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Philippines' black market is China's golden connection

Erik De Castro / Reuters

Filipino miners push a cart containing sacks of mineral muck ore in the gold mining town of Diwalwal on Wednesday.

Erik De Castro / Reuters

Filipino miners use water to get gold dust from diced muck ore.

Erik De Castro / Reuters

A gold trader uses a stone to classify the grade or value of a gold nugget.

Reuters reports: Arthur Uy, who looks after Mount Diwata as governor of Compostela Valley province in southern Philippines, the top small-scale gold mining province in the Philippines, said the black market in gold is mainly based in the capital, Manila. "All the production of small-scale mines, almost all, now goes to the black market, because there is no tax in the black market," said Rex Banggawan, an accountant for a small-scale mining cooperative that buys and sells gold in the mountain city of Baguio in northern Philippines. "After that, smuggling is automatic."

"Most of the gold is being smuggled out to Hong Kong, that's the biggest market," said Uy, a two-term governor whose family of Chinese descent partly owns one of the four most productive small-scale mines on Mount Diwata. Continue reading the full story.

Erik De Castro / Reuters

A view of houses in the gold mining town of Diwalwal in Compostela Valley, southern Philippines.

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