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Philippines: the Artisanal Mining Sector During the COVID-19 Pandemic

By Shyne Catedral, Michelle Manza, and Abigail Ocate - April 13, 2020

Posted in: Categories COVID-19 Tagged as: Tags ASGM, Philippines

 

During a crisis, the people who are hit the hardest are those on the bottom rungs of the ladder, the ones with existing vulnerabilities that are compounded by the new disaster.

Women miners working at a processing plant in Itogon, Benguet | CREDIT: AGC Philippines.

Millions of artisanal and small-scale gold miners around the world are entirely dependent on the gold they sell every day to support their families. The outbreak of COVID-19, however, has disrupted the artisanal gold supply chain and broken the cash for gold income system that rural miners depend on. Miners are either receiving far less for their gold than the pre-COVID-19 times, or they are not able to sell their gold at all. This rupture has led to millions of vulnerable miners being short on cash just at the time they may need it most. The scenario is unfolding in most artisanal gold mining communities globally, and the Philippines’ are no exception.

With an estimated 300,000-500,000 miners operating in more than thirty provinces across the country2, the Philippines is one of the more significant artisanal gold producers worldwide. According to the official records of the Philippines Central Bank, artisanal producers in 2018 generated just under US$14 million worth of gold, or about 350kg. Given that many artisanal producers in the Philippines work informally, the real figure is certainly much higher. In total in 2018, the  Philippines generated 36.8 tons of gold1, worth about $1.5 billion at world prices. With the advent of COVID-19, the 2020 production figures are likely to drop sharply, and the selling price already has dropped significantly, so miners and their families are already seeing an income cut.

As of April 12, a total of 4,648 confirmed COVID-19 cases were reported in the Philippines, including 247 deaths. In its efforts to flatten the infection curve, the Philippines government on March 16 placed the island of Luzon – the largest of the Philippines’ many islands and home to the capital, Manila – under Enhanced Community Quarantine (ECQ).  Luzon’s more than 60 million residents were restricted from travelling in or out of their local regions. Outside of Luzon residents of many more cities are following orders to stay inside the house. The Enhanced Community Quarentine (ECG) is scheduled to run until April 30.

A broken gold supply chain leaves artisanal mining communities with no lifeline

Despite the order from both national and local governments for residents to stay at home, many small-scale miners are continuing to produce gold. However, they are severely constrained by the lack of access to markets and buyers, by a lack of processing supplies, and by a limited workforce, as miners who live beyond area boundaries have not been allowed to return after the lockdown was announced.

“We don’t have money for food,” said Meriam, the wife of a small-scale miner near Baguio, north of Manila. “We are dependent on our relatives since the relief goods from our barangay [district] are not enough. The gold buyers are buying gold at low prices since other major traders are closed.”

As of April 8, 24-karat gold was being bought at anywhere from $32 per gram to $50 per gram, averaging at about 16% lower than its local price prior to the enforcement of the enhanced quarantine. The recently declared extension of the quarantine – for twenty-two more days and possibly longer – could well mean further declining prices.

A balance scale with locally produced artisanal gold in Itogon, Benguet | CREDIT: AGC Philippines.

In a mining community in Itogon, northern Luzon, miners have found themselves with very reduced access to gold buyers, who under normal circumstances, operate in nearby cities that are now subject to quarantine. Public transportation has been suspended and strict enforcement checkpoints have been put in place. Gold production in the Itogon area has been suspended. Better off miners – financiers and tunnel owners – have resorted to selling gold they stashed prior to the quarantine order.  Subsistence level miners, the vast majority, now have no source of income to meet their daily needs.

On the island of Mindanao, where there are limited confirmed cases of COVID-19, the Banco Sentral ng Philippines (BSP) gold buying station in Davao City is still open and has been operating on regular working days with skeletal staff. However, there are have been no gold sales there since the quarantine order took effect. Miners may be selling their gold to traders within their local areas.

Fortunately for the miners who still possess some cash, the price and supply of food has remained stable. In Agusan del Sur in the north of Mindanao, an artisanal miner’s organization has been providing food to miners and their families from those that also participate in agricultural businesses. Informal workers, however, are now the most vulnerable to the impacts of the coronavirus as they have no income safety net and are therefore forced to consider working just to feed their families. This includes many part-time workers, most of them women, who also lack social protection and therefore have no cash for their health and quarantine needs.

Based on telephone interviews by the AGC Philippines team, miners are increasingly experiencing the economic impacts of the lockdown. They are feeling pressured to sell any gold they may have accumulated as savings at low prices in order to prepare for the uncertainties arising during this pandemic.

According to the President of Agusan Del Sur Small-Scale Miners Federation Panfilo Dobluis, “The buyer buys the gold cheap, but traders may price it higher once they buy it. The miners are suffering while some local buyers are the only one’s profiting.”

