Gold mining and the development of Baguio

THIS will be the first part of a series outlining the contribution of the mining industry in the development of Baguio City. These articles were taken from the book "Isles of Gold: A History of Mining in the Philippines" by Salvador P. Lopez, as commissioned by the Chamber of Mines of the Philippines.

The story of the mining industry's growth is most sensationally told as the story of how Baguio transformed from a vast wilderness with patches of human settlements into a bustling metropolis. The district, having the largest mineral concentration, particularly of gold, had the greatest potential to become a leading centre of the country's mineral production. Although it had a record of having the largest number of prospectors and mineral claimants since the 1890s, most of them Americans, the district started to live up to its billing only two decades later. By the 1920s, the district had displaced Masbate as the country's premier gold producer.

The accelerated development of the Baguio mining district was sparked by the gold booms of the 1930s. The increase in the price of gold from $20.67 to $35 an ounce precipitated a frenetic rush to the mountains of the Baguio district and elsewhere where gold was previously mined or where it was potentially mineable. The gold boom of 1933, the first in Philippine mining history, led to a vigorous effort to revive old claims, stake new ones, and operate the mines in the Baguio area. The renaissance of the industry is traceable to the sensational gold find in Balatoc in 1929. A second gold boom in 1936 brought in more capital and mining men, resulting in the establishment of hundreds of new mining companies. As a result of these developments, gold output in the Baguio district alone rose from PhP3,808,124 in 1928 to PhP16,190,795 in 1933. From 1934 to 1937, Balatoc and Benguet Consolidated ranked first and second in terms of gold production, with San Mauricio, Masbate Consoli- dated, and Antamok Goldfields in third, fourth, and fifth position, respectively.

The second mining boom of the late 1930s involved not only gold but base metals as well. There was a major upswing in demand for iron and steel, chrome ore, copper concentrates, and silver exports as strategic war minerals. The rise in the price of copper from 9 cents to a high of 17 cents per pound provided the incentive for the copper producers to develop the mines. It was in this context that the Lepanto Consolidated Mining Company grew and became an important copper and gold producer before the war. Its growth in the distant community of Mankayan, Mountain Province, was linked to the progress made by the Baguio district since the advent of the mining industry. With Baguio roads providing the main access to Lepanto mines, the movement of men and machines to Mankayan had substantial impact on the overall growth of the district.

The gold booms which swept the country in the 1930s were paradoxical in a way as gold had then ceased to be the worldwide currency stan- dard. Gold mining was tremendously aided by the business deflation that followed in the wake of 1929. Attention was directed to producing gold whose price was stable at a time when prices of all other commodities were falling. In 1931, when Great Britain revalued gold, further impetus was given to gold mining, and when this was followed in 1933 by revaluation in the United States, the value of gold mounted enormously. The importance of gold mining was indicated by the steady expansion of plants to increase milling facilities, by the construction of new mills, and by the adoption of modern mining and metallurgical techniques for large-scale operations.

Stock market activities highlighted Baguio mines as the leading contenders for grubstakes during the boom years. The real gold boom, however, occurred in 1936 and the wildest stockmarket speculation focused on Benguet Consolidated and the Balatoc Mining Company. Other mines in the area which were very much in contention included Antamok Goldfields, Gold Creek, Itogon, Baguio Gold, Benguet Exploration, Big Wedge, Atok and Demonstration. The trading of Benguet Consolidated shares was regarded as a phenomenon in the mining-share market at the beginning of the gold boom.

The frenzy over the mining stocks and the gold booms did not only tap the full potential of Baguio as a mining district but also enhanced its growth as a community. The industry brought the men from the lowlands - the technical people, businessmen, labourers, families, others - to the mines. The companies partially subsidized the construction of roads and bridges leading to the mines and supported the budding aviation and shipping industry.