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CAGAYAN DE ORO CITY, Philippines - Claims of mining proponents that the industry has the potential to be the country’s catalyst for economic growth and, thus, address mass poverty have never been proven.
“The role of mining is always described as ‘potential’ because mining has never played a major role in our development, even during the mining boom of the seventies and early eighties,” lawyer and civil society leader Christian Monsod said during a forum on Executive Order 79 at the Archbishop Patrick Cronin Formation Hall here recently.
Although, according to the book, “Investing in ASEAN 2011-2012,” produced by the Association of Southeast Asian Nations, the Philippines possess at least US$1 trillion in untapped mineral resources, Monsod explained that “most of the mining in our country, after 50 years, is still extract-and-export-ore activity and there is no significant industrialization footprint based on our mineral resources. Not surprising, since the mining companies have to protect their downstream plants or those of their partners abroad.”
Monsod also debunked mining firms’ claims the industry can provide enough work to stem the diaspora of Filipino jobseekers.
“Extraction mining is known all over the world as a low job-generating activity. In our country, its average employment contribution over the years is about 1/3 of 1 percent of total employment … In the proposed Tampakan project in Mindanao, involving some US$5.9 billion investments, the permanent jobs will only number 2,000, or an invested capital per job of about P125 million. The comparable rate for call centers is reportedly P6 million per job,” he said.
“Investing in ASEAN 2011-2012” says the Philippines’ gold ore reserves alone are the third largest in the world, estimated at four billion tons, while copper ore deposits are estimated at 7.9 billion tons, the fourth largest.
The Philippines also has the fifth largest nickel deposit in the world, estimated at 815 million tons. This is aside from deposits of high-grade chromite, silver and other minerals.
If all these resources are tapped, the Philippines could fuel Southeast Asia’s emergence as a “global mining force” within the next few years, the ASEAN book claimed.
But Monsod, citing former Economic Planning Secretary Cielito Habito, said based on national input-output tables, the backward linkages of mining are only .46 or less than half of other industries, and the forward linkages a low .82 (below 1) -- which does not give mining “enough value-adding activity” to merit priority.
News reports have also quoted Ruperto Majucas, assistant director general of the National Economic and Development Authority NEDA, as saying the full impact of the mining industry, particularly on employment and the domestic economy, remains limited.
The agency placed the industry’s impact on the country’s gross domestic product at less than P200 billion with direct and indirect job generation less than half a million this year and the next.
NEDA estimated the contribution of the industry this year to be only 0.74 percent of GDP. Projection for next year is 1.17 percent, while jobs will reach only 276,000 this year and 485,000 next year.
Based on available statistics, Monsod said mining’s average contribution to GDP from 2000-2009 was only a mere .91 percent, though this grew in 2010 to 1.30 percent.
As for job generation, the industry’s average share to total employment from 2000-2009 was a mere 0.376 percent and 0.5 percent in 2010.
Neither, he said, has mining done much for the country’s exports sector.
The average contribution of metallic mining to total exports in 2000-2009 was just 2.96 percent and 3.7 percent in 2010; while mining’s average share of investments to total investments is only 2.5 percent.
Monsod also pointed out that from 1997 to 2010, government revenues from mining in taxes, fees and royalties was a mere total of P64.2 billion although total production value of mining companies for in the same period totaled P842 billion.
Does not reduce poverty
Contrary to claims of mining proponents and defenders, the mining industry has not reduced poverty but actually contributed to it, Monsod said.
“Figures derived from FIES (Family Income and Expenditure Survey) 1988-2009 (show that) mining has the highest poverty incidence at 48.7 percent of any sector in the country. It is the only sector where poverty incidence increased between 1988-2009,” Monsod said.
The same survey placed the highest poverty levels in regions that host large mining operations such as Caraga with 47.5 percent, Zamboanga Peninsula (42.75 percent) and Bicol (44.92 percent).
At the municipality level, (small area poverty estimates 2003), Bataraza in Palawan, where Rio Tuba has been operating for 30 years, has a poverty incidence (53 percent) double the national rate (26 percent), he added.
“The mining industry is correct in saying that the figures do not establish causality. But they do show an association between mining and poverty that at least raises questions on the claim that mining substantially improves life in their communities,” he said.
Dr. Romulo Virola, who resigned recently as secretary general of the National Statistics Coordination Board, said that among the mineral commodities, gold accounts for the biggest share to total mining, contributing, at constant prices, an average of 30.7 percent form 1998-2010.
Virola said that there were 10 companies in the country that produced gold as of 2010 -- six primary producers and four secondary.
He also said the Philippines’ potential gold resource/reserves, as of 2010, were estimated at 4.914 billion metric tons, with the biggest reserves found in Region 12, accounting for 44.4 percent of total reserves, followed by the Cordillera Administtative Region and Region 11.
The highest quality of gold reserves is in Region 8, hitting an average grade of 11.4 grams Au/MT.
Yet, for all its gold reserves, Region 12’s poverty level continues on a downward spiral.
The NSCB report said the poverty situation in Region 12 “worsened between the period 2006 and 2009. Poverty incidence in the region, or the proportion of families with per capita income falling below the poverty line, was estimated at 28.1 percent in 2009. This was 1.0 percentage point higher than the 27.1 percent poverty incidence in 2006.”
NSCB also said: “The said data set also showed that the per capita poverty threshold in the region, or the amount needed by a person to satisfy his food and other basic needs annually, was estimated at P15,762 in 2009 or about P1,314 monthly. This would mean that in 2009, a family of five in the region needed a monthly income of P6,570 or P78,840 annually to provide for the family's basic food and non-food needs to stay out of poverty.”
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