Protecting Artisanal Mining during the COVID-19 pandemic: Solutions and Suggestions

An artisanal gold miner in a tunnel at Itogon, Benguet | CREDIT: AGC, Philippines.

Considering these issues, some measures can still be taken to reduce the impacts of COVID-19 on artisanal and small-scale mining communities. The general shape of a solution that can be effective is as follows: Create a short-to-medium term financing mechanism that would constitute an emergency buying fund, bringing liquidity to seized up artisanal gold buying markets. The Philippines buying house infrastructure that was active and successful 10 years ago could perhaps be brought back to life as part of this solution.

This kind of  backstop to the artisanal gold market would provide needed  resiliency now in present moment of uncertainty and illiquidity, and could serve as an important feature to install for the future of Philippines’ artisanal gold supply chains. Measures that would secure the livelihood of mining communities in the short term crisis, with the goal of increasing access to global markets on the longer term would serve the dual purposes of supporting needs now, and creating an incentive for informal miners to convert their operations to formal ones in the medium term future. An action now may also prevent regress in the progress made with artisanal gold mining over the last decade – progress that generally is aimed at achieving the UN’s  Sustainable Development Goals.

Other steps that can be taken in the immediate term include:

  1. Development of a quick artisanal and small-scale mining Family Health and Economic Vulnerability Mapping Survey (ASGM FHEVMS) to identify the actual needs of small-scale gold miners. This will collect important information on livelihoods, health conditions, and populations considered at risk of severe illness.
  2. Provision of immediate assistance utilizing the well-established and existing artisanal gold supply chains and trading relationships, elements such as: a) relief goods; b) health assistance g., personal protective equipment; c) other needs based on the Health Survey (see point 1)
  3. Accelerated implementation of the MGB-issued memorandum5 and guidelines6 to realign the Social Development and Management Program (SDMP) funds of large-scale mining companies to support affected host and neighboring communities due to COVID-19. This fund is currently underutilized and so could immediately be accessed with little new financing to helps artisanal gold mining communities that are often found in areas where there are large-scale mining operations.

The AGC in the Philippines: planetGOLD and Minamata National Action Plan

The AGC has been present working on artisanal mining issues in the Philippines since 2011, and is also a proud participant in the country’s planetGOLD programme. PlanetGOLD is an innovative programme that aims to improve the lives of artisanal and small-scale gold miners by focussing on four core areas: technical solutions, access to finance, formalisation, and knowledge creation/awareness raising.  Here is what planetGOLD is doing already about COVID-19.

Contributions and editing by Kevin Telmer, Shawn Blore and Rébar Jaff

 

Shyne S. Catedral is the Artisanal Gold Council’s communications assistant with the planetGold Programme in the Philippines.

The planetGOLD Philippines project is implemented by the UN Environment Programme, UN Industrial Development Organization (UNIDO), Department of Environment and Natural Resources (DENR), and executed by the Artisanal Gold Council (AGC) in partnership with the Mines and Geosciences Bureau (MGB).

Visit planetgold.org/philippines to learn more and sign up for updates

 

Sources:

  1. World Gold Council. (2020). Interactive Gold Mining Map. Retrieved 8 April 2020 at http://www.gold.org/gold-mining/where-gold-mining-occurs/interactive-gold-mining-map
  2. Seccatore, J., Veiga, M., Origliasso, C., Marin, T. & De Tomi, G. (2014). An estimation of the artisanal small-scale production of gold in the world. Science of the Total Environment, 496, p. 662-667.
  3. DENR Mines and Geosciences Bureau (2019). Mining Industry Statistics. Retrieved 8 April 2020 at http://www.mgb.gov.ph/attachments/article/162/MIS(2018)%20Annual%203Yr-2016%20to%201st%20to%203rd%20Qtr%202019%20for%20UPload%204Dec2019.pdf
  4. Philippine Extractive Industry Transparency Initiative. (2018). Fifth Country Report. Retrieved 10 November 2019 at http://ph-eiti.dof.gov.ph/uploads/1/2/1/8/121891939/5th_ph-eiti_report_-_updated.pdf
  5. DENR Mines and Geosciences Bureau (2020). Memorandum dated 27 March 2020. Retrieved 8 April 2020 at http://www.mgb.gov.ph/images/Covid_Advisories/SDMP_Realignment_MGB_RO_final.pdf
  6. DENR Mines and Geosciences Bureau (2020). Memorandum dated 1 April 2020. Retrieved 8 April 2020 at http://www.mgb.gov.ph/images/Covid_Advisories/Guidelines_on_SDMP_Realignment_MGB_RO_final.pdf
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