Concerns With Small Miners
Richard Mills, Chairman
mining is as old as time and it remains today an important source of
subsistence income to people in many emerging countries. No international
miner would dispute this and most find a certain nostalgic appeal to the
enterprise. Despite the brotherly admiration that exists, problems are
created when one group is held to a vastly different set of operational and
regulatory standards than the other. This is the situation in most emerging
countries with vibrant mining sectors and Philippines is no different.
To be a large
scale miner in Philippines is to be beholden to the Department of
Environment & Natural Resources (DENR). It is this agency that regulates
and enforces the activities of all international miners operating in the
At a recent
well-attended presentation to the Australian Chamber of Commerce in Manila,
Secretary Lito Atienza gave a status report on what he feels are the most
important issues he is grappling with these days and most of them seemed to
have to do with the "misalignment of interests" between large and
Secretary Atienza, there are about 2000 Small-Scale Mining Permits
outstanding in the country. Small-Scale Mining in Philippines is defined as
mining relying mainly on manual labor using simple tools and methods. The
permits require the small-scale mine to be less than 20 hectares in size and
to extract no more than 50K tons of ore per year.
some large-scale operators are alleged to have used Small-Scale Mining
Permits to run mines that are out of proportion of these limits. Even worse,
environmental and safety violations are said to be rampant.
small-scale miners (and those posing as such) are said to be less able to do
the extensive community support and development work that is expected of
large scale miners. As a result, some communities are at risk of becoming
anti-mining. And who can blame them? If all they experience are the
negatives of "old-fashioned" mining practices without the
positives of "new-age" mining’s community support, they will
naturally feel less enthusiastic.
The causes of
these problems are said to be the result of 2 misalignments. First, a small
scale mining permit takes a few minutes to acquire and is issued at the
local government level. By comparison, permits for larger-scale mines are
issued at the national level by the DENR and take many months or even years
to receive because rigorous and extensive requirements must be met. The
current estimate for a relatively simple exploration permit is 8 months.
misalignment of interests has to do with tax transfers. Secretary Atienza
admitted that in the past direct taxes paid by large scale miners were often
not forwarded to local government
units in a timely manner. Even today, the time required for these transfers
is said to be up to 4 years. Needless to say, taxes and other payments from
those operating under Small-Scale Mining Permits take a lot less time to get
to local officials.
Atienza says he is committed to addressing these misalignments which many
feel are holding back full development of the country’s vast mineral
resources. He seems well-appointed to the task in the opinion of the
industry. All eyes will be upon him and we wish him well.
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