Dear Editor,
Stabroek News (SN) in the article, ‘Hinds defends proposed mining reforms’ of February 2, and the editorial, ‘Mines protest’ of February 8, make certain accusations against the government and Omai Gold Mines Limited (OGML) which are inaccurate. The rejection of these inaccuracies ‘pulls many of the legs’ from under SN’s position that the government has been lax on mining matters. Even more importantly, the maintenance of these inaccuracies betrays the fact that there are many questions, including questions about foreign direct investments in Guyana, which SN and, no doubt, many Guyanese need to discuss in detail in order to more fully understand the issues and to resolve and reconcile the contradictions which are always present in any substantial issue such as foreign direct investment.
i) With respect to the Omai spill, the government did not “let OGML off.” As SN should know, the government, with the Ministry of Health leading, requested and received an appraisal of the effects of the spill from PAHO/WHO and other experts of international repute. The government acted fully on their report on the effects of the spill and on their recommendations for corrective action.
ii) With regard to the reclamation of the OMML site, OGML was not allowed to “walk away from the scarred landscape.” OGML from the beginning, with a 12-year mine life, was mining with reclamation in mind and following a path of progressive reclamation. Specific reclamation activities began with the first of a series of eight reports on “Closure” being tendered in 1996, nine years before mining ended.
OGML was steadfastly proceeding with the original “Back to Nature” closure plans when, as SN and others should recall, there were calls from civil society for turning the exhausted mine into some form of new National Service centre, or for it to be put to some other use. Government then engaged OGML in 2006 to modify the “Back to Nature” approach so that identified infrastructure might be maintained according to an “After Use” approach.
OGML was well on its way, and preferred to complete the original closure plan which called for demolishing and removing or burying; ploughing up, re-grading and vegetating all disturbed areas, obliterating the fact that a mine was there; and, aiming to leave the area in a self-sustaining “natural” condition.
At the government’s insistence, certain identified infrastructure was retained and eventually taken over by the GGMC in early 2009, including the main road from the ‘turn-off’ on the Linden-Lethem road, the crossing barge and landings, the aerodrome, the main road through the location (to be connected to an upgraded trail through to 72 miles on the Bartica-Issano road), the administrative buildings and some other buildings at the mill-site, including the aggregate plant. Some overburden boulder stockpiles were kept uncovered to be a possible source of stone and the hotel area where workers lived was retained.
Everything else has been returned to nature as far as possible and, in any case, left in a sustainable, “natural” situation. The Fennel and Went pits remain, as well as the clear-water lake; a portion of the tailings pond has been set up as a wetland/swamp not untypical of the area. OGML’s final audit reports show the expenditure of US$7.2M in direct reclamation activities versus a budget of US$5M. SN can rest comfortably assured that OGML was made to “put every last dollar of its commitment into a reclamation plan.”
Whilst GGMC/GOG welcomes, and has invited, persons to look at a possible underground extension of the mine, this would be quite a new and different operation coming after a further three to five years of further drilling, evaluation and modelling. This possibility has not dictated the amendments to the original ‘Back to Nature’ plan.
The Prime Minister (PM) insists that he arrived at a conclusion which was correct – that SN had shifted its ‘feet’ on the mining issues based on SN’s articles, over the last five years or more, of often unbalanced, biased reporting on small and medium-scale mining, articles which bothered the PM, the GGMC and miners enough to warrant a response to the worst of them. PM was therefore quite surprised at the tone taken by SN unto their response on February 2. It is true that PM had not yet seen SN’s editorial of January 11. Since each person may judge differently, PM invites SN to set up a jury of 12 honest persons to read SN articles over the 5 years pre-announcement and the SN articles thereafter, and have them base their judgment on whether SN had changed from its earlier position or not.
Whatever the outcome, PM notes and accepts SN’s assertion that SN “remains unremittingly critical of the damage caused by mining and other activities to the environment.” From SN’s other statements, negative impacts on the society and on the livelihoods of Amerindian and other hinterland dwellers are repugnant. But PM has been an old miner himself and recognizes that the problem is that things that were done acceptably before, miners can do no more! PM therefore repeats his call tor SN to become part of the solution by helping with the required, transformation.
