DENR sounds alarm over gold smuggling
Written by : JAMES KONSTANTIN GALVEZ
The Department of Environment and Natural Resources (DENR) over the weekend asked the help of the Presidential Anti-organized Crime Task Force to stop the massive smuggling of gold in the country.
Environment Secretary Ramon Paje made the appeal following the report of the Mines and Geosciences Bureau (MGB) showing a 38-percent drop in total Philippine metallic mineral production value during the first quarter of 2012.
In January to March 2012, the country’s metallic mineral production value reached P19.61 billion, lower by 38 percent from the P31.40 billion recorded a year ago.
Paje said that the sluggish performance of metallic minerals during the first quarter was largely from the 92-percent plunge in the gold purchases of the Bangko Sentral Ng Pilipinas (BSP) from small-scale miners and traders.
From 7,493 kilograms of gold purchased in the same period last year valued at P14.11 billion, BSP’s gold purchase went down to a dismal 618 kilograms worth P1.35 Billion in January to March 2012.
The DENR chief added that the downfall of gold purchases started during the second semester of 2011 when the Bureau of Internal Revenue (BIR) strictly imposed the collection of the 2-percent excise tax and 10-percent creditable withholding tax from the sale of gold by small-scale miners and traders pursuant to Revenue Regulations 7-2008 dated March 25, 2008.
The BSP, through its five buying stations in Baguio City, Davao City, Zamboanga City, Naga City and Quezon City deducts the corresponding taxes from small-scale miners/traders and remit the same to the BIR.
Paje stressed that 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 means that gold outputs are going to the black market and smuggling activities.
As a consequence, total gold output plummeted by 65 percent and 57 percent in volume and value, respectively, from 11,427 kilograms valued at P21.63 billion, to 4,056 kilograms valued at P9.33 billion year-on-year.
Besides gold, both silver and chromite also suffered deficits in mine output. Copper, zinc, nickel and iron, on the other hand, enjoyed growths during the same period.
The country’s production stream includes 19 nickel mines; six gold mines with silver as co-product; three copper mines with gold and silver as co-products; a polymetallic mine with gold, silver, copper and zinc as products; two chromite mines; a nickel plant; and several small-scale gold mining operations.
In terms of prices, gold and silver continued to enjoy better prices in the first quarter of 2012. Prices of the yellow and white metals were up by 21.95 percent and 2.68 percent, respectively.
Yellow metal traded above the $1,600 per troy ounce level, the highest of which was $1,743 per troy ounce recorded in February 2012. It is projected that gold will most probably continue to be strong in 2012 as the global economy has not yet fully recovered from the worldwide financial crisis.
Thus, the role of gold, including silver, as safe haven for investment in times of economic difficulties will still very much come into play.
MGB Director Leo Jasareno disclosed that gold production in the second quarter of 2012 is expected to increase, with the entry of the country’s 33rd metallic mine, the Siana Gold Project of Greenstone Resources in Surigao del Norte.
Jasareno also reported that the entry of the following new producers will also most likely boost the mine output of nickel, chromite and iron in 2012: Casiguran Nickel Project of Century Peak Corp. in Dinagat Islands; Sta. Cruz Candelaria Nickel Project of Eramen Minerals Inc. in Zambales; HY Nickel-Chromite Project of Sinosteel Phils. HY Mining Corp. in Dinagat Islands; Elluvial Chromite Mining and Concentration Project of Mt. Sinai Mining Exploration and Development Corp. in Eastern Samar; and Leyte Iron Sand Project of Strong Built Mining Development Corp. in Leyte.
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