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Manila targets gold miners in latest crackdown

A Philippine miner hauls unprocessed ore from the seabed onto the beach in Leyte. Image: Luc Forsyth

Rodrigo Duterte, sworn in as the Philippines president at the end of June, and close ally Gina Lopez, Environment Secretary, has ratcheted up the rhetoric against mining companies operating in the country. Reuters quoted Duterte last week as saying the country could forego the $850m in government revenues from the mining industry which represents just 1% of GDP.

The Philippines natural resources ministry is conducting an audit of all mining operations within the country and have already shut down six mines since Duterte came into office, three of them nickel mines. The ministry is also calling for an outright ban on all open pit mining and a 2012 moratorium on new mining licences also remains in place.

Over the weekend, Lopez set her sights on small-scale gold miners in the country, estimated to number in the hundreds of thousands. According to a report in the Philippine Star Lopez ruled all small-scale mining activities operating outside the country’s mining co-operatives system (referred to as Minahang Bayan) “were illegal in nature and that they should be stopped immediately.”

There are only three established operations in the country of this kind and as much as 60% of the country’s production of gold could be affected by the new decree.

According to World Gold Council data the Philippines produced 41.1 tonnes or less than 1.5 million ounces in 2015 placing it in the top 20 producing countries globally and number three in Asia behind China and Indonesia.

According to PGI Intelligence, a London-based research company, investment in mining in the Philippines dropped to a three-year low of just $924m last year.

The proposed changes to the licences, which are supported by the new Duterte administration, would increase the government’s share of mining revenues.

Mining companies in the Philippines already face the most burdensome tax regime in Southeast Asia, with an average of 40% of revenues transferred to the government, via a 30% corporate income tax and several mining-specific taxes according to PGI.

Image: Luc Forsyth