Gov’t braces for gold rush

Anticipating a gold rush, environment officials are warning against the proliferation of illegal and dangerous mining as investors flee to the relative safety of the metal amid the continuing financial volatility in the United States and Europe.

The country’s mining areas have become attractive to gold hunters, who want to take advantage of the rising price of gold, the Department of Environment and Natural Resources (DENR) said.

“There is talk that gold is expected to hit $2,000 per ounce in December. I will agree that there is a possibility of a gold rush. Gold is the safest commodity right now,” said Environment Secretary Ramon Paje.

Paje said the global economy was encouraging the gold rush.

In these uncertain times, when developed countries are either declaring bankruptcies or on the verge of it, investors look for safe havens for their investments. Gold is seen as a stable and safe investment compared with currencies and other commodities.

Gold hit a record high of $1,900 in August, when the United States government was formulating a way out of its debt crisis.

Abandoned sites

Environment officials said there were reports of locals rushing to abandoned mines to pan for gold.

Paje noted that gold mines in Compostela Valley, the Agusan provinces, Masbate, Cagayan Valley and Nueva Vizcaya were getting plenty of interest.

About 70 percent of gold in the country is produced by the small-scale mining industry, the DENR said.

Leo Jasareno, chief of the Mines and Geosciences Bureau (MGB), said based on field observations and complaints, “there have been increasing incidents of both legal and illegal small-scale gold mining.”

“The tailings used to be considered just waste. But some of it still has little gold so they are interested about that, too,” Jasareno said.

King of metals

Gold remains the king of Philippine metals in terms of value, if not volume, according to the MGB.

“In terms of percent contribution to the metallic production value, the gold subsector remains the king over the other metals accounting for 66.13 percent of the total or P42.18 billion,” the MGB said in its first semester report issued on Monday.

“The stellar showing was stimulated by the awe-inspiring price growths of the yellow metal on the international market,” it said.

Overall, the country’s mineral sector grew significantly in the first half of 2011, the MGB said.

Production value of the metal sector rose to P63.92 billion in the first semester from P48.73 billion in the same period last year.

31-percent growth

The 31-percent growth was prompted by the steady improvement of metal prices on the world market together with the increased mine outputs of gold, silver, copper, nickel and zinc producers in the country, the MGB said.

The bureau said it forecast to see gold and silver to reach new highs in the second half of the year.

“Gold and silver, being precious metals, are forecast to perform very well, playing up their role to the fullest as safe haven for investment,” it said.

The DENR also expects the country’s mineral sector to continue its growth as investors raise production to take advantage of the high prices.

“We have to handle our natural resources well. I’m not saying that we are happy about the financial crisis, but clearly we have an advantage,” Paje said.

As the global market’s hunger for gold continues, environment officials express fear that people will risk their lives while looking for the metal.

Conflicts, pollution

There is also the sentiment that the gold rush would generate a host of problems, ranging from land conflicts to environmental degradation.

Jasareno said residents near potential and existing gold mines were using pollutive and unsafe methods in their search for ores. They are exposed to harmful chemicals and use polluted compressor air when they scrounge riverbeds for gold.

Environment officials said the increased interest in the country’s minerals would be a “challenge” to local and national governments.

Neric Acosta, presidential adviser on the environment, said illegal small-scale mining could proliferate. “This is a challenge for regulation. This is a challenge for enforcement,” he said.

Local and national executives, Acosta said, should sit down to discuss how to regulate small-scale mining.

Paje agreed: “We are calling on the local governments to be vigilant in granting permits.”

Local governments have the power to unilaterally approve small-scale mining permits. The DENR wants to change this rule, noting that small-scale mining should be under the jurisdiction of Republic Act No. 7076.

New mining areas

An environment group said the attractive prices of metals could push the government to be more aggressive in opening new mining areas.

“The Aquino administration continues to offer vast areas of mineral lands in the country to foreign and private corporations. These include gold-rich areas of small-scale mining communities in Zamboanga del Norte, Compostela Valley, Davao del Norte, Camarines Norte, Masbate and Benguet,” said Clemente Bautista Jr., convenor of Defend Patrimony alliance.

Mining concessions currently cover around 1.5 million hectares.