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Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: an Economic Analysis

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Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: an Economic Analysis A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Orbeta, Aniceto C.; Israel, Danilo C.; Asirot, Jasminda Working Paper Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: An Economic Analysis PIDS Discussion Paper Series, No. 2000-06 Provided in Cooperation with: Philippine Institute for Development Studies (PIDS), Philippines Suggested Citation: Orbeta, Aniceto C.; Israel, Danilo C.; Asirot, Jasminda (2000) : Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: An Economic Analysis, PIDS Discussion Paper Series, No. 2000-06, Philippine Institute for Development Studies (PIDS), Makati City This Version is available at: http://hdl.handle.net/10419/127712 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Philippine Institute for Development Studies Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: An Economic Analysis Danilo C. Israel and Jasminda P. Asirot DISCUSSION PAPER SERIES NO. 2000-06 The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are be- ing circulated in a limited number of cop- ies only for purposes of soliciting com- ments and suggestions for further refine- ments. The studies under the Series are unedited and unreviewed. The views and opinions expressed are those of the author(s) and do not neces- sarily reflect those of the Institute. Not for quotation without permission from the author(s) and the Institute. March 2000 For comments, suggestions or further inquiries please contact: The Research Information Staff, Philippine Institute for Development Studies 3rd Floor, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines Tel Nos: 8924059 and 8935705; Fax No: 8939589; E-mail: [email protected] Or visit our website at http://www.pids.gov.ph ABSTRACT The study reviewed small-scale gold mining in the Philippines and economically assessed mercury pollution and other development problems in the industry. The end purpose was to suggest measures to address the problems and promote better environmental and overall management of small-scale mining. The study used secondary data from mining institutions and primary data from key informants and small-scale gold miners and processors in the two case study sites. Mercury Pollution Due to Small-Scale Gold Mining in the Philippines: An Economic Analysis* by Danilo C. Israel and Jasminda P. Asirot** I. Introduction Small-scale gold mining is an activity that relies heavily on manual labor and uses simple implements and methods. Although it is a humble form of livelihood, it contributes significantly to gold production and rural employment in the Philippines. While, economically significant, however, small-scale gold mining has been the target of strong opposition in recent years mainly because of its various adverse environmental and social side-effects. Foremost of these is mercury pollution. II. Brief Review of Literature Numerous foreign studies already investigated the problem of mercury pollution due to small-scale gold mining, particularly concentrating on the experience in Brazil (e.g. Veiga 1997a and 1997b, Akagi et al. 1995, Aula et al. 1995, Malm et al. 1995, Porvari 1995, Barbosa et al. 1995, Guimaraes et al. 1995, Veiga et al. 1995, Veiga and Meech 1995). High levels of mercury concentrations were found in the hair and blood samples of the miners and other affected people as well as in fish, soil sediments and forest and river ecosystems in small-scale gold mining areas of the Amazon region. In the Philippines, several studies also looked into mercury pollution based on the experience in Diwalwal, the largest small-scale mining site in the country (e.g. Mahinay et al. 1998, Bacani et al. 1996, Breward 1996, Balce and Cabalda 1992, Williams et al. 1995). High levels of mercury pollution were found on-site as well as in the affected places downstream. Williams et al. specifically asserted that mercury loads in some sectors of the Agusan river, where Diwalwal drains into, were already considerable and that the water samples from the mining site * This study has been funded by the Economy and Environment Program for Southeast Asia (EEPSEA) and the World Bank (WB). The assistance provided by Dr. David Glover, EEPSEA Director, and by Dr. Gary Mcmahon, WB consultant, is highly appreciated. ** Senior Research Fellow of the Philippine Institute for Development Studies (PIDS) and research assistant, respectively. Additional research assistance was provided by William T. Bayona and Edralin Q. Bayona, also of PIDS. itself showed higher concentrations than those in the other gold rush areas in the world. Although studies on the impact of mercury pollution due to small-scale mining were already numerous, they were generally technical in nature. Few works touched on the economic aspects of the problem and did so only in a superficial and summary manner. So far, there is no available study that conducted an economic analysis in a more detailed and quantitative way in the Philippines or elsewhere. III. Objectives and Data The main objective of this study is to review small-scale gold mining in the Philippines and quantitatively assess, to the extent possible, the economic cost of mercury pollution. As a corollary goal, the study discusses the other environmental and development problems associated to the activity. The end purpose is to suggest measures to address the problems and promote better management of small-scale mining. The study uses both secondary and primary data. The secondary sources of data were the Mines and Geosciences Bureau (MGB), World Bureau of Metal Statistics, National Statistical Coordination Board (NSCB) and the existing research literature on small-scale mining. The sources of primary data were the key informants, local government units (LGUs), and the small-scale gold miners and processors in the two case study sites who were covered by a brief survey conducted for the study. IV. Review of Small-Scale Gold Mining in the Philippines 4.1 World and Philippine Gold Production The world production of gold has been growing over the years (Table 1). Volume increased from about 1.2 thousand metric tons in 1980 to 2.3 thousand metric tons in 1997. The top world producers of gold for the 1980-1997 period were South Africa which contributed 34.54 percent to the total production on average annually, USSR which added 14.39 percent, and the US which registered 11.07 percent. 2 Table 1. World annual gold production, by country, 1980 -1997 (in Metric Tons) Year South USSR United Philippines Others Total Africa States 1997 493 237 338 33 1,166 2,266 1996 495 214 312 30 1,080 2,130 1995 522 213 313 27 1,021 2,097 1994 584 229 326 27 974 2,140 1993 620 236 331 25 914 2,125 1992 609 226 330 26 935 2,125 1991 601 220 294 26 905 2,046 1990 601 302 295 25 864 2,086 1989 606 304 201 30 718 1,858 1988 619 278 201 30 664 1,792 1987 602 260 155 33 552 1,602 1986 638 273 116 35 477 1,540 1985 671 272 76 33 430 1,481 1984 680 269 63 26 382 1,420 1983 680 268 61 25 359 1,392 1982 664 266 46 26 330 1,331 1981 656 262 43 24 272 1,256 1980 672 258 30 20 207 1,188 Average 612 255 196 28 680 1,771 Percent 34.54 14.39 11.07 1.57 38.43 100.00 Note: Data for USSR for the years 1992-1997 were only for Russia, Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikstan, Ukraine and Uzbekistan. Sources: World Bureau of Metal Statistics (January 1987 - December 1998) and Mines and Geo-Sciences Bureau (1980-1997) 3 Following the international trend, the production of gold in the Philippines has been increasing over time also (Table 1). Volume rose from about 20 metric tons in 1980 to 33 metric tons in 1997. The local production was only a small percentage of world production, however. On average yearly, the gold output of the country was only 1.57 percent of the world production for the 1980- 1997 period. While local production was low relative to world production, gold was the number one mineral produced by the Philippines in value terms (Table 2). From 1980 to 1997, gold contributed an annual average of 32.54 percent to the total value of mineral production, followed by copper concentrate, sand and gravel, salt, and coal which share 25.98 percent, 13.28 percent, 9.05 percent and 4.71 percent, respectively. Philippine exports of gold have been growing over the years, in volume and value terms (Table 3). Volume increased from about 12.7 metric tons in 1980 to 15.7 metric tons in 1997. FOB value rose from about P1.78 billion in 1980 to P5.0 billion in 1997.
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