Small-Scale Gold Mining and the Mercury Problem
Most of the Philippines' gold is dug in places that never show up in the statistics. Small-scale gold mining (ASGM: Artisanal and Small-Scale Gold Mining) is said to involve some 500,000 workers, yet only a small fraction of mining areas are formally registered, and most of the gold produced flows not to the central bank but into the informal market. Mercury amalgamation is still in active use today. The Philippines ratified the Minamata Convention in 2020, and mercury use is fully banned under domestic law, yet seizures of smuggled mercury continue even into 2026. The 2025–2026 surge in gold prices (US$4,400–4,600 per troy ounce as of August 2026) is further accelerating this dynamic.
1. 注 First, distinguish what kind of number you're looking at
This field has the awkward property that "wildly different orders of magnitude can both be correct for the same country at the same time." Before reading further, keep the following distinctions in mind.
| Concept to distinguish | Meaning | Representative Philippine figure |
|---|---|---|
| Reserves | The amount confirmed to be economically minable. Depends on the standard applied | PSA's "Class A reserves" for gold: 371,260 kg (2025, Philippine Statistics Authority PSA Mineral Accounts) |
| Resources | Shown to exist but economic viability is not yet established. Always larger than reserves | Disclosed mine-by-mine under JORC/NI 43-101 (below) |
| Endowment/potential | A geological "there's probably gold here" estimate, outside any reporting standard | MGB's "roughly 9 million ha of high mineralization potential area," etc. |
| Central bank gold reserves | Bullion in the vault, not gold in the ground | 133.51 tonnes (Q1 2026, BSP, via Trading Economics) |
| Annual production | The amount actually mined | 2024: 28,870 kg (MGB) |
注 The English phrase "gold reserves" can refer to either "reserves in the ground" or "bullion held by the central bank." Japanese-language articles that conflate the two are extremely common.
Differences in reporting standards
| Standard | Nature | How it is used in the Philippines |
|---|---|---|
| JORC Code (Australia) / NI 43-101 (Canada) | Disclosure standards for listed companies, requiring sign-off by a Competent/Qualified Person, with mandatory disclosure of the gold-price assumption and cut-off grade | Used by OceanaGold's Didipio Mine and B2Gold's Masbate Gold Project |
| Philippine Mineral Reporting Code (PMRC 2020) | The Philippine equivalent of the above, used for PSE (Philippine Stock Exchange) disclosures | OceanaGold Philippines disclosed a revised PMRC 2020-based mine plan to the PSE in March 2026 (extending mine life to 2037, assuming a gold price of US$2,200/oz) |
| UNFC-2009 → PSA's Mineral Accounts | A UN classification. Class A = commercially recoverable, B = potential, C = non-commercial. Only Class A is given a monetary valuation | PSA's "Mineral Accounts of the Philippines" (based on SEEA-CF 2012, using a 10.0% discount rate) |
| Government estimates / industry claims | Outside any reporting standard; figures that cannot be reproduced | Claims such as "US$1.8 billion worth of gold buried in Diwalwal" |
注 The claim that "the Philippines is the world's 2nd-largest gold reserve holder" is not substantiated. Rappler's fact-check finds that, measured by central bank gold holdings, the Philippines ranks around 26th in the world (157.06 tonnes as of Q4 2022, versus the United States' 8,133.46 tonnes / World Gold Council, IMF), and concludes the claim does not hold up. The most likely original source is a qualified statement in the Mines and Geosciences Bureau (MGB)'s own promotional material, claiming Philippines "3rd in the world for gold deposit density per unit area" — it appears the qualifier "per unit area" was dropped along the way, turning the claim into one about absolute rank. This material does not adopt the "world's 2nd-largest" claim.
2. The scale of ASGM — "70%" and "1%" are both correct
| Item | Figure | Year/source |
|---|---|---|
| Small-scale gold mining workers | approximately 500,000 | planetGOLD Philippines (GEF-funded; implemented by UNEP/UNIDO) |
| People indirectly dependent on it for their livelihood | Approx. 2 million | Same as above |
| Provinces with ASGM activity | 40+ of 82 provinces | Same as above (NCSSMPI/BAN Toxics put it at "30+ provinces"). (Corrected during the 2026-08-25 cross-check review from "of 81 provinces" to "of 82 provinces." The 17 September 2022 division of Maguindanao raised the province count from 81 to 82. Source replaced 2026-08-26: PSA, "Q3 2022 PSGC Update — Including the Split of Maguindanao Province," records that "under RA 11550, ratified by plebiscite held 17 September 2022, Maguindanao province was split into Maguindanao del Norte and Maguindanao del Sur," which raised the nationwide province count from 81 to 82. Also citing the original text of RA 11550 (lawphil.net) and COMELEC's plebiscite-related resolution (Resolution No. 10816, among others, archived at comelec.gov.ph). Where original text still shows 81, that is the pre-split value.) |
| ASGM's share of domestic gold output | 70% (planetGOLD) / approx. 75% (NCSSMPI, 2025–2026) | planetGOLD / National Coalition of Small-Scale Miners of the Philippines (NCSSMPI), April 2026 |
| Separate estimate of workers | 200,000–300,000 | BSP-related reporting |
| ASGM gold captured in official statistics | fell to 1.26% of recorded gold output (₱600 million) in 2019 | World Gold Council, "Central Bank Domestic ASGM Purchase Programmes" |
The "70%" and "1.26%" are not contradictory. The former is an estimate of the amount actually mined; the latter is the amount officially recorded through the central bank (BSP). In other words, the entire difference disappears into informal circulation.
