Gold: Going forward

These days, official pronouncements on the country’s extractive sector have assumed a higher level of significance to watchers of the country’s economy, ever since gold assumed its preeminent position as the country’s leading money-earner. There has been additional interest in news emanating from the sector in the wake of the disclosure of major oil and gas discoveries offshore Guyana and the further prospects that this development holds for the country’s economic advancement.

On Thursday, Minister of Natural Resources Raphael Trotman – who appears to have emerged as a key public relations point man in the Granger administration ‒ used the occasion of the annual Georgetown Chamber of Commerce and Industry (GCCI) Gala Dinner to make further upbeat pronouncements about the gold-mining sector, including the disclosure that production had topped 600,000 ounces for the first time ever and that the hoped-for target for 2017 was 700,000 ounces.

The news, frankly, would have come as no great surprise to sector watchers who are aware that gold production has been breaking records with impressive frequency in recent years and that much of this is due to increasing investments in the sector arising out of the incentives provided by higher prices.

One must add, of course, that while prices have moved into the realm of sluggishness, production volumes have ensured that overall earnings for the industry have more or less compensated for lower prices.

On the whole, the upbeat note struck in Trotman’s presentation on gold production might be construed in some quarters as an attempt at a counterweight to the criticisms which the 2017 budget presentation has attracted, though whether another good year for gold can staunch the audible public grumbling over some of the budget measures, particularly increased electricity and water charges in the period ahead, is probably debatable. What Trotman did do, however, apart from sing the praises of gold in 2016, was to make the point that it was “the small and

medium-scale miners who make up almost two-thirds of this production.” This, it seems, was a deliberately weighted presentation, designed to placate small and medium-scale miners who, under the umbrella of the Guyana Gold and Diamond Miners Association (GGDMA), have become increasingly assertive and outspoken over what they believe is the government’s reluctance to provide the requisite levels of reciprocity (in terms of concessions) for the contribution that gold has been making to the country’s earnings.

But setting aside what may be described as an attempt at bringing seasonal good tidings and an effort to ‘keep sweet’ with the miners, on the other, Trotman acknowledges there are other formidable irons in the fire as far as the state of the gold industry is concerned. Contextually, one of those that he omitted to deal with was the issue of the illegal movement of gold out of the country, a matter which has both local and equally serious international implications and one that has attracted the attention of the United States law enforcement apparatus. Trotman would be aware that he will be expected to provide a persuasive update on this issue either by yearend or, at the outside, early in 2017.

Leaving aside the smuggling of gold there are what Trotman calls the challenges associated with “loss of life and limb, illegal mining, or other activities of grave disrepute,” that continue to plague the industry issues on which there has been less than generous evidence of an assertiveness on the part of government to bring them under control.

Those falling into the Minister’s “grave disrepute” category, presumably include the proliferation of violent crime in gold-mining areas, trafficking in persons, weapons and drugs and what so often appears to be far too little regard for life and limb in some gold-mining operations. In some of these areas, particularly those that have to do with trafficking we really have no even reasonably accurate idea (sometimes no idea at all) as to how serious they are. In the matter of violent crime in interior mining locations the evidence that this has reached crisis proportions is there for all to see whilst questions still linger about official capacity as well as determination to properly police the mining sector to ensure that regulations in relation to operational safety are observed.

First the Minister of Finance and now the Minister of Natural Resources have been publicly talking up the gold-mining industry as a key money-earning factor at a time when negative changes have afflicted the fortunes of the agricultural sector (sugar and rice) and when the sluggishness of the global bauxite market persists. Minister Trotman’s acknowledgement of these realities in his address to the Georgetown Chamber and his undertaking that “government will continue to support the (gold-mining) sector by providing operational  concessions to miners  and supporting infrastructural works whilst streamlining  operations and systems to ensure higher declarations” is going to have to be translated into action, and sooner rather than later, if gold is to continue to deliver in circumstances where the other sectors of the economy remain fragile and where the optimism associated with oil and gas discovery is unlikely to be transformed into an economy-enhancing asset for some years yet.