Mining never reduced poverty: UP economist

http://www.sunstar.com.ph/static/gen/2007/12/10/bus/mining.never.reduced.poverty.up.economist.html
Monday, December 10, 2007

KORONADAL CITY--Large-scale mining ventures have not reduced poverty incidence in host municipalities, an economic expert said here.

Speaking at a forum dubbed as "Cost Benefit Analysis of Mining" last Tuesday, Arturo Boquiren, assistant professor of economics at the University of Philippines-Baguio, stressed such point using the Benguet experience as model, where large scale mining activities have been ongoing for nearly 100 years.

The corporate or large-scale mining companies operating in the Benguet towns of Mangkayan, Itogon and Tuba are Lepanto Mining, Benguet Consolidated and Philex Mines. They are exploiting copper and gold deposits.

Boquiren said that large-scale mining projects need not be an option for municipalities and cities to have a higher growth path.

"Non-mining areas perform just as "good" as mining areas and, thus, communities or local government units that want their cities or municipalities to take-off and take a higher growth path need not embrace large-scale mining," he said.

He noted that there are environment-friendly alternatives that local government units rich in mineral deposits can explore, such as farming, to have a higher growth path.

Stressing that the objective of his study is to value Benguet's biodiversity and execute a benefit-cost analysis of mining, Boquiren said the net benefits flowing from Benguet biodiversity on an annual basis are at least $591.6 million.

The total value of net benefits over 25 years amount to $14.8 billion with a net present value of $5.9 billion using a discount rate of 12 percent and P51.785 to a dollar, he added.

"On the other hand, large scale mining can result to a very large net or social economic loss. Given an annual revenue of P6.9 billion, the net social or economic loss can be as much as P92.7 billion per annum, or as much as P1.16 trillion if all the Benguet metals are extracted in one scoop," Boquiren said.

Comparing mining and non-mining communities in Benguet, Mr. Boquiren said poverty incidence for the former was pegged at 35.87 percent involving a population of 119,573 (2000 census) while for the latter was 22.11 percent involving a population of 462,942 population.

"If corporate or large-scale mining is indeed good for Benguet municipalities, then poverty incidence should be very low in the corporate mining towns of Mankayan, Tuba and Itogon. After all, large scale mining has been in Mankayan for at least 71 years, 49 years in Tuba and around 91 years in Itogon," Boquiren said.

He also claimed that mortality due to cancer in the three large-scale mining areas is high at 38.97 percent although the towns are only 32.63 percent of the Benguet population.

"Jointly, the three municipalities where large-scale mining is present have a mortality rate due to cancer of 44.29 percent per 100,000 population. In contrast the rest of the 10 towns in Benguet have a combined mortality rate due to cancer of only 33.59 percent per 100,000 population," Boquiren explained.

But the economic expert clarified that a conclusive study is still needed to validate if mining activities indeed caused higher cancer rates to the three towns.