Masbate to impose taxes on small-scale mining

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Filminera plant emits polluted gas. PHOTO BY BICOLTODAY.COM
Filminera plant emits polluted gas. PHOTO BY BICOLTODAY.COM

LEGAZPI CITY, July 11 (PNA) -– The provincial government of Masbate is finding ways to collect taxes from the thousands of small-scale miners feasting for free on the rich mineral resources of the island province.

In a statement reaching here Wednesday, Masbate Governor Rizalina Seachon-Lanete said she had already requested the provincial legislative board to review the province’s revenue code to determine the taxes that should be imposed upon operators and financiers of these mining activities.

The governor said there are about 20,000 individuals who are engaged in the venture particularly in Aroroy, the municipality considered as one of the richest in the country in terms of mineral resources that include gold, copper, silver, iron, manganese and chromite.

At present, some of these miners whose projects are recognized as legal could only be charged by the local government with a meager sum for the processing of their temporary small-scale mining permits. She said that the rest, which is greater in number and whose operations are considered illegal, pay nothing.

Small-scale mining for gold and manganese in the island, Lanete said, is an over a billion-peso a year industry.

“We are a province rich in mineral, particularly gold and yet we are one of the poorest in the country in terms of local economy. That makes us look like an old man sitting on a pot of gold,” Lanete lamented.

This time, she said the provincial government will be taking advantage of this natural wealth to generate local revenue to uplift the economic condition of the province and deliver basic services so that their constituents can fully participate in economic activities.

Part of the measure that the province will be instituting is the legalization of all local small-scale mining operations under the jurisdiction and monitoring of the provincial government.

The large scale mining operations under the control of the national government are the Masbate Gold Project (MGP) of the Australian-owned Filminera Resources Corporation (FRC) and the Philippine Gold Processing and Refining Corporation (PGPRC) that covers a 13,000-hectare of gold-rich upland property in Aroroy.

In 2010, the MGP produced some 141,000 ounces (4,000 kilograms) of gold and about 113,000 ounces (3,200 kgs) of silver for a total gross production gain of P6.9 billion.

In a steady state, the project is forecast to produce some 200,000 ounces in average yearly gold output over the first eight years of the mine’s life.

A report of the MGB said MGP yielded a total of 2,770.921 kilograms of gold valued at over P5.6 billion and some 2,166 kilograms of silver at around P105.4 million for a gross production worth P5.7 billion during the first half of 2011.

The company enjoys many attractive incentives from the Philippine government including an initial six year income tax holiday. The excise tax rate is 2 percent on gross revenue.

It is also in the process of acquiring another gold-rich property covering an area of 78 hectares located north of its existing pit even as the company already had more than 18 kilometers of exploration tenement.

From these developments, the province expects nothing for its coffer that could be treated as “blessings” except that economic activities in the area also expands, Lanete said.

“So, we turn to the small miners, the mining sector left for the provincial government to impose upon its authority and tax them,” she added. [PNA]

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