PM challenges the SN’s charges of “the insouciance of the government and regulatory agencies.” SN will recall that back in early 2001, PM had the GGMC close mining operations in the upper Mazaruni when, at the end of a long dry season such as this one, with little flow down the river, the muddy discharges from the dozen or so mining operations had turned the mighty Mazaruni to a muddy soup, from Imbamadai to below Kamarang. SN may recall that persons from the IAST and GGMC were dispatched to Imbamadai, and working with the miners, were able to set up tailings storage areas so that, as it happened, all but one of the operations could discharge clear water (NTU <30) to the river and could be allowed to restart within two weeks. PM has heard that the sole miner who couldn’t restart has now become somewhat reconciled to that event because it pushed him out of mining to become a supplier of mining equipment and supplies, and may, indeed, be making more money since! This event sparked the realization of the necessity for, and effectiveness of, tailings ponds and flocculent treatment of tailings so that no dirty water would reach streams, creeks and rivers.
It is said that, “It is a truly ill wind that blows no good,” and so it may be with this contretemps – this furore. We all together – every miner, everyone related to miners and mining and indeed all Guyanese – are now very aware of this issue of acceptable mining practices for these times, in today’s circumstances, and of the challenges which these bring. The nation’s attention has been caught, and this is a good pre-condition for managing this transformation of our small and medium-scale mining sector.
PM can truly say that he was astonished by the response of the miners to the call for six months notice. At GGMC’s last Annual Mining Exhibition and Conference during Mining Week in August 2009, a presentation by Guyanese Joe Bakker, received much attention and acclaim.
Joe stated that he spent the first half of his life mining bauxite in Guyana and Brazil, thinking only of mining, and the second half of his life was spent evolving and enforcing legislation for acceptable mining for the Florida State Government. Joe’s presentation was based on a picture of a big locomotive engine – the environment train – coming down the track on which were a few small miners. Joe’s exhortation was, “Don’t try to stop this environmental juggernaut, but get aboard!” A repeat presentation was arranged by the GGDMA, indicative of both the awareness and readiness of small and medium-scale miners to take environmental regulations on board. But we humans, however much we hear about a change, are, nevertheless, jumpy when that day arrives.
For PM, the galvanized response of miners has exposed an anxiety, a nervousness, about issues of which miners might not before have been fully conscious, or if conscious, might have been putting to one side. The furore has set the stage for these feared issues to be explicitly recognized and frontally addressed. This is the way in which solutions would be found and small and medium-scale mining sustained. PM senses these three causes of nervousness in the response of miners:
i) The six-months’ notice is to align timber harvesting with the mining plans. It is not to give the GFC a veto on mining but, rather, it is to give the GFC time to align timber harvesting with the mining plans. This six-months’ notice is not intended, nor ought, to cause miners to sit idly down with all their people and machines, and with significant monthly hire-purchase payments to make. It is a demand, however, that every miner from now on, works with a minimum of six months’ reserve in his mind – money and time and thought have to be put into preparing and looking ahead for at least six months – a frightening, big change in conceptualization for many miners who now work in a location until some unknown day when it wouldn’t be paying, and then must scramble to find, hopefully, a ‘more paying’ location.
Looking ahead, thinking of and identifying reserves for six months or more into the future, must become essential for miners with capitalization of say G$20 million or more, or with hire purchase payments extending to six months or more.
ii) This need for identified reserves should not be new to miners. PM recalls at the same mining conference last August, a presentation by a miner from New Zealand on the trouble medium-scale miners there (about 5000 oz/yr) got themselves into, before they started thinking about reserves. The message was clear! You have to think about reserves for, if not, one day you will fall off an escarpment – bauxite companies regularly carry out a reserves analysis looking outwards 30, 50, even 100 years!
