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Why Tourism is Economically Superior Than Mining

Taal Volcano with Mt. Maculot in the background (Batangas)

Photo Source: Rappler
I read a news that one person invited by the next president to become the Secretary for national defense declined the job because of conflict of interest with him as a the head of a mining firm (with a huge, huuuugge mining site in Tampakan, Mindanao). It then clicked my interest in mining issues and how it fares with tourism.

I did some research on gold mining that you can find in the articles below.

The 1st article is the great decline of gold purchases by the Bangko Sentral because of tax issues. Many traders and miners do not sell their gold anymore to the government and smuggle them instead to other areas, particularly Hong Kong.

Taxes discourage small miners from selling gold to the BSP, official says

Here's a good site to understanding gold mining.

Okayyy.... We'll make it easily understandable..

The current price of gold is about $40 per gram
One mining site in the Philippines produces about 20 tons of gold per year. The government gets virtually zero income because of smuggling.
The government taxes would be about 7%  (or a bit less if we do exact accounting, which we cannot do, for obvious reasons). So we'll peg it at 6% (guesstimate)

1 kg is 1,000 grams
1 ton is 1,000 kgs

1 gram x $40 x 1,000 (to kg) x 1,000 (to ton) x 20 (tons) = $800 million (Php37.6 billion,  @47:1)

Taxes that the government SHOULD take, but is lost due to smuggling (6%) = $48 million (Php2.256 billion)

Looks incredibly huge, isn't it?
That's why the locals in Tagum City are rich and they say that luxury car companies can set up dealership in the area and they can sell many units.

Well, there's another way to look at it -- the environmental and socio-economic costs.

How much earth do you need to churn to get that gold?

The article says about 5 grams per ton. So..... how many tons of earth do we need to dig out and dump into the river that travels to the coast (thereby polluting both the river and the coastal areas)?

20 (tons) * 1,000 (kg) * 1,000 (gram) = 20 million grams

20 million / 5 grams = 4 million (grams) * 1 (ton) = 4 million tons of earth

**** i want to think that I did the math wrong...... but can you imagine how many hills or mountains would have to be cut, bored, deforested and blown PER YEAR?

So..... that would be 4 million tons of earth and rock, dug out from the mountains, laced with chemicals (to get the gold) then dumped into the river, poisoning the fishes, silting the river, then doing the same impact as the poisoned silt reaches the coastal area.

Let's do some wild computations:

If the river is about 50 km long, with a fish production of 5 tons per kilometer per year and the smothered coastal area would be about 50 hectares with the productive fishing ground of about 10 hectares and the production of 20 tons per hectare per year. Plus the average income of Php100 per kilogram of fish caught. That would be....:

River - 50 (km) * 5 (tons) * 1000 (kg) * Php100 = Php25 million
Coast - 10 (has) * 20 tons * 1000 (kg) * Php100 = Php20 million

Of course, many would say that rivers and coastlines DO NOT completely die out, that fishes are still being caught. But what kind of fishes? those laced with contaminants such as mercury? Mercury that goes into the body through bio-accumulation then  cause various diseases foremost of which would be the Minamata Disease (google it and be terrified)? Then we go into computing the social and health costs (plus the government costs in mitigating the impacts). Ey, I was involved in Agusan  watershed project that recommends the allocation of billions of pesos to mitigate the impacts of mining downstream, passing through several provinces and cities. You can just imagine... the silt, the poisoned waters, the poisoned fishes....the poisoned people.... But we cannot dwell on that in this blog anymore. We have to stick to the title of this article (I know, bad punchline).

Now, where is tourism in all these computations?

The answer is simple, actually.

$800 million is the revenue generated for every 20 tons of gold produced per year.

Each foreign tourist spends, say $2,500 for every visit in the country

We won't even discuss domestic travellers that comprise up to 90% of tourist movement in the Philippines.

So to get that $800 million, we would need to attract 320,000 foreign tourists. Sounds daunting? Well, our Asian neighbors that have less attractions than us have been generating several millions more than we get. It's just a matter of us getting our acts together.

The thing is..... that $800 million from mining will be divided to a very few companies and individuals (making them really, really rich!), compared to tourism that will have to generate the setting up of hundreds of businesses and thousands of jobs in order to get that number. This makes mining more attractive to investors. But that's what it's all about, isn't it?! The country (okay, the government) providing businesses, jobs and opportunities to as many people as possible and not just to those already rich grinches cloistered in their walled villas.

And I will repeat - at the end of the day, which one generates more businesses, creating precious jobs over so many years, with much less social, environmental and institutional costs? And yes, more sustainable.

Just look at Puerto Princesa City that has so far been resisting the entry of mining in the area. Tourism has been a more than Php4 billion annual industry in the city that has obviously spilled over to many parts of the province. There's no way that mining can equal that economic impact, even if you combine all the mining interests in the province. And to think that local executives are pushing for the removal of protection of a number of natural areas so that they can be exploited for.... you guessed it! By the way, If you map out the mining permits in Palawan (actually, also the entire country), you will get the shock of your life, guaranteed.

I would rather see a mountain visited by people for recreation and providing jobs and businesses to locals than witness trucks and payloaders destroy those same mountains for the benefit of a few who do not even live in those areas.


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