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Overview
• Geological Setting
– Located within the Pacific Rim of Fire, the Philippine archipelago is hypothesized as having been
formed 43 million years ago. Its 7,109 islands rest on top of underwater mountains formed by the
outpourings of molten rocks from the earth's interior, thus creating an ideal setting for mineral
deposition. (After Wolfe, J.A., "Origin of the Philippines by Accumulation of Allochthons" in The
Philippine Geologist July- September 1983 Issue, p.17)
– In the archipelago, resurgent volcanoes particularly provided access for rising gold-bearing solutions
which cool to the geotherm of 300 degrees Celsius at about 400 m depth. At this point, the gold
began to precipitate and epithermal gold deposits were formed over geologic time of 1.5 million
years from the present time. (After Wolfe, J. A., in International Mineral Development Sourcebook,
1993)
Mineral Prospects
• The London-based 1991 Annual Mining Review, Mining Journal featured the countrys mineral wealth. Based
on how much a mining company can mine in a one square kilometer land area, the Philippines ranked 2nd
in gold worldwide; 3rd in copper; and 6th in chromite. (After Corpuz, Catalino in Christian Aid & PIPLinks
[2004] report). Its write-up on the country s gold prospect confirmed the findings of a UNDP study in 1984
that ranked the Philippines second to South Africa in terms of gold endowment per square kilometer
(BMG/UNDP/UNDTCD Project Document PHI/85/001).
• In 1997, a technical report the United Nations Industrial Development Organization (UNIDO) cited the
strategic economic value of the gold ore at Mt. Diwalwal as one that is still easily accessible and that
contains the gold metal in concentration from 25 up to 100 grams per ton, approximately 25-50 times more
than the famous gold ore from the Witwatersrand Basin in the Republic of South Africa (UNIDO Project
Document XX/PHI/97/XXX).
• While gold deposits are found throughout the country, they are concentrated in the five (5) recognized gold
mining districts: 1) Baguio gold district; 2) Paracale gold district; 3) Masbate gold district; 4) Surigao gold
district; and 5) Masara (Davao) gold district.
• The Mines and Geo-Sciences Bureau in 1986 placed the country’s gold ore estimated reserves at
2,108,260,000 metric tons that have an average grade of 2.4 gm Au/Mt.
• The gold metal recovered from the gold ore reserves would be about 162.6 million troy oz (5.2 million tons).
Estimated value of the yellow metal is $73.4 billion.
• Usually associated with those of gold, silver deposits have an average silver to gold ratio of 2:1 based on
ore assays and production figures of Philippine primary gold mines.
• The silver metal recovered from the above gold ore reserves would be about 325.3 million troy oz (10.4
million tons). Estimated worth of this precious metal is $2.4 billion.
• Copper deposits are also widely distributed throughout the country, and most copper deposits contain
variable amounts of gold and silver. Thus, the countrys copper mines have been contributing a substantial
portion of the overall Philippine gold production.
• Estimated reserves of the copper ore in 1996 amounted to 4,052,087,000 metric tons that have an average
grade of 0.4% Cu. Assessed value of the base metal stands at $55.7 billion.
• Chromite deposits occur along the eastern and western belts of the archipelago, and in northern
Mindanao. Also known as iron chromium oxide, chromite is the most important chromium ore.
• In 1986, chromite reserves measured 91,576,000 metric tons and their grades range from 21.3% Cr to 43.5
% Cr. Assessed worth of the metal is pegged at $1.4 billion.
• Nickel deposits, mainly in the form of nickeliferous laterite, also occur along the eastern and western
margins of the archipelago and in northeastern Mindanao. In the 1970s, the country was believed to have
the biggest nickel reserves in the world.
• In 1986, nickel reserves totaled 1,569,870,000 metric tons with an average grade of 1.1% Ni. With an
estimated value of $229.3 billion, this makes nickel theoretically the countrys top ranking metallic mineral
resource.
• In 1997, a survey of major mining firms operating in the Asia-Pacific ranked the Philippines (despite its
relatively small land area) second only to Indonesia in terms ofgeological prospectivity. It should be noted
that Indonesia’s total land area measures about 1,919,400 sq km, while that of the Philippines is only
300,000 sq km (or 30 million hectares). Geologists at the Mines and Geosciences Bureau estimate that the
potential minerals (e.g. copper, gold, chromite and nickel) onshore cover an area of about 90,000 sq km (or
9 million ha).
