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The Department of Environment and Natural Resources-Mines and Geosciences Bureau (DENR-MGB) is pushing for rationalized conduct of small-scale mining, which authorities estimate as being undertaken by some 300,000 individuals nationwide, to help raise this activity's compliance with applicable regulations and contribution to the country's economy.

"We'll promote establishment of 'minahang bayan' or people's small-scale mining areas (PSSMAs) nationwide," said DENR-MGB Director Leo Jasareno.

Republic Act No. 7076 (People's Small-Scale Mining Act of 1991) provides for establishing PSSMAs "in sites onshore suitable for small-scale mining" so legitimate small-scale miners can operate there, making them as well as their extraction activities and output easier to monitor.

Jasareno admitted that monitoring is difficult at present since it's unclear where and how small-scale mining is being undertaken and who are legitimately engaged in this activity which is under local government jurisdiction.

DENR-MGB's bid for rationalizing Philippine small-scale mining gained headway earlier when Department of Justice (DOJ) Opinion No. 29, Series of 2011, said R.A. 7076 "completely repealed" Presidential Decree 1899 (Establishing Small-Scale Mining as a New Dimension in Mineral Development).
The DOJ Opinion also clarified P.D. 1899 "no longer has the force and effect of law."

Justice Secretary Leila de Lima signed such DOJ document dated June 27, 2011.

DENR-MGB sought the opinion in its April 28, 2011 letter to DOJ, believing the chaotic state of Philippine small-scale mining is partly due to confusion over which of R.A. 7076 and P.D. 1899 truly governs this activity.

R.A. 7076 defines small-scale mining as "mining activities which rely heavily on manual labor using simple implement and methods and do not use explosives or heavy mining equipment."

Small-scale miners "refers to Filipino citizens who, individually or in the company of other Filipino citizens, voluntarily form a cooperative duly licensed by DENR to engage, under the terms and conditions of a contract, in the extraction or removal of minerals or ore-bearing materials from the ground," R.A. 7076 also reads.

Such law provides for issuing small-scale mining contracts to qualified parties concerned, DENR-MGB noted.

The contracts cover co-production, joint venture or mineral production sharing agreements between government and small-scale mining contractors for small-scale utilization of mineral land plots, DENR-MGB added.

DENR-MGB reported only two PSSMAs have been established since R.A. 7076's enactment.

Such PSSMAs are in Tubahong, Dinagat Island province, and Buenavista municipality in Quezon province.

"Chromite and gold deposits exist there, respectively," noted Larry Heradez, chief of DENR-MGB's Mining Tenements Management Division.

He said there are about 10 pending applications for PSSMAs.

Mining tenements issued under P.D. 1899 include processors' permits pursuant to DENR Administrative Order 05, Series of 1989, as well as small-scale mining permits.

The late former President Ferdinand Marcos issued P.D. 1899 in 1984.

Citing 2007 data, a DENR research proposal previously reported small-scale mining exists in 40 provinces.

Such proposal aims assessing small-scale mining practices, noting the country's environment deteriorated and mineral resource depletion became a problem despite existence of regulations and policy guidelines on mining.

Among small-scale mining practices DENR continues opposing is discharging waste directly into the environment as this contaminates water and other elements.

One measure DENR-MGB is considering to address such problem is putting up common and regulated processing facilities for small-scale miners.

Jasareno said the target is to provide such facilities with waste disposal systems.

"We expect this to help improve the environment," he said.

DENR-MGB also continues calling for local government restriction on small-scale mining so geological stability in areas with such activity can be preserved to help guard against disasters like last year's landslide that struck a mining community in Compostela Valley province's Pantukan municipality.

Gold's international market price surged to US$ 1,600/oz from US$ 800/oz five years ago, fueling a mining frenzy even among local individuals who either have or don't have local government authorization to engage in small-scale mining, Jasareno said following the tragedy.

Last year, DENR assured boosting coordination with other agencies to help address the 76 percent decline in gold that small-scale miners are mandated to sell to Bangko Sentral ng Pilipinas (BSP).

DENR suspects smuggling to be behind such decline.

MGB reported that data for 2011's third quarter show BSP's gold purchases from small-scale miners declined to 1,722 kilograms during the period from 7,166 kilograms in 2010.

Value of such gold sold correspondingly dipped to P3.55 billion from P12.32 billion during the reference period, MGB noted.

The Bureau of Internal Revenue earlier issued Revenue Regulation 7-2008 covering taxation on sale to BSP of gold and other metallic mineral products extracted or produced by small-scale miners, DENR noted.

DENR added that such regulation requires imposition of two percent excise tax and five percent withholding tax on gold the miners produce and sell to BSP.

By PNA/PIA9-ZBST