注 The 500,000 figure is a planetGOLD estimate from around 2019, not a real-time measurement as of 2025–2026. Industry groups, NGOs, and UN agencies have repeated this figure over and over, but no primary national census could be confirmed.
Reference: official statistics from the large-scale mining side (MGB)
| Period | Gold output | Production value | Notes |
|---|---|---|---|
| 2024 | 28,870 kg | ₱126.36 billion | Gold overtook nickel as the top commodity |
| Jan–Sep 2025 | 20,500 kg (−5.3%) | ₱117.42 billion (+28.9%) | Volume down, value up |
| Q1 2026 | 5,850 kg (−24.7%) | ₱53.78 billion (+31.2%) | Gold accounts for 65% of metallic mineral production value |
Volume down, value up — this is the basic pattern of the gold sector in 2025–2026. The largest gold producer is the Masbate Gold Project (Filminera Mining/Philippine Gold Processing & Refining), which produced 1,646 kg in Q1 2026.
3. Legal framework — RA 7076 and Minahang Bayan
Underlying law and key administrative orders
| Law | Year | Key points |
|---|---|---|
| PD 1899 | 1984 | The former small-scale mining law. The Department of Justice interprets it as effectively superseded by RA 7076 |
| RA 7076 (People's Small-Scale Mining Act) | 1991 | The foundational small-scale mining law. Created the Minahang Bayan (People's Small-Scale Mining Area) designation system. Ore output capped at 50,000 tonnes per year, contract areas capped at 20 ha. Gold produced must be sold to the BSP |
| EO 79 | 2012 | A comprehensive review of mining policy. Bans mercury use in mineral processing |
| DAO 2015-03 (revised IRR of RA 7076) | 2015 | A full ban on mercury, a ban on compressor mining (underwater diving mining) and hydraulicking. Limits small-scale mining to gold, silver, and chromite as the only permitted metals. Processing restricted to centralized custom mills within a Minahang Bayan |
| DAO 2022-03 (the current revised IRR) | Took effect 29 April 2022 | Replaces DAO 2015-03. Streamlined the Minahang Bayan designation process (PMRB application → MGB regional office → MGB central office → DENR Secretary clearance → PMRB declaration following ECC submission) |
| RA 11256 | 2019 | Exempts registered small-scale miners and accredited traders who sell gold to the BSP from income tax and excise tax (discussed further below) |
注 Being designated a Minahang Bayan alone does not authorize mining. As MGB-CAR has explicitly stated, mining can begin only after DENR issues a Small-Scale Mining Contract under Section 11 of RA 7076. "Designation" is not the same as "legalization."
Progress and dysfunction of the designation process
| Indicator | Figure | Year/source |
|---|---|---|
| Approved Minahang Bayan applications | 53, with 224 pending | As of 2022 / Altermidya, Rappler (October 2023 reporting) |
| Declared Minahang Bayan | 63, with 209 pending | Separate reporting (timing unspecified, unconfirmed) |
| Cordillera Administrative Region (CAR) | 15 (as of November 2025) | MGB-CAR |
| Davao Region | DENR clearance obtained for 5 sites (339 ha total); 9 more at the regional-declaration-only, pending stage | MGB, PIA (2025) |
| Small-scale mining reality in Benguet province | Roughly 8,000 sites, roughly 30,000 workers | Benguet Provincial Environment Office |
This contrast is the crux of the problem. Benguet province alone has some 8,000 operations, while the entire country has only a few dozen formal Minahang Bayan sites. "Small-scale mining = almost entirely unregistered/informal" has become the effective default.
Recent developments in 2025: - 5 November 2025: the Kalinga province PMRB declared 161.25 ha in the Banao Bodong Tribal Association (BBTAI) area of Tanudan town, Kalinga, as a Minahang Bayan (DENR Secretary clearance dated 18 August 2025) — the 15th such site within CAR. - May 2025: the Benguet province PMRB declared 31.25 ha in Camp 4, Tuba town, for the Benguet Federation of Small-Scale Miners.
注 Reviews stall on the political calendar. The resignation of Environment Secretary Maria Antonia Yulo-Loyzaga on 22 May 2025, and the transition to Secretary Raphael Lotilla, is reported to have stalled review of the 9 pending Davao Region applications.
Legislative moves in 2025–2026
- House Bill 5840, the "Minahang Bayan Act" (filed under the TUCP party list): a comprehensive amendment to RA 7076. It would simplify licensing, grant regional mining regulatory boards the authority to declare and manage Minahang Bayan zones, mandate consultation with indigenous peoples and local communities, and strengthen enforcement of safety laws and the ban on hazardous methods such as mercury use. 注 The filing date is reported inconsistently — "November 2024" versus "November 2025" — and remains unconfirmed.
