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The Real Cost of Gold in the Philippines

John Cavanagh and Robin Broad
Yes! Magazine / News Report
Published: Tuesday 17 September 2013
We think of gold as a sign of prosperity, but the farmers and communities most affected by mining just want their rivers and land back.
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“An engine of growth and prosperity,” announces the deep blue OceanaGold sign that greets us as we enter a small town in the northern Philippines. We’ve come a long and windy 12-hour drive through seven provinces from the Philippines’ capital city into the clouds of the majestic Sierra Madre Mountains. We stand at the base of what remains of a hill that Australian mining executives call “dinkidi,” Australian slang for “the real thing.” Just years ago, this was a green hill dotted with trees and farmers’ modest homes.

Today, after the homes have been demolished and successive layers of land blasted away by high-powered explosives, it is a giant pile of rocks, with the valuable gold and copper—“the real thing”—being extracted for the profits of the OceanaGold corporation, headquartered far away in Australia.

We sit with community members of the Didipio Earth-Savers Multipurpose Association Inc. (DESAMA), with a bird's eye view of the plundered site that's just outside the window.

To you readers, and especially those who think of gold as something of value, we invite you into the room. Some of you have followed us in our journeys to gold-mining country in El Salvador where OceanaGold has joined forces with Canadian company Pacific Rim. We invite you to ponder OcenaGold's claim: prosperity for whom?

Listen to the weary and distraught mother as she tells us that her family lives so close to the enormous conveyor belt that carries rock to be crushed that she and her four school-age children cannot study or sleep. They hear the loud droning noise 24 hours a day. When the mining company blasts rock, it feels like an earthquake. But it is her house and her land, and what is she to do?

Listen to the cracking voice of Lorenzo Polido, a farmer who moved to this fertile land decades ago, as he recounts the demolitions of homes several years ago. He tells us of a neighbor who suffered a heart attack watching his home demolished to make way for the mine. During the demolitions, many in the community set up barricades to try to stop OceanaGold. Allies from the national Alyansa Tigil Mina (the Network Against Mining), the Philippine Rural Reconstruction Movement, and other groups lent support.

Carmen Ananayo, her voice breaking and eyes tearing, talks about the 2012 murder of her daughter, herself the mother of two very young children, along with another DESAMA member. No one suggests that the mining company shot the two, but OceanaGold’s presence has brought conflict and death to this previously peaceful municipality.

As to the economic benefits from the gold mine, Carmen tells us that many of the mine's workers—often hired as irregulars to avoid minimum wage and benefits—work a grueling 12-hour shift while earning less than a meager 50 cents an hour. It would take these workers many lifetimes to approach the $1.3 million compensation package of OceanaGold CEO Michael Wilkes in 2012.

Moreover, any economic benefits from this mine's projected 16-year life will be more than outweighed by the environmental devastation. We hear of "dirty water" downstream from the mine and of dead fish washing up on the shore. What is the cause? What is in the four massive vats that can be seen amidst the mine’s machinery beside the piles of rocks? Is OceanaGold, like other global mining firms, using cyanide to separate the gold and copper from the surrounding rock? Are there sulfides in the rock now exposed by the mining—sulfides that are transformed into sulfuric acid every time it rains, creating "acid rock drainage" of toxins—as there are at roughly half the mine sites around the world? And why don’t the affected people in this area have access to this information?

"An engine of growth and prosperity," bragged that OceanaGold sign. But what we witness is the scorched earth of mining and the broken dreams of a community.

Governments of the world should be listening to the voices of these people as they set national and international mining laws. It may be hard for mining executives at OceanaGold and elsewhere to believe, but these farmers tell us that their dream is simply to end the mining, to have their community and clean rivers back, to be able to farm in peace and to build a better tomorrow for their children. They are proud to be the producers in a province called one of the Philippines' "fruit and vegetable bowls," and they want to keep it that way.

Mining executives seem not to hear these voices. For mining executives and for too many governments, the bottom line seems to be the yearly 100,000 ounces of gold (valued at $130 million) that OceanaGold projects to extract from this once verdant mountainside, most of which will be shipped overseas. OceanaGold's mine here will leave behind just pennies on each dollar extracted, a trivial sum that does not nearly compensate for the social, environmental, or economic chaos.

Back in the capital city, Philippine Human Rights Commissioner Loretta Ann Rosales tells us of the motion that the Commission filed against OceanaGold in 2011. A former Marcos-era political prisoner who was raped in jail, Rosales stands as a beacon of hope. Citing the forcible and illegal demolitions, the harassment of residents by the police, and the indigenous community's right to culture, the Human Rights Commission recommended the revocation of the mining license of OceanaGold. Rosales is now discussing with her counterparts from other countries a stronger framework to protect the rights of people and their environment from the plunder of mining firms.

OceanaGold is but one of dozens of mining companies now in the Philippines that have celebrated the skyrocketing gold, copper, and other mineral prices since 2000. Collectively, these companies are blasting up and down the Philippine archipelago and opening mines all over the world.

But in the Philippines, as in El Salvador, a broad set of groups has come together to protect land, water, and life in the face of this mining onslaught, and they have proposed alternative mining bills that would protect these basic rights. These bills, like the voices of the people of we visit in this remote community, deserve a broad hearing across the globe.

John Cavanagh and Robin Broad wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.

Robin is a Professor of International Development at American University in Washington, D.C. and has worked as an international economist in the U.S. Treasury Department and the U.S. Congress. John is director of the Institute for Policy Studies, and is co-chair (with David Korten) of the New Economy Working Group. They are co-authors of three books and numerous articles on the global economy, and have been traveling the country and the world for their project Local Dreams: Finding Rootedness in the Age of Vulnerability.

Great article. Informative

Great article. Informative and insightful.

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ABOUT Robin Broad
Dr. Robin Broad is Professor of International Development at the School of International Service at American University. She teaches courses on economic globalization & development as well as environment & development, with a focus on social, environmental, and economic sustainability.

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