Aussie firm’s Kaburi gold mine won’t affect deforestation rates

-impact assessment finds

Over the 15 years of the Troy Resources Guyana Inc (TRGI) gold project in the Kaburi area, approximately 150 hectares of forest will be cleared for the mines, widened roadway and related facilities but this would have no impacts on national deforestation rates, according to the Environmental and Social Impact Assessment (ESIA) report.

The Australian firm has proposed a medium-scale gold mine designed to produce up to 110,000 ounces of gold per annum, based on an average overall recovery of 92% at the Black Water Creek, Kaburi Area, in Region Seven. The residents of 14 Miles, Issano will have to be relocated and the company has done a Resettlement Action Plan for the community.

The ESIA was done for Pharsalus Gold Inc (PGI), which was last year taken over by TRGI, which now holds gold mining rights to several contiguous properties, acquired by vendor agreements and direct grants, totalling approximately 1100 km2.

“The total life of mine is approximately 15 years. Deforestation rates will therefore approximate to 10 ha per year over the life of the mine,” the report states. It pointed to a Guyana Forestry Commission document, which indicates that Guyana has approximately 16 million ha of land area covered by forest.

According to the ESIA, deforestation rates in Guyana are relatively low at 0.1 to 0.3% per year. “Nationally that rate equates to 16,000 to 48,000 ha per year.

The deforestation rate of this project will add a total of 10 ha/year to those values which equates to less than 10- % increase in the national deforestation rate. This increase is very tiny and would have no impacts on national deforestation rates,” it says.

The report noted that Guyana’s agreement with Norway will pay US$30 million per year for a total forest cover of 16 million hectares. “This equates to approximately, US$1.88 per ha. The total cost of deforestation, based on the MOU with Norway, associated with this project consequently equates to US$18.80 per year.

Average estimates of royalty payments for the project exceed US$10,000,000 per year based on recovery of 100,000 ounces of gold, at US$1,300 and payment of an eight percent royalty. This project consequently adds a significantly greater amount per hectare than that provided by the payments by Norway for avoided deforestation,” the report said.

It said that the greater value of the (area) would not be restored by reclamation of the mined out areas and the sole area not reclaimed will be encompassed by lakes created by the tailings pond and open pit mine.

“The impacts of the project on the LCDS are consequently minor (low likelihood, low severity). No mitigation is necessary,” the report says.


Projected benefits


According to the ESIA report, the construction phase of the project is projected to extend over two years.

“During the construction period, the project is likely to have a positive impact on economic conditions of the entire country.

Impacts of the project on overall socio-economic conditions of the country will include generation of employment and increased demand for some goods and services,” the report said.

It stated that it is expected that at the peak of construction activities, the project will provide work for approximately 400 individuals.

These will be direct hires by the company and its sub-contractors. “This will represent a significant increase in regional jobs. It is expected that during the construction phase, PGI will be one of, if not, the primary employer in Region 7.

The workforce will likely be sourced locally since there is a large skill pool available after the closure of the Omai Gold Mine Limited (OGML). PGI will centralize its recruitment in Georgetown. Candidates from all over the country will consequently be eligible for employment. Some areas of Guyana are likely to benefit more than others. For example, Linden is the home of a large percentage of workers of the former OGML and would be the most likely source of skilled workers for the project construction phase,” the report says.

“The construction phase will also demand goods, services and logistics.

These will include transportation services, construction materials and construction equipment.

Logistics contractors including truckers and security companies will directly benefit. Suppliers of building materials and construction equipment will also directly benefit from increased demand. Construction companies could also potentially benefit if some of the construction work is farmed out to sub-contractors,” the report says.

It added that the project will also enhance the economic conditions in the country through payment of taxes and royalties to the government.

“The overall impact on the national socio-economic conditions during the construction phase is considered to be a major beneficial impact with high level of enhancement and medium likelihood,” it adds.


Potential adverse effects


The report also noted that the mine site is located in an interior area with a small and dispersed population. “During construction, the project will be construed as a potential employment opportunity and may attract people to the site in search of work. Development of the mine may also attract local vendors and service providers including sex workers to the area.

The increased influx of individuals to the site could have adverse social and environmental effects,” it said.

It also stated that the mine site area lacks infrastructure and social services and rapid development of informal settlements in the vicinity of the mine site can potentially result in degradation of surface water quality. “In addition harvesting of resources such as timber for buildings and through hunting and fishing for protein, may have adverse effects on biodiversity in the area.


Increased influx could also potentially result in increased alcohol and substance abuse, prostitution and crime. Influx of individuals could also expose PGI employees to health risks since introduction of new people into the area is often accompanied by transmission of contagious and other diseases.

Influx of sex workers often leads to increased incidences of HIV and other STDs. In addition increased criminal activity may occur because of increased influx,” the report said.

It stated that this is a major potential impact with medium likelihood and high severity. “PGI will develop and implement a focused influx management plan to mitigate these potential impacts.

The post mitigation impact is rated to have a minor likelihood and low severity,” the report asserts.

It also noted that the existence of the Amaila Falls Access Road will potentially provide access for artisanal miners to new areas, including areas of the concession bordering that road.

Encroachment by such miners on the concession could lead to security risks and possible conflicts while activities related to the influx of those miners around the project will increase the likelihood of environmental pollution, the report says. “Activities associated with ASM [artisanal and small-scale mining] may pollute rivers and/or negatively impact biodiversity or surrounding environment and may be wrongly attributed to PGI. PGI therefore would be exposed to reputational risks and environmental liability issues. This would be exacerbated if international NGOs are involved,” the report said.

It stated that this is a major impact with high severity and medium likelihood and the company will engage with the GGMC [Guyana Geology and Mines Commission] and together with the GGMC will implement an ASM management plan and will actively patrol the concession boundaries.

The post-mitigation impact is rated to have a minor likelihood and low severity, it stated.

The report noted that there is likely to be a decline in the demand for construction workers as the project shifts into the operation phase.

“The demand for skilled mining workers will however increase. It is expected that the number of skilled mining workers will be less than the number required for the construction phase,” the report said.

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