Accessibility and geological information on lands to be opened for mining are crucial if miners are to take up the land, President of the Guyana Gold and Diamond Miners Associa-tion (GGDMA) Patrick Harding says.
He said the GGDMA hopes to have discussions with the Guyana Geology and Mines Commission (GGMC) to ensure that the lands offered have geological work carried out on them and that they are accessible. Harding recall-ed that the last time there was a lottery for land, only 30% of those persons awarded blocks took up the land. He said accessibility was one of the key factors in this regard.
The GGDMA president said miners have been looking for land to mine and he was optimistic that they would take up land once it is available. However, he said, they also want to ensure that “there is some mineral information on the land.”
He said it is too early in the year to say what impact the release of lands will have on meeting gold production targets. “We are looking forward to making the target,” Harding stressed.
Minister of Finance Dr Ashni Singh, in his Budget 2014 presentation earlier this year, had said that gold is targeted to produce 484,562 ounces for this year, a moderate growth of 0.7 per cent, reflecting the volatility of world market prices and consequent impact on investment and production.
Last week, in the wake of a 20% decline in gold declarations for the first five months of this year, government resuscitated the GGMC’s Closed Area Committee and land for mining will be auctioned off and released via lotteries in the next six weeks. In the past, miners have called for more lands to be released, but neither an auction nor a lottery for mining properties has occurred in recent times.
Government and gold miners have not been seeing eye-to-eye as regards the recent drop in declarations and miners are mobilising in the face of what they see as an unwarranted crackdown on them by the government over the 20% decline. High on the agenda for a miners’ association meeting on Thursday is the planned enforcement of a law which could see jail time for the hoarding of the precious metal.
Government’s alarm over the slump in declaration has seen it revive the Closed Area Committee but it also backed this up with the planned enforcement of mostly dormant provisions in the Guyana Gold Board Act. It has also scheduled a meeting with gold miners tomorrow, three days before the miners meet, “to further deliberate on matters of collaboration to ensure that the gold mining sector efficiently serves the national economy.”
The government has accused miners of hoarding gold but miners and industry insiders have said that there has been a decline in production and this is primarily responsible for the lower declaration. The miners have also cited the lower international price for gold and higher costs for mining. Up to Friday afternoon, spot gold dropped to US$1,314 an ounce, after rising earlier in the week, Reuters reported.
Over the last month, concerns have grown over the slide in gold declarations as the precious metal has been a driver of the economy over the last five years and a pivotal source of foreign exchange.
Insufficient info on lands
Meanwhile, former commissioner of the GGMC William Woolford told Stabroek News yesterday that as far as he knows, the lands that are to be opened are not lands which have sufficient information that miners could immediately go and start getting gold and diamonds. He noted that the GGMDA has been asking that land that is being made available have geological information.
Woolford said that the land being released could come from a set of abandoned prospecting licences and other areas prospected by large companies who found gold but not in sufficient quantities to make it feasible for them to extract. He recalled that when he was commissioner, these lands would be kept closed and released in an orderly fashion.
Another mining official also noted that the GGDMA has been calling for geological information on lands to be released to be made available. The official noted that oftentimes, it is Brazilians who prospect mining lands and when there is a find, other miners enter the area. The official said miners have to make the investment for prospecting.
Officials were reluctant to say what impact the release of lands could have on gold production targets. The GGDMA has argued that the drop in declarations is due to a drop in production and have also cited the falling gold price while government officials have blamed hoarding of gold.
“The price of gold is not attractive. The whole analysis of gold is returns and the price was US$1,800 per ounce up to last year. Today it’s US$1,271. The cost of production is high, in many areas in Guyana because of logistics etc. production average is US$1,300 per ounce. Miners are not seeing it feasible in these areas to continue,” the mining official said.
The official also asserted that small miners cannot afford to hoard gold, noting that there would be workers to pay and feed. It was noted that most miners do not buy rations on a cash basis but on consignment and after a wash-down, they would pay off their debts and given prices these days, they are left with only a little money. “If the president knew about gold mining in Guyana, he wouldn’t be saying that miners are hoarding. Any hoarding is done by the big buyers and there (are) four major buyers in Guyana and they account for over 80% of the declared gold….if the president wants to talk about hoarding, start looking at them,” the official said, while positing that the authorities do not want to face the reality of that production is dropping.
Signs of waning boom
In Bartica, the effects of a waning of the gold boom are being felt, Chairman of Region Seven Gordon Bradford told Stabroek News. He said this is due to several factors. “If you go around Bartica, you would find a lot of operations (equipment) in people yards covered down,” he said, adding that this means that many are not working.
He said that this is due to several factors including price, weather and the lack of land. He said that the rainy weather can hamper operations, while, according to him, most times when miners get land, it has already been worked out.
Stabroek News was told previously that a significant number of Brazilian miners had gone to Suriname and Bradford confirmed the decline of Brazilians in the community. “There is a reduced presence of Brazilians in Bartica and Region 7,” he said, adding that from what he has observed, it is a significant number. He said commerce has been noticeably affected, even in the markets. “They are not doing the type of business they did before,” Bradford said.
He noted too that the shuttering of the Guyana Gold Board’s office in Bartica has affected miners who now have to sell to private buyers or go to Georgetown, which involves additional risks and costs.
In terms of reaching gold production targets, the regional chairman noted that it is already going into the seventh month of the year. “It’s really gonna be difficult to achieve that target,” he said. “But not impossible,” Bradford added.