The gold mining industry is not what it used to be two decades ago. It has benefited from successive years of climbing world market prices, making investment more attractive for local and external investors. Meanwhile, gold has been elevated to the position of the country’s top money earner.
The ascendancy of gold has coincided with a corresponding decline in the fortunes of bauxite and, more recently, sugar. Continually rising coastal unemployment has witnessed a shift in labour to the gold-mining regions to go along with the greater concentration of new investments in those areas.
The government, too, has taken a renewed interest in the gold-mining industry largely because of the significant increase in the earnings from the sector and the realization of royalties to the public treasury. Official interest in gold mining has also had to do with the importance of environment-related regulation in the sector. To a considerable extent, the lure of gold has far superseded concerns for environmental preservation. How to ensure the preservation of the country’s forests and stem the flow of mercury-related pollution of waterways is an ongoing challenge for the authorities.
The economic success of the gold-mining sector has been attended by a considerable downside. Environmental considerations aside, the returns of the industry have attracted the attention of ruthless criminals and spawned a continually worsening culture of violence in the mining communities. An ill-equipped Guyana Police Force has proven to be near powerless to bring a greater measure of physical security to the sector and law and order to the interior host communities. Accordingly, the mining communities have moved to put their own security measures in place. ‘Law-enforcement’ has been known to manifest itself in the acquisition of weapons brought into Guyana across the borders with Brazil and Venezuela and all too frequently, resort to unlawful vigilante-type reprisal killings. Again, the police are often powerless to enforce the law.
The environmental and physical security of the mining regions of Guyana has been among the biggest failings of the authorities. Though, there are those who would argue that an even bigger failing has been the persistence of conditions of a subsistence existence in some Amerindian communities even as the returns from the gold mined in their communities improve the lives of people elsewhere in the country. This is not an issue that the authorities have been keen to talk about.
Looking ahead, there are several issues which, potentially, can change both the face and the fortunes of the gold industry. The two that come most readily to mind are, first, the continued slippage in the price of gold and, second, the growing international focus on the use of mercury as a gold-recovery tool.
For Guyana the issue of gold prices is an imponderable. Industry officials maintain that price levels are still some distance from a point that might give rise to reduced investment in the sector. That having been said we need to remind ourselves that Guyana remains a price-taker in the global gold industry. So that, in the final analysis, it is powerless to do anything to affect price movements.
As far as the use of mercury is concerned, Natural Resources and Environment Minister Robert Persaud is on record as saying that it could be another ten years before mercury can be entirely phased out from the production process. Here, there are several imponderables, including a healthy measure of uncertainty as to exactly where the local industry will be in ten years’ time. Conceivably, prices could slip to a level that might even result in a serious decline in investment in gold mining.
The other possible scenario has to do with the likelihood of an accelerated global focus on higher environmental standards in the production of gold. This would mean that Guyana may well have to adjust its timetable for the phasing out of mercury, or else, face difficulties in terms of access to major external markets.
Those are not the only issues that the gold mining industry will have to face. From the standpoint of government there are:
(a) the implications of a continually expanding gold industry for the movement of people and weapons across our borders and the implications for the sanctity of our borders and law and order in interior communities;
(b) significantly upgrading the currently woefully inept policing regime in the country’s mining (interior) communities;
(c) improving institutional oversight of mining operations to ensure compliance of mining/environmental regulations and
(d) seeking to upgrade the performances of and reduce if not eradicate altogether, corrupt practices involving Guyana Geology and Mines Commission officials and miners. All these apart there is still the issue of what is believed to be significant levels of cross-border smuggling. This is not an issue that is spoken of with any degree of frequency in official circles though it is widely believed that significant quantities of gold are smuggled out of Guyana, across the country’s borders.
The real problem with the gold industry may well repose in the fact that, on the whole, most of us know really very little about the sector. It is covered in layers of secrecy associated with corrupt practices which, more often than not, fail to reach public attention. It is precisely for these reasons that gold as an economic asset remains a huge imponderable. Whatever its fortunes over any particular period, the future remains strewn with uncertainties over which we have really very little control.
