Record production fails to enhance gold industry’s image

For the fourth consecutive year, Guyana’s gold mining industry has realised record-breaking production levels with overall gold yield for 2012 reaching 400,000 ounces; the highest in the history of the industry. As gold continues to attract increasing levels of local private sector investment, there is also the expectation that one or more of several privately financed Canadian mining ventures in the interior could begin to yield gold, a circumstance, which Canadian High Commissioner to Guyana David Devine told Stabroek Business last week, could double local gold production overnight.

With nothing in recent global predictions suggesting anything but a continually steady rise in gold prices it would seem – at least on the surface – that the short to medium-term prospects for the country’s gold industry are, to say the least, favourable. Both local gold miners and the Guyana Gold and Diamond Miners Association (GGDMA) are upbeat about the future of the industry though the optimism of the GGDMA is, of late, measured.

The caution of the local miners and their association derives from recent developments in the industry, some of which have put miners at odds with the authorities.

The creation late last year of a new Ministry of Natural Resources and the Environment had given rise to suspicions among miners that government was about to wrench control of the mining sector from the Guyana Geology and Mines Commission (GGMC), the state agency that administers the gold and diamond mining industry. The advent of the new ministry coincided with a series of spats between the authorities and the miners. More than that, the creation of the new ministry has coincided with undisguised attempts to enforce demanding conditions that have to do with ensuring that mining methods meet higher environmental standards. Some miners are uneasy about the environmental stringencies, claiming that some of the conditionalities are much too harsh to live with.

Officially, the creation of the new Natural Resources and Environment Ministry is credited to the need to need for government to establish stricter controls over a sector which has often shown scant regard for the need to mine gold in a manner that pays heed to the environment.

The GGDMA has said that it fears government is in effect seeking to take control of what, currently, is the most lucrative sector of the country’s economy. Differences between the miners and the ministry have done nothing to slow down investment in the sector or to prevent gold production from consistently reaching record levels over the past four years.

On the other hand, the government’s inability to enforce mining regulations effectively have raised several unanswered questions about just how well it is managing the industry.

Mining officials say that an unmindfulness of mining regulations is accentuated by corrupt practices involving state-employed mines officers who turn a blind eye to transgressions in exchange for payments in gold.

If 2012 was another highly successful year for gold production the image of the industry suffered seriously from major law and order deficiencies. While armed robberies fell significantly from the levels of the previous year, violence in the mining locations as a whole rose alarmingly as several murders arising seemingly out of confrontations between persons involved in gold mining were recorded.

Not only did the interior killings reflect the violence that appears to attach itself to mining communities, it also focused attention on the ineffectiveness of policing in circumstances where the importance of the gold industry ought to have attracted more effective policing.

In mid-December, as the Ministry of Natural Resources and the Environment was announcing that the industry had met its production target, the GGDMA was announcing that relations between the miners and the ministry had improved though that was not to say that the difficulties had gone away altogether.

In the period ahead, the miners expect to engage the authorities on the restoration of the facility that allowed miners to receive payment for their gold in foreign currency.

No less important, the association says, than the stepping up of interior security.

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