- House Bill 9311 (Representative Eric G. Yap): would replace Section 4 of RA 7076 and amend Section 8 (registration/licensing).
- An earlier precursor was HB 6408 (November 2022, Deputy Speaker Mendoza / TUCP).
- 26–28 April 2026: the 7th General Assembly of the NCSSMPI (National Coalition of Small-Scale Miners of the Philippines) was held in Sagada, Mountain Province. 59 organizations and over 200 people attended, calling for passage of HB 5840. The president is Josephine Balonga. The coalition argued that "RA 7076 no longer fits the present situation and has been an obstacle to formalization." Its secretariat is the NGO BAN Toxics.
- At the same assembly, the Compassionate Gold Project (funded by the Danish NGO Diálogos) launched for Benguet and Mountain provinces.
4. Major production sites
Diwalwal (Mount Diwata, Monkayo town, Davao de Oro province)
| Matter | Content |
|---|---|
| Discovery | September 1983: an Indigenous Lumad man, Camilo Banad, discovered gold in a stream on Mount Diwata (some sources say 1982) |
| Gold rush | The population swelled to roughly 125,000 within three years, drawing in army deserters, former rebels, and even firearms smugglers |
| Name | The official designation is Barangay Mount Diwata. "Diwalwal" is Cebuano slang meaning "tongue hanging out from exhaustion." "Diwata" means spirit/goddess |
| Area | The Diwalwal Mineral Reservation Area (DMRA) covers 8,100 ha (Monkayo town plus Boston and Cateel, Davao Oriental province), of which the small-scale mining area is 729 ha (DENR AO 66) |
| Workers | Roughly 30,000, many operating informally |
| "Remaining reserves" | Figures such as 注"US$1.8 billion worth" or "2.7 million ounces of high-grade ore" are repeatedly cited, but these are local-government/press-based estimates that do not follow reporting standards such as JORC/NI 43-101, and cannot be classified as either reserves or resources |
Contamination: ore is crushed in ball mills, amalgamated with mercury, then heated with an open-air blowtorch. The Naboc River (a tributary of the Agusan River) has been severely contaminated with mercury and cyanide. A UK-led survey (Appleton et al., 2006, Science of the Total Environment) found mud in the Naboc River exceeding 90 mg-Hg/kg, and an average of 24 mg-Hg/kg in irrigated paddy soils — both exceeding UK/Canadian agricultural-land standards, the Dutch intervention value, and USEPA screening values. Corn and banana fields that had not been irrigated measured a normal 0.05–0.99 mg/kg. Roughly 600 farming households in the downstream Naboc communal irrigation area were affected.
Government action: - In 2019, DENR ordered the closure of 1,797 CIP (carbon-in-pulp) plants and ball mills in the gold rush area. - On 4 July 2025, President Marcos signed Executive Order No. 88 (EO 88), reorganizing and strengthening the National Task Force Diwalwal, with the DENR Secretary as its new chair. The reasoning cited was that unlicensed mining had resumed within the DMRA, with at least two rivers reportedly contaminated with sodium cyanide. - On 18 January 2024, a landslide in Diwalwal killed 11 people (including 7 members of one family). Landslides in 2005–2007 had also killed roughly 50 people.
注 A common mix-up: the 6 February 2024 landslide in Masara, Maco town, Davao de Oro, that killed over 98 people, occurred not in Diwalwal but in a separate disaster near the large-scale Apex Mining concession.
Paracale (Camarines Norte province) — "Goldtown"
- The place name comes from "para cale," meaning "one who digs a channel." Gold has been mined here since before Spanish colonization, and the community traded with Chinese merchants.
- In 1571–1572, Juan de Salcedo visited Mambulao and Paracale after hearing of gold there. A major ore body near the town was confirmed in 1626. Records from 1688 show miners' wages of 3 reales per week, plus meals.
- The Paracale gold deposit is considered the oldest in the Philippines, with over 3 million ounces of cumulative gold production before 1939. Dredging and hydraulic mining arrived in the 1930s, when the town was known as "the richest town in the Philippines."
- Today mining activity is spread across all 27 barangays. ASGM in Camarines Norte province supports the livelihood of roughly 11,000 households (ILO).
- Contamination studies: a 2025 sediment/tailings study (Journal of Degraded and Mining Lands Management) found mercury and arsenic to be the most serious contaminants, ranking highest on both the geo-accumulation index and the potential ecological risk index. A 2022 study (Environ Sci Pollut Res) found atmospheric mercury of 6.1–25.8 ng/m³ on the east coast (versus 1.4–9.9 ng/m³ on the west coast), and total mercury in forest soil of 0.496±0.439 mg/kg on the east side, versus 0.081±0.028 mg/kg on the west.
- The town holds an annual Pabirik Festival celebrating its gold mining history, and has a mini museum devoted to the Paracale gold mines.
Itogon (Benguet province)
- According to the provincial environment office, the province has roughly 8,000 small-scale mining operations and roughly 30,000 workers. Many operate within the Benguet Corporation's concession, working in old tunnels the company has abandoned — a structural reason why they cannot establish their own Minahang Bayan.
