MERIAN MINE, Suriname, (Reuters) – Suriname President Desi Bouterse and Newmont Mining Corp Chief Executive Gary Goldberg inaugurated the open-pit Merian gold mine on Thursday, which is expected to give a boost to the small, economically struggling South American country.
The mine has gold reserves of about 5.1 million ounces and its annual production is expected to average between 400,000 and 500,000 ounces during the first five full years of operation. Suriname’s state-owned oil company, Staatsolie, has a 25 percent stake in the mine.
“Never before did our country have the courage to participate as an equal partner in such a mining venture,” Bouterse told hundreds of guests and mine employees at the opening ceremony.
“This significant investment of a multinational of a magnitude and capacity like Newmont, proves that our small economy is able in bearing huge foreign direct investments which are indispensable to meet with the challenges and requirements of our economy in these days.”
Commodities-dependent Suriname, which also produces bauxite, is struggling under lower prices for raw materials and steep inflation, which is nearing 80 percent annually.
“(The mine) will make a significant contribution to the improvement of the bad economic situation,” said Winston Ramautarsing, president of the country’s Economic Association.
“However, we do not think that this will be sufficient to solve the problems of the country. I think it is important to make the necessary reforms in the state apparatus, we need to provide the necessary incentives to businesses, local entrepreneurs and potential investors to produce and export new products.”
Suriname’s political opposition said the mine’s impact would have been more positive had the government not indebted itself with a $550 million bond last month.
“Today’s festive mood would have been more joyful, if the government would have come up with sound financial management,” said Chandrika Santokhi, the chairman of Suriname’s main opposition group, the Progressive Reform Party.
“But instead it is conducting a very weak financial management policy.”