• The survey ‘s accompanying mineral development forecast was that for the period 1995-2015, the
Philippines would develop a minimum number of 11 new deposits and a maximum of 30 new deposits. Its
bottomline however was that, in all probability, at least one new mine per year would be developed for an
end-total of 20 new mines. Out of that probable total number, 11 mines would be medium- to large- scale
epithermal gold deposits, while five mines would be copper-gold deposits. The remaining four mines would
be either chromium or nickel mineral finds. (After Clark, Allen L. in Globalizing Philippine Mining [2002]
IBON)
• According to the Director of the Mines and Geosciences Bureau, the new major gold deposits are:
• Bulawan (Negros Occidental) with 12 million tons (under Philex Mines);
• King-King (Davao) with 20 million tons (under Benguet Corp/TVI/Echo Bay); and
• Longos (Paracale, Camarines Norte) with 1.6 million tons (under United Paragon).
• Bulawan under Philex Mining began gold production in 1996 as the first large-scale gold mine
developed since the passage of the Mining Act. Longos contains the highest grade of 11.1 gm
Au/Mt.
• The new major copper-gold deposits are:
• Didipio (Nueva Vizcaya/Quirino) with 106 million tons (under Climax-Arimco);
• Dizon Extension (Zambales/Pampanga) with 365 million tons (under Dizon Mines, Inc.); and
• Far Southeast (Benguet) with 314 million tons (under Lepanto/CRA-RTZ).
• The Philippine Mining Act of 1995 and its Revised Implementing Rules and Regulations (RIRR) is
considered in the industry today as one of the most socially and environmentally-sensitive legislations in its
class. It has specific provisions that take into consideration:
• • Local government empowerment;
• • Respect and concern for the indigenous cultural communities;
• • Equitable sharing of benefits of natural wealth;
• Economic demands of present generation while providing the necessary foundation for future
generations;
• • Worldwide trend towards globalization; and
• • Protection for and wise management of the environment.
• These were the products of long periods of assessment, evaluation, and rectification of the sins of the past,
the gaps of the old mining law, and the realities of the present times.
GOVERNING PRINCIPLES
• The Implementing Rules and Regulations (DENR Administrative Order No.96-40) of the Philippine Mining
Act of 1995 provides strict adherence to the principle of SUSTAINABLE DEVELOPMENT. This strategy
mandates that the needs of the present should be met without compromising the ability of the future
generations to meet their own needs, with the view of improving the quality of life, both now and in the
future.
• Sustainable development provides that the use of mineral wealth shall be pro-people and pro-environment in
sustaining wealth creation and improve quality of life.
ORGANIZATIONAL IMPLEMENTATION
• The Mining Act reverts back the Mines and Geosciences Bureau (MGB) from a Staff to a Line Bureau.
Under this arrangement, the MGB Central Office has now the administrative jurisdiction and responsibility
over its regional offices. The Line Bureau structure was contemplated to ensure organizational efficiency
and flexibility in managing limited resources and technical expertise.
The following areas may be opened for mining operations, the approval of which are subject to the following
conditions:
• Military and other government reservations, upon prior written consent by the government agency having
jurisdiction over such areas;
• Areas near or under public or private buildings, cemeteries, and archaeological and historic sites, bridges,
highways, waterways, railroads, reservoirs, dams and other infrastructure projects, public or private works,
including plantations or valuable crops, upon written consent of the concerned government agency or private
entity, subject to technical evaluation and validation by the MGB;
• Areas covered by FTAA applications, which shall be opened, for quarry resources upon written consent of
the FTAA applicants/contractors. However, mining applications for sand and gravel shall require no such
consent;
• DENR Project areas upon prior consent from the concerned agency.
• ANCESTRAL LANDS AND ICC AREAS
The Mining Act fully recognizes the rights of the Indigenous Peoples (IPs)/Indigenous Cultural Communities (ICCs)
and respect their ancestral lands. Thus, in accordance with DENR Administrative Order No. 2, and consistent with
the new Indigenous Peoples Rights Act (IPRA), the following shall be observed:
• No mineral agreements, FTAA and mining permits shall be granted in ancestral lands/domains except with
prior informed consent in: a) CADC/CLC areas; and b) areas verified by the DENR Regional Office and/or
appropriate offices as actually occupied by Indigenous Cultural Communities under a claim of time
immemorial possession;
• Where written consent is granted by the ICCs, a royalty payment shall be negotiated which shall not be less
than
• 1% of the Gross Output of the mining operations in the area. This Royalty shall form part of a Trust Fund for
socio- economic well being of the ICCs in accordance with the management plan formulated by the ICCs in
the CADC/CALC area. (In a large-scale mining operation the 1-% Royalty could easily run into several tens
of million pesos per year).
• Representation in the Multi-partite Monitoring Committee;
ON SOCIAL ACCEPTABILITY
• Mining contractors/operators shall allocate a minimum of 1% of their direct mining and milling costs for the
development of the following:
– Host and neighboring communities and mine camp to promote the general welfare of inhabitants in
the area. This includes construction and maintenance of infrastructures such as roads and bridges,
school buildings, housing and recreational facilities, water and power supplies, etc.;
– Mining technology and geosciences, particularly those related to improved efficiencies and
environmental protection and rehabilitation.