- On 15 January 2019, CAR's first Minahang Bayan was opened in Loacan, Itogon town, and the region's first small-scale mining contract was signed between the government and the Loacan Itogon Pocket Miners Association (LIPMA), on a site within the Benguet Corporation's concession.
- Recent accidents:
- 27 November 2025: a landslide caused by prolonged rain hit Acupan Camp 1. Initially 30–40 people were believed buried, but it was later determined that more than 130 people had been underground, and all were safe.
- 30 December 2025: two miners, aged 18 and 33, were found dead in a private tunnel at Sitio Acupan "Camp 1000." No signs of trauma were found; gas poisoning is suspected.
The 2018 Itogon landslide (Typhoon Ompong/Mangkhut)
Around 1pm, 15 September 2018 Heavy rain from Typhoon Ompong (international name Mangkhut)
Sitio Fastgate, Barangay Ucab, Itogon town
A small-scale miners' bunkhouse, "Level 070" (two connected concrete houses),
buried by a debris flow
Roughly 2 ha collapsed
Rainfall 14 September: 250.2mm; 15 September: 535.6mm (PAGASA)
(far exceeding the 10mm/24hr threshold generally taken as a warning sign
for ground collapse)
Deaths 69 as of 22 September → 78 as of 25 September (50 of them at Level 070)
Final toll: 87 dead, 12 missing (29 September 2018 / DILG-CAR)
Victims' origin According to the Governor of Ifugao province, 80–90% of the dead/missing
were migrant miners from Ifugao province
Aftermath On 17 September, Environment Secretary Roy Cimatu ordered a halt to
small-scale mining in Itogon and all of CAR, and revoked all mining permits
A "National Task Force Mining Challenge" was set up, closing 539 mine
entrances within two days
注 DENR itself concluded that "the landslide was not caused by mining activity." MGB-CAR Director Fay Apil explained that there was no mining operation at the point of collapse, and that an extreme rainfall event coincided with an inherently dangerous terrain of shear zones and steep slopes. Nonetheless, DENR ordered a review of all Minahang Bayan applications and a halt to small-scale mining across Benguet province. 注 This suspension order was not easily lifted. As of 2022, a Benguet-elected legislator was still at the stage of promising miners to bring up "lifting the moratorium" with the new environmental authorities. "Disaster → blanket suspension → formalization does not progress → informal mining returns" is the typical outcome cycle in this sector.
Surigao/Caraga Region
- The Caraga Region is known as "the nickel capital of Asia," but informal small-scale gold mining and sales into the black market are also widespread there.
- 8 November 2025: a joint operation by the NBI Regional Office 13, MGB, and the military raided an illegal gold mine reportedly operated by Chinese nationals in Santiago town, Agusan del Norte province, seizing heavy machinery and arresting unregistered Chinese operators (注this material identifies the spokesperson as "MGB Caraga Regional Director Engr. Larry Eradez," but field material "Gold Reserves and Deposits," Chapter 10, and "Rare Earths and Strategic Minerals," §4-1, identify a person of the same name, Larry Heradez, as MGB Director (head of the central bureau) — a discrepancy in title that remains unconfirmed, including whether these are even the same person; original-source verification is needed. Noted during the 2026-08-25 cross-check review). On 1 October 2025, immigration authorities separately arrested 4 Chinese nationals working without visas in Agusan del Sur province.
- In Barobo town, Surigao del Sur province, Mayor Ronnie Martizano testified in October 2025 that he had received death threats for opposing illegal riverbank mining using heavy machinery. He said three stop-work orders issued by Governor Johnny Pimentel had been ignored.
- Near the Parangparang water source in Surigao City, it has been reported that gold buyers are supplying mercury-containing chemicals to illegal miners, prompting concern from the local water utility.
- A common theme in 2025–2026 Caraga-region reporting is that the shift from hand-panning for alluvial gold to mechanized mining using heavy equipment has blurred the line between "subsistence mining" and "illegal commercial mining."
5. Mercury — amalgamation and health harm
The method
Ore is crushed in a ball mill → metallic mercury is added, forming an amalgam with the gold → the amalgam is heated outdoors with an open-flame blowtorch, vaporizing the mercury and leaving the gold behind. This final step releases mercury vapor directly into the breathing zone. 注 Whole ore amalgamation, together with outdoor/residential-area roasting, is precisely the practice that the Minamata Convention, in Article 7 and Annex C, requires countries to "eliminate."
Volume of use and contamination
| Indicator | Figure | Source |
|---|---|---|
| Estimated annual ASGM mercury emission/release | 113 tonnes/year | 2008 / DENR (using the UNEP Toolkit) |
| Mercury used per gram of gold | average 19.2g (range 1.5–149.0g) | Mercury flow-analysis study (PMUG journal, 2018) |
| Monthly mercury use per operator | 20–40 kg | 2025 / DENR-EMB-commissioned mercury material-flow survey conducted by BAN Toxics |
| Overall status | ASGM is the Philippines' largest source of mercury emissions | planetGOLD / Minamata Initial Assessment, 2019 |
注 The 2025 material-flow survey found that mercury use in ASGM "greatly exceeds official import statistics." In other words, the gap is entering the country through smuggling. Since the Philippines has no mercury mines of its own and domestic law and regulation are already fully in place (per Jam Lorenzo of BAN Toxics), the issue is not one of legislation but of enforcement at the border and in distribution.
