The value of Philippine metallic mineral production dropped by almost a fifth in the first nine months of this year, because of the suspension of several mines and significant decline in gold

purchases by the Bangko Sentral ng Pilipinas (BSP), the Mines and Geosciences Bureau (MGB) said recently.

In an interview, MGB Director Leo Jasareno said that the country’s metallic mineral production value dropped by 18.85 percent to P79.52 billion in January to September 2012, from P97.99 billion a year ago—attributed to the 94-percent decline in the gold purchases by the BSP.

It will be recalled that the decline in 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 (CWT) from the sale of gold by small-scale miners and traders, pursuant to Revenue Regulations No. 7-2008 dated March 25, 2008.

The tax collection scheme was superseded by Revenue Regulations No. 6-2012, which reduced the CWT from 10 percent to 5 percent effective April 2012.

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.

Jasareno said that the substantial drop in the gold purchases of BSP from small-scale miners and
traders was a telling factor for the sluggish performance.

The value of BSP gold purchases from small-scale miners fell by 94 percent in the first nine months of the year to P2 billion from P32.71 billion in the same period last year. The volume of gold purchases likewise fell by 94 percent to 945 kilograms from 16,724 kilograms.

Total gold production has dropped 54 percent to 12,369 kilograms of gold in January to September 2012, as compared to 26,976 kilograms a year ago; while the value of gold production fell by 50 percent to P27 billion from P53.66 billion.
Gold contributed 34 percent to the total production value.

Jasareno also attributed the lower metals production to the suspension of the copper-gold mine in Padcal, Benguet following the massive tailings spill; the Nonoc Island Nickel project because of unsettled obligations to the government of Shuley Mine Inc; and the magnetite operations of Nicua Corp. because of environmental violations.  

In terms of contribution to the total mineral production value, nickel outperformed other metals with a 47-percent contribution with a production value of P37.36 billion.

Jasareno said that nickel production was boosted by the approval of operations the nickel mines of Pilipinas Mining Corp. in Zambales, and Oriental Vision Mining Corp. in Dinagat.

Copper, which comprises 16 percent of the total production value, dropped to P12.51 billion from the previous P14.14 billion. 

Other metals such as silver, chromite, zinc and iron comprised 3 percent of the total production value placed at P2.64 billion for the period.