iii) A second reason for nervousness must be the question – how long will this gold price last? One can interpret this from the question some miners are asking – why is the government introducing this now? The time when prices are high, the time when there is money, is the time to make investments in changes, in new methods, in infrastructure, in investments which could not be afforded when prices fall. This has been a mantra for sugar producers over centuries. Costs must be reduced!
iv) A third reason for nervousness must be the question – will I survive the fall in prices when it comes? Many would recall, with fear, the bottom gold price of US$252/oz in 1999 compared with prices over the last year ranging between US$900 and US$1200/oz. PM would guess (because few miners, if any, maintain such figures) that average production costs of each of the 800 or so individual small and medium-scale gold miners range over US$400 to US$1000/oz, and many may not survive a fall in gold price to, say, US$600/oz. We must prepare now and seek ways to reduce costs in the future.
One does not overcome problems either by the paralysis induced by fear and trembling, or by being galvanized into wild agitation. This is the time for intense but calm consideration, a time for putting heads together and keeping at bay the natural anxiety which comes with having problems at hand, with no solution in sight – the situation which sparks one’s intuition, ingenuity and innovation, when one opens one’s mind to them.
The GGMC, the Minister, the GGDMA and many miners have been putting their minds to resolving, these issues; by talking about acquiring, testing, adopting and popularizing systems said to be in production and use in Brazil which would replace the standard sluice box which is considered ineffective in recovering the finer gold particles. This system is admittedly costlier and more demanding to operate and would cost perhaps G$5 million to G$10 million versus perhaps G$100,000 to G$500, 000 for a sluice box, but which would be more in line with an investment of G$20 to G$35 million in a backhoe, and which is expected to improve overall recoveries in fine gold areas from say 30 to 40%, to 60 to 80%.
PM has been astonished by the seeming intensity of this conflict, but he is not dismayed; he sees possible good outcomes.
He recalls a similarly intense conflict and bruising confrontation between the small aircraft owners of Guyana and our late President, Dr Cheddi Jagan, when he opened the first new building at Ogle, and when he, Dr Jagan, in turn, challenged the aircraft owners to move beyond their hitherto comfortable ‘safe zone’ of charter operations, to the beginning of local, scheduled services, thereby transforming themselves into real, though small, airlines. PM believes that this was the necessary jolt that has brought us today, about fifteen years later, to the status of a regional municipal airport at Ogle. PM believes, and hopes that, similarly, when small and medium-scale gold miners look back fifteen years from now, they also would see the six months’ notice as the jolt that transformed the small and medium-scale mining sector into the responsible businesses and business people, to which we all aspire.
Our 800 or so small and medium-scale gold mining operations are being required to meet the practices to which large-scale companies are held.
One approach is for them, through coordination and networking, to become in effect a much smaller number of virtual large-scale companies. There are already indications of emerging specialization and coordination. This, as PM sees it, is the road to sustainability, growth and development.
Yours faithfully,
Samuel A Hinds
Prime Minister
Editor’s note
OGML was let off. It certainly should have faced severe penalties for the collapse of the tailings dam considering the earlier breach.
The fact remains that OGML did not fully meet its ‘Back to Nature’ commitment. The Prime Minister’s reference to “calls from civil society for turning the exhausted mine into some form of new National Service centre” is just for convenience sake. First, the government hardly pays heed to any call much less one from civil society. Second, perhaps the Prime Minister might elaborate on what was done since then to give life to the calls for a new National Service centre. The modification of the OGML plan with the concurrence of the government from ‘Back to Nature’ to ‘After use’ is mind boggling.
The cases cited by the Prime Minister of regulatory intervention where mining damage was detected are not sufficient to counter the view that the government has been lax on enforcement. Indeed, the squad of mines officers who will now be deployed in the interior is evidence of this.
Stabroek News maintains that there has been no shifting of its feet on mining issues. The Prime Minister continues to equate reportage on mining matters with approval of the cause of the miners while ignoring the consistent editorial position of the newspaper against damage to the environment caused by mining.