Health impacts — handling "Minamata-like symptoms" with care
- Drasch et al. (2001), "The Mt. Diwata study on the Philippines 1999" (Science of the Total Environment): a representative study comparing residents near the Diwalwal/Monkayo mining area with a control group in Davao City, using interviews, neurological examination, and neuropsychological testing.
- 注 This study found no significant elevation in total hair mercury among residents near the Monkayo mining area compared with the Davao City control group. Using hair mercury alone as an indicator can miss exposure.
- Reporting on a late-1990s UK-led survey states that up to 38% of residents of the Naboc River basin were found to have "mercury poisoning." 注 The diagnostic criteria and peer-review status behind this "38%" figure are unconfirmed in this material.
- 注 Equating the Diwalwal case with "Minamata disease" is not accurate. The acute phase of Minamata and Niigata disease involved extremely high-concentration methylmercury exposure (one Niigata case had hair mercury of 390 ppm), whereas Diwalwal is primarily characterized by occupational exposure to metallic mercury vapor combined with chronic low-to-moderate exposure via contaminated rice and fish. That said, follow-up studies in the Minamata area have also found neurological symptoms such as glove-and-stocking sensory disturbance occurring at high rates even at hair mercury levels below 10 ppm, so "low hair mercury" does not mean "no health impact" either.
- In Caraga, a 2025 study of mangrove clams (Polymesoda erosa) and sediment in Butuan Bay at the mouth of the Agusan River found sediment mercury of 4.45±0.64 mg/kg — roughly 89 times the average upper-crustal background level.
6. The Minamata Convention and the Philippines
| Timing | Matter |
|---|---|
| 10 October 2013 | The Convention was adopted in Kumamoto. The Philippines signed on the day of adoption |
| January 2016–September 2019 | DENR-EMB carried out a "Minamata Initial Assessment (MIA)," updating the national mercury inventory using the UNEP Toolkit |
| 16 August 2017 | The Convention entered into force |
| 8 July 2020 | The Philippines ratified the Convention (the 123rd party) |
| June 2024 | Convention Executive Secretary Monika Stankiewicz visited the Philippines, touring a mercury trade workshop and a mercury-free ASGM site |
| 3–7 November 2025 | COP-6 (Geneva). Over 1,000 people attended in person, and 22 decisions were adopted |
| 2027 | COP-7. IPEN is seeking to place on the agenda a convention amendment to "phase out permitted mercury use in ASGM by 2032" |
The results of COP-6 — no deadline was set for ASGM
- COP-6's headline outcome was "a phase-out of dental amalgam use by 2034," but no mercury phase-out deadline was adopted for ASGM.
- What was adopted regarding ASGM included confirmation of the importance of providing alternative livelihoods to vulnerable mining communities, draft interim guidance on the effective participation of indigenous peoples and local communities in national ASGM action plans (NAPs), and a roadmap for synergies with the Kunming-Montreal Global Biodiversity Framework.
- The Philippines' BAN Toxics held repeated consultations with NCSSMPI ahead of COP-6 (October 2025), calling for adoption of "a phase-out deadline consistent with a rights-based, just transition framework," but this was not realized. IPEN assessed that "the Mercury Convention failed to respond to the crisis in gold mining."
The current state of domestic implementation
- An ASGM National Action Plan (NAP, under Article 7 of the Convention) has been developed with Swiss government funding and UNIDO support.
- Mercury use has already been fully banned under EO 79 (2012) and DAO 2015-03/2022-03. It continues to be used anyway.
- 9 July 2025 (the 5th anniversary of ratification): BAN Toxics reported having flagged 23 listings selling liquid mercury on Facebook Marketplace, with listings also found on Lazada and Shopee. Mercury can also be readily bought at ordinary hardware stores and gold-buying shops near mining sites.
- On 21 April 2026, Indonesian authorities in Jakarta seized approximately 760 bottles of liquid mercury hidden inside rolls of carpet, destined for Davao City. This was disclosed at a press conference by the Jakarta Metropolitan Police on 13 May, and on 2 June a joint statement welcoming the seizure was issued by Nexus3 Foundation, CRPG Indonesia, BAN Toxics, IDIS, and the EcoWaste Coalition.
- BAN Toxics' Arleen Honrade explains that mercury continues to be used because "there isn't enough government support for mercury-free alternative technology." An estimated 75% of the ASGM population is engaged in subsistence mining, barely earning enough for daily food — a poverty structure underlying the whole issue.
