Scaled down mining, exit of Brazilians behind lower gold output –study

Scaling down of operations, worked-out lands and migration of Brazilians are three of the main reasons for a drop in gold production for the first half of this year, a preliminary report on a Guyana Gold and Diamond Miners Association (GGDMA)-sponsored study says.

The GGDMA had commissioned the study after government officials including President Donald Ramotar blamed hoarding for a 20% drop in declarations up to May. Miners strenuously objected to the claim and insisted that production had dropped and Ramotar has since backtracked on his comments and suggested instead that “delayed declarations” were to blame. Gold declarations towards the end of July were 16% lower than the corresponding period last year.

GGDMA coordinator Colin Sparman told Stabroek News on Thursday that a preliminary report on the study commissioned by the GGDMA to investigate the reasons for lower production figures for the first half of 2014, has established three main reasons for the decline. These, he said, were a drop in production due to a scaling back in the level of operations. As an example, he said that a miner would have been operating only one excavator when previously three excavators were in operation. He cited the falling gold price as one of the reasons for this.

Another reason for the drop was that miners were working on land that had been mined over and over hence recovery was low. The third reason established was Brazilians moving over to Suriname because it was easier to get work permits there. Sparman noted that Brazilians were very active in the goldfields here. “It’s a hassle getting work permits here,” Sparman added. He said that the GGDMA is continuing to investigate the causes and a full report is expected to be completed next month. Towards the ending of last month, Minister of Natural Resources and the Environment, Robert Persaud said that the gold declaration figure was still down for the year – 16% up to that time. Up to that point, Persaud said declarations were at 233,305 ounces as compared to 278,127 ounces for the same period last year.

In terms of the reasons for the drop in declarations, Persaud had said, “We have not accepted or unaccepted any factor because we are still working with the mining communities to determine some of the contributing factors.”

The minister also said it was too early to arrive at the conclusion that hoarding was the reason for the drop in declarations as analyses had not yet been completed. “At this point in time, I would say that we are doing some assessments to determine… There are a number of factors that have combined certainly together and it is our obligation and our intention to work with stakeholders to address whatever those factors are,” he said.

Further, he had said that government’s position that low declarations were the result of hoarding would have come from information supplied but did not say by whom. The minister also announced a series of measures aimed at reversing the decline.

Industry insiders had rejected government’s position that miners are hoarding gold, saying instead that a drop in production is one of the major factors responsible for the 20% decline in gold declarations for the first five months of this year which had seen Guyana losing $20 billion in foreign exchange earnings. Many miners had said that they were struggling to stay afloat and some were forced to close their operations. “The average miner cannot afford to keep gold,” one official had said.

An official of the GGDMA had stressed that the drop in price had affected miners significantly and stated that in the wake of this the organisation has been lobbying government for concessions. Land for mining is also set to be distributed via lotteries and an auction in the coming days.

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