Mineral output drops 26% in H1

Manila, Philippines -  Total mineral production value during the first semester of 2012 fell 26 percent because of a 95 percent decline in gold purchases by the Bangko Sentral ng Pilipinas (BSP), according to the report of the Mines and Geosciences Bureau (MGB).

Total mineral production value for the first six months of the year was placed at P51.2 billion against P69.2 billion in the same period last year.

In a report to the Department of Environment and Natural Resources (DENR), MGB Director Leo Jasareno said the decline in gold purchases began during the second semester of 2011 when the Bureau of Internal Revenue (BIR) – pursuant to Revenue Regulations No. 7-2008 dated March 25, 2008 – strictly imposed the collection of the two percent excise tax and 10 percent creditable withholding tax (CWT) from the sale of gold by small-scale miners and traders.

The said regulation was superseded by Revenue Regulations No. 6-2012 dated April 2, 2012, which reduced the CWT from 10 percent to five percent effective April 2012. 

The BSP, through its five buying stations in Baguio City, Davao City, Zamboanga City, Naga City and Quezon City, imposes the corresponding taxes on small-scale miners/traders for remittance to the BIR.

“Given the continuing high price of gold and the increasing number of small-scale mining areas, the decrease in gold purchases by the BSP clearly indicates that gold outputs are going to the black market and smuggling activities,” said Environment Secretary Ramon Paje.

Jasareno said that the substantial drop in the gold purchases of BSP from small-scale miners and traders was a “telling factor for the sluggish performance.”

Total gold production for the first semester fell to 8,382 kilograms valued at P18.18 billion, from 22,804 kilograms worth P44.52 billion in the same period last year.

Jasareno said the BSP gold purchases accounted for only 786 kilograms this semester as against the 15,003-kilogram contribution last year, representing a 95 percent plunge. 

“In effect, the BSP gold purchases shared only a dismal 9.37 percent of the entire gold production, compared to 74 percent a year ago,” Jasareno said.

The report also said that in terms of percentage contribution to the total mineral production value, nickel outperformed the other metals with a 44 percent contribution with a production value of P22.40 billion. 

Gold contributed 35 percent to the total production value at P18.18 billion, followed by copper which has an 18 percent share, with P9.02 billion. 

The remaining three percent or P1.61 billion, was shared by silver, zinc, chromite and iron.

The report added that before 2012, gold has always led in production, contributing about 50 percent of the aggregate metallic production value.

Paje expressed confidence that the mining industry would attract more investments because of the issuance of the new mining policy.

“We see big mining projects in the pipeline, encouraged by the clearer direction the government is now taking in view of the issuance of E. O. No. 79 or the mining policy of the Aquino administration,” he said.

“The development works of the $300-Million Didipio Copper-Gold Project of Oceanagold in Nueva Vizcaya and the $1.2-Billion nickel processing plant of Taganito HPAL in Surigao del Norte are in full swing. We can add to this the advance exploration works in the $800-Million copper-gold project of Goldfields Limited in Benguet, the $800-Million Kingking copper-gold project of NADECOR in Compostela Valley and the US$ 800-Million Silangan copper-gold project of Philex Mines in Surigao del Norte, and we are sure that the industry is bound for better times,” he added.

Paje said he is also seeking the immediate constitution of the Anti-Illegal Mining Task Force as mandated under Executive Order (E. O.) No. 79 to address the perceived gold smuggling.