7. Mercury-free technologies
注A note on the name "Borneo method"
注 As far as this research could determine, no mercury-free technology called the "Borneo method" appears in Philippine-related primary sources (unconfirmed). Two actual technologies exist and are likely being confused with one another.
| Technology | Content |
|---|---|
| The Borax method / Gravity-Borax Method (GBM) | Originated not in "Borneo" but in Benguet province, Philippines. Ore is crushed → passed over a sluice (lined with felt) to capture heavy minerals → panned to a concentrate → mixed with borax and melted with a blowtorch, lowering the melting point so the gold settles out. Small-scale Benguet miners developed this method independently more than 30 years ago, and it is said to have been adopted by roughly 20,000 people in the region. Danish geologist Peter W.U. Appel and Leoncio Na-Oy reported it in the Journal of Health & Pollution in 2012, and this "Philippine-born technology" was subsequently transferred to Indonesian Borneo (Kalimantan) and elsewhere. This direction of transfer is believed to be the origin of the "Borneo method" misnomer |
| MFPS (Mercury-Free Processing System) | A facility-based system installed by planetGOLD. Combines gravity concentration (spiral concentrators, centrifugal concentrators, shaking tables) with leaching using a cyanide-amino acid mixture. Tailings are detoxified with sodium metabisulfite |
The economics and limits of the borax method
- Cost: according to Na-Oy, recovering 1 kg of gold requires 400g of borax (about ₱40/kg). The equivalent amount of mercury would cost roughly ₱30,000.
- Recovery rate: in comparative trials conducted in Uganda, the amalgamation method recovered 1.0g of pure gold in 53 minutes (using 4g of mercury), while the Philippine method recovered 1.4g (+40%) in 62 minutes — only 9 minutes longer.
- 注 It is not a universal solution. It does not work on ore where free gold is not visible to the naked eye, and ore where gold is encapsulated in iron sulfide requires pre-roasting. This is why adoption has not spread much beyond Benguet.
- In 2014, BAN Toxics set up a gravity-and-borax demonstration facility in Diwalwal, and miners from Compostela Valley traveled to Benguet to observe.
planetGOLD Philippines (2019–2025)
| Item | Content |
|---|---|
| Framework | GEF-funded, implemented by UNEP/UNIDO, executed by AGC Philippines, in partnership with DENR/MGB |
| Duration | A 5-year project (effectively 6) starting in 2019. Closing ceremony held 1 July 2025; the project itself concluded in September 2025 |
| Pilot sites | Sagada (Mountain Province) and Paracale (Camarines Norte province) |
| MFPS-1 (Paracale) | Processing capacity of roughly 3.5 tonnes/day, gold recovery rate of 80%+ |
| MFPS (Sagada) | Processing capacity of 3–4 tonnes/day, target recovery rate of 60%+. Handed over to the Northern Sagada Barangay Small-Scale Miners Association |
| Improvement in recovery rate | From 20–40% under amalgamation, to 80% (per MGB engineer Bernardo Vitangol). Equipment investment is projected to pay back within 3 years |
| Formalization | Approximately 600 miners had obtained legal status by the end of 2024 |
| Safety | 48 people in northern Sagada completed a 5-day mine rescue and safety training course |
| Design information | Project manager Abigail Ocate has said that "information is available from MGB — it's all open-source" |
注 There has also been criticism. Miners have complained that "the processing facilities are too far from the mining sites to be economically viable," and BAN Toxics' Honrade has argued that "it would have been more effective to invest in reagent-free technology and stop mercury from flowing into the country." There is also a gap because only legally operating miners can use the facilities, while the majority remain unregistered.
8. Compressor mining, occupational accidents, and child labor
Compressor mining (underwater diving mining)
- A shoulder-width wooden vertical shaft is dug into coastal or riverine mud, with the miner breathing through a thin tube fed by a diesel compressor on the surface, diving for hours at a time to dig. Depths can reach 10m or more.
- Risks include drowning, decompression sickness (the bends), and bacterial skin infections. In Paracale, a severely itchy skin condition known as "romborombo" has been reported. If the compressor stops, the result is immediately life-threatening.
- Human Rights Watch (HRW) states that it has "not documented this practice in any other country," suggesting it is a uniquely Philippine phenomenon.
- In March 2015, the government banned compressor mining (DAO 2015-03 explicitly states that "hydraulicking or compressor mining shall not be resorted to at any stage within a small-scale mining contract area"). Some barangays had already independently banned it earlier. 注 Even after the ban, the practice has only declined, not disappeared — in Camarines Norte it remains a significant source of livelihood.
Child labor
| Source | Content |
|---|---|
| ILO (2011 estimate) | 19,000 children working across 45 ASGM sites, engaged underground or on the surface in gold recovery, ore transport, and processing. 注 The ILO's ASGM child labor page (as of its December 2024 version) still cites this same 2011 estimate, and no updated 2024–2025 figure could be confirmed |
| HRW report (30 September 2015, launched in Manila) | "'What... if Something Went Wrong?': Hazardous Child Labor in Small-Scale Gold Mining in the Philippines," 39 pages total. Field research conducted in 2014–2015 in Camarines Norte and Masbate provinces, with over 135 people interviewed, including 65 child miners aged 9–17. Children as young as 9 were documented |
| Nature of the danger | Unstable shafts up to 25m (80 feet) deep, underwater diving mining, mercury-based gold processing. In September 2014, two brothers (aged 17 and 31) died in a shaft near Malaya, Labo town, Camarines Norte province |
| HRW's assessment | "The Philippine government prohibits hazardous child labor by law, but enforcement is barely happening" (Juliane Kippenberg) |
| Domestic Philippine NGO survey | 14% of children living in mining areas are engaged in mining, mostly aged 11–17 |
| ILO CARING Gold Mining Project | Funded by the US Department of Labor (USDOL). Focused on Labo and Paracale towns in Camarines Norte province, and Tboli town in South Cotabato province. Supports formalization of Minahang Bayan, piloting the ethical gold brand "Compassionate Gold" in Tboli |
| 注 | A 2017 government program initially freed the children of Malaya from labor, but many returned to hazardous work during the COVID-19 pandemic |
9. Gold smuggling and informal circulation — a structure invisible in the statistics
How the system is built
Under RA 7076, the BSP (Bangko Sentral ng Pilipinas) is the only institution authorized to buy and export gold from small-scale miners, and small-scale miners are obligated to sell their gold to the BSP. The BSP refines the gold it purchases into a form usable on the international bullion market and incorporates it into foreign exchange reserves.
