Gov’t, gold mining sector relations

During the course of that portion of his 2018 Budget presentation that had to do with the gold mining industry, Finance Minister Winston Jordan made three important points. The first point was articulated within the framework of a hope that this year, as has been the case in previous years, the returns from the gold mining sector would replicate what he described as its “admirable performance”. Afterwards, he spoke about the “thousands of ounces” of gold being smuggled out of the country and the response of the government in the form of the deployment of “forty one trained wardens/compliance officers” whom he promised would be tasked with “enforcing mining regulations and other relevant laws.” Afterwards, he spoke about raising safety standards in the mining sector and initiatives designed to “reduce the risk  associated with the use of mercury in mining.”

It was a sort of mixed report card that cited the industry for its continued considerable contribution to the country’s economy but expressed a mixture of concern and anxiety about developments in the sector that had to do with loss of revenue, environmental degradation and security among other things. 

There were, however, two glaring omissions from what the Minister had to say. The first has to do with what, one assumes, is the regimen of lawlessness and crime that obtains in sections of the