The slumping gold price on the world market has the local mining industry very jittery even though the record gold declaration for the year does not seem to reflect this mounting concern. The Guyana Gold and Diamond Miners’ Association (GGMDA) is already seeking government concessions to cushion this difficult time.
The association is seeking concessions on equipment and fuel as a means of alleviating the financial difficulties which will inevitably arise as a consequence of the slumping gold prices. While this seems the correct approach at the moment, it seems very short term and would not effectively deal with the long term picture which portrays the high gold run as coming to an end. What is needed is a long term vision that can cater for the conditions where the gold price will remain comparatively low for probably the next few years.
The good thing about this present slumping price is that it is happening after a number of years of very high profit margins for the mining industry. As such there should be a large amount of cash flow still in existence within the industry. The government agency, the Guyana Geology ad Mines Commission (GGMC), especially, would have experienced very high revenue over the past few years. Provided that there was prudent management during the economic boom then this organisation should have a very healthy bank account.
A key to maintaining the mining industry during these low gold prices would be to improve our recovery systems. A higher gold recovery would compensate for a lower sale price.
Over the past few years, GGMC has been promoting alternative mining systems to mercury. It is said that these systems also have a much better recovery rate for gold, especially the fine gold, which is presently being lost in the mining systems used today. Despite GGMC’s efforts to introduce these alternative systems into the mining industry, mercury continues to be almost exclusively used.
It must be said that GGMC’s effort to introduce these alternative systems has been token at best. No initiatives were offered to the small miners to entice them into trying out these new systems. A revolving loan scheme whereby the small miner could access a loan to purchase the admittedly expensive equipment, could have been offered in the times of financial boom. Even a system whereby the small miner could have been offered a prime piece of mining land on a portion of the many GGMC reserved areas with proven mineral potential, provided that his recovery system was non-mercury, could have also been promoted.
Now that the slumping gold prices are affecting the small miners, it is probably as good a time as any for GGMC to further promote these alternative mining methods mainly as a means of improving recovery. They should put aside a portion of their vast economic reserves towards promoting initiatives whereby the small miners can buy into these alterative recovery systems. The two above-mentioned ideas, especially the revolving loan fund, should be promoted.
The environmental benefits of such an initiative is so high that the environmentally funded organisations who have access to international loans should partner with GGMC in trying to make these recovery systems available to the small miners. Requisite training and monitoring should be part of the complete package.
Such initiatives will be of lasting benefit to the mining industry rather than just simply seeking tax concessions.
So while the slumping gold price is cause for major concern in the mining industry, it could also herald a new era of mining which provides greater production while also being more considerate towards the environment and the other people who use resources nearby.
The onus is on the Ministry of Natural Resources, GGMC and the powerful GGDMA to come up with creative ideas to provide long term solutions to the mining industry. The alternative recovery systems could be a major step in this direction.
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