 million a day with the suspension of operations and efforts to plug the leak and clean up the affected areas.

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THE Padcal pond empties out into Balog Creek which in turn flows into the Agno River, which stretches 280 kilometers from Benguet to Pangasinan.

In all, say spokespeople of Philex, a total of 46 households reside along the river banks, and some 300 employees engaged in the cleanup efforts have been working not just in reinforcing the walls along the creek and clearing the waters of debris, but also in helping the affected residents find alternative means of livelihood.


At the same time, the company has embarked on a long-term “cleanup and restoration plan,” engaging environmental consultants from UP Los Baños to draw up schemes for the different aspects of the rehabilitation effort, from water quality to soil erosion to conservation.

All this in addition to efforts over the years, long before the spillage, to reforest the area and work with communities in the surrounding area of the mines.

A well-known environmental advocate and outspoken critic of the mining industry has declared that “responsible mining” is an oxymoron, that there cannot ever be a mining operation that is “responsible” or which safeguards the community even as owners profit from it.

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BUT surely there is room for a middle ground, between unabated, uncontrolled exploitation of resources, and regulation that safeguards the long-term welfare of communities and of the environment.

The Padcal mines incident may be an unfortunate offshoot of the risks involved in mining operations, but there will always be risks involved in any “extractive” industry, be it mining, oil exploration or even hydro energy development.

One lesson to be drawn from the experience may be the need for careful monitoring and for cooperation, in the event of accidents, among the mining companies, regulatory agencies, the communities and civil society.

Surely, mining activities could prove to be “responsible,” too. After all, the long-term survival of mining companies depends on caring for the environment which hosts their enterprises, and respecting the people who share their fate with the earth that supports both of them equally.

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TAGS: column, environmental risks, gold smuggling, mining, Rina Jimenez-David
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