The 2011 tax change and the "collapse"
| Year | Event |
|---|---|
| 1997→2011 | The value of small-scale gold sold to the BSP increased from ₱4.5 billion to ₱34.6 billion |
| 2011 | A 2% excise tax plus a 5% withholding tax, for a combined 7%, began to apply. BSP purchases dropped to almost zero (a 99% decline) |
| 2019 | Official ASGM gold fell to just 1.26% of recorded gold production (₱600 million/about US$12 million) |
| March 2019 | RA 11256 (the Foreign Currency Reserve Enhancement Act) was enacted, exempting registered small-scale miners' and accredited traders' sales to the BSP from income tax and excise tax |
| 2020 | BSP purchases surged roughly tenfold, to 115,800 troy ounces (from 10,207 troy ounces in 2019) |
Why the black market still wins
| Issue | Content |
|---|---|
| Physical distance | The BSP has only 5 buying stations (Quezon City, Baguio City, Davao City, Naga City, Zamboanga City), against dozens of declared Minahang Bayan and over 200 pending applications |
| Procedural cost | A processing fee of ₱1,600, plus a 1% retention fee. Miner testimony: "what should take a few hours ties you up for one to two full days" |
| Immediate cash | Miner testimony: "the black market pays less, but it's far more convenient — you get cash on the spot" |
| Registration requirement | Miners operating illegally cannot sell to the BSP in the first place. The system spins its wheels for as long as formalization does not advance |
Estimates of the scale of leakage (all are estimates with a wide margin)
- Of roughly US$3.9 billion in Philippine gold production in 2021, small-scale mining accounted for approximately US$2.7 billion. Legal sales through the BSP amounted to only around US$27 million (1%) (Altermidya/Rappler, October 2023 reporting).
- In the northern Luzon region, roughly 90% is reported to go to the black market (per comments from the BSP's northern Luzon regional office director). In Benguet province, at least 40% is not sold to the BSP but instead goes to local jewelers or abroad.
- Past Reuters reporting has put the figure for smuggled small-scale gold as high as 90% shipped abroad, with China as the primary destination.
- Some estimates suggest the BSP is capturing less than 5% of small-scale gold output.
- 注 These figures come from different years and different methodologies, and cannot simply be compared side by side.
System-side responses (2024–2026)
- February–December 2024: the BSP designated PJ Lhuillier Inc. as an accredited trader under a regulatory sandbox, authorizing it to purchase from registered small-scale miners in Tboli (South Cotabato), Paracale (Camarines Norte), Itogon (Benguet), and Sagada (Mountain Province).
- From January 2025, PJ Lhuillier's Auro Resources Trading Inc. took over as the accredited trader, expanding purchases through the nationwide Cebuana Lhuillier branch network. It is said to be the first BSP-accredited gold trader to implement a supply-chain provenance tracking system.
- 注 These schemes apply only to legally operating miners — the underlying problem, that most operations remain informal, persists.
- For reference: on the large-scale side, OceanaGold Philippines sold approximately 6,684 ounces of gold doré to the BSP in 2025, exceeding the minimum commitment of 25%. 注The often-cited "roughly 31% of annual production" is a ratio against gold doré output specifically; against Didipio's total 2025 gold production of 90,700 ounces, it amounts to only 7.4% (the remainder is exported as gold contained in copper concentrate). Confusing this with total gold production leads to an order-of-magnitude error (corrected during the 2026-08-25 cross-check review — the previous text had flatly stated "31% of annual gold production." Source: field material "Major Gold Mines and Production," Chapter 2 / "Mining and Nickel," Chapter 6).
10. What the 2025–2026 gold price surge has changed
| Indicator | Figure | Timing/source |
|---|---|---|
| Gold price | US$4,472/oz (8/20) → US$4,587/oz (8/21) | August 2026 / Fortune |
| Year-on-year | Up US$1,130 as of 20 August | Same as above |
| In peso terms | 2026 average of ₱283,790/oz, high of ₱318,644 (1/28), low of ₱247,825 (6/10). 24-karat gold reached roughly ₱9,133/gram in late August | 2026 / exchange-rates.org, policybazaar |
| Forecasts | Goldman Sachs' 2026 outlook of US$4,900; Bank of America's US$5,000 (average forecast US$4,600) | October 2025 |
The impact of the price surge is showing up not in "volume" but in "value" and "entry pressure."
