Is large scale mining set to drive economic growth in the Philippines?
Gold mining in the Compostela Valley in the Philippines is currently shared by an American company St Augustine Gold and Copper and a group of approximately 600 families who have been effectively “squatting” there to eke out a living since the 1980s. The company would like to “evict” the squatters and in their place develop a huge pit to mine the 962 million tons of gold which are thought to lie there. The company promise in return to clean up the local environment and create new jobs.
The government in the Philippines is pro the plans of the American company on the grounds that mass mining on this scale will help general economic growth. Obviously the small scale miners are wary of the development plans and amongst other concerns they are keen to share in the profits themselves.
This example is mirrored in other rapidly growing economies that are deliberating over the costs verses the benefits of the mining industry. In Indonesia for example a 20% tax has been introduced on mineral exports leading to a debate as to whether the tax will discourage foreign investment.
The Philippines is wealthy in natural minerals with the greatest untapped gold and copper deposits in the region. But it has not always been the safest place for foreign companies to set up business and mining operations have been vulnerable to attacks and extortion from rebel groups. Historically, the government has tried to encourage foreign investment with measures like low taxation and security paid for by the state. However, the government now argues that increased taxation could fuel the economic growth that the country needs. There are concerns though not only about the environmental issue of mass mining but also the effect on the indigenous population. The opposition to mass mining has resulted in 20 governors actually banning certain forms of large scale mining in their areas.
The St Augustine’s Compostela Valley project illustrates perfectly the debate which is now raging. The executives who are responsible for the project argue that it represents and new standard of social responsibility in mining with most of the work force being hired from the local community and with detailed plans as to how the landscape will be restored post-mining with reforestation projects. However, local leaders remain sceptical about the plans.
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Link to this article: : http://www.goldmadesimplenews.com/mining/is-large-scale-mining-set-to-drive-economic-growth-in-the-philippines-7928/
Posted by Kate Gerbich on Sep 14 2012. Filed under Mining.
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