- Official gold output is falling even as its value rises (Q1 2026: volume −24.7%, value +31.2% / MGB). Problems of declining ore grade and mine-life at existing operations are not solved by price alone.
- Only the "value" of reserves has jumped. In PSA's Mineral Accounts, the value of Class A gold reserves swelled 41.6% year-on-year to ₱308.79 billion in 2025, even as the physical volume of Class A gold reserves fell 5% to 371,260 kg, and production fell 3% to 19,550 kg. Combined Class A reserves of gold, copper, nickel, and chromite reached ₱588.12 billion (+17.6%), with gold overtaking nickel as the most valuable mineral asset. 注 A headline reading "mineral resources grew 17%" reflects a price increase, not an increase in resources.
- Entry pressure into illegal mining is rising. The July 2025 issuance of EO 88 in Diwalwal, the 2025 crackdown on Chinese-linked operations in Caraga, and the death threats against the mayor in Surigao del Sur are all manifestations of the same dynamic: "the higher the price, the more valuable illegal mining becomes."
- Large-scale operators are thriving. OceanaGold Philippines' net profit for the first half of 2026 rose +206%; Philex's Q2 2026 profit more than doubled to ₱392 million; Apex Mining has a US$300 million expansion plan underway. This contrast has created a political flashpoint over "whether small-scale miners are capturing any of the benefit of the price rise."
11. 注 Common misconceptions (summary)
- 注 "The Philippines is the world's 2nd-largest gold reserve holder" is not substantiated. The likely original source is a qualified MGB statement — "3rd in the world for deposit density per unit area." By central bank gold holdings, the Philippines ranks around 26th.
- 注 Beware the double meaning of "gold reserves" (underground reserves vs. central bank bullion). The BSP's Q1 2026 gold reserves of 133.51 tonnes and PSA's Class A gold reserves of 371,260 kg are entirely different things.
- 注 "ASGM accounts for 70% of gold production" and "only about 1% shows up in official statistics" are not contradictory. The former is an estimate of the real situation; the latter is the recorded amount.
- 注 Do not multiply MGB's gold statistics by "ASGM's 70%." The scope of aggregation differs.
- 注 Minahang Bayan designation does not equal an operating license. A separate DENR small-scale mining contract is required.
- 注 It is the "Borax method (Gravity-Borax Method)," not the "Borneo method." It originated in Benguet province, Philippines, and was exported to Borneo (Kalimantan), not the reverse. Be alert to material that gets the direction of origin backwards.
- 注 Both mercury use and compressor mining are already illegal. The problem is not legislation but enforcement, slow formalization, and poverty.
- 注 DENR itself concluded that the 2018 Itogon landslide was "not caused by mining." Small-scale mining was nonetheless suspended across the board. Failing to grasp this asymmetry makes it hard to understand the anger of local miners.
- 注 The February 2024 Maco (Masara) landslide (98+ dead) occurred not in Diwalwal, but as a separate disaster near a large-scale mine.
- 注 The ILO's estimate of 19,000 child laborers is a 2011 figure, with no confirmed 2024–2025 update. The HRW report is also from 2015. Do not cite either as current.
- 注 COP-6 (November 2025) did not adopt a mercury phase-out deadline for ASGM. The deadline that was adopted applies to dental amalgam (2034).
12. Practical notes for research and reporting
- Where to go for primary data: MGB (Minerals Industry at a Glance/quarterly statistics), BSP (gold purchases and foreign reserves), PSA (Mineral Accounts, on a UNFC/SEEA basis), DENR-EMB (mercury inventory/MIA), and the Minamata Convention Secretariat (the PHL country page). MGB and BSP statistics cover different scopes, so always check the definitions before comparing them.
- Local stakeholder organizations: NCSSMPI (National Coalition of Small-Scale Miners of the Philippines, founded 2016, 40+ member organizations), BAN Toxics (the coalition's secretariat), planetGOLD Philippines (concluded 2025, materials remain open), and the Artisanal Gold Council (AGC) Philippines.
- From an investment/procurement perspective: for anyone dealing in Philippine-origin gold, gold not purchased through the BSP cannot have its provenance verified. Auro Resources' introduction of traceability from 2025 onward is a response to precisely this point. Businesses subject to responsible gold sourcing requirements (OECD due diligence, LBMA standards) need to design their processes around the risk of ASGM-origin gold entering their supply.
- 注 Field reporting risk: Diwalwal, Caraga, and Surigao del Sur are areas where illegal mining intersects with armed groups and intimidation. In October 2025, the mayor of Barobo town, Surigao del Sur province, publicly stated he had received death threats. Do not assume unaccompanied entry into a mining area is safe.
- Issues likely to move next: ①deliberation of House Bill 5840, the "Minahang Bayan Act"; ②a possible ASGM mercury phase-out deadline at COP-7 (2027) (IPEN is proposing 2032); ③further expansion of illegal mining and enforcement crackdowns should gold prices remain elevated; ④the pace at which Minahang Bayan reviews resume following DENR Secretary transitions.
日本語の詳細版: 分野「地下資源」「小規模金採掘と水銀問題」(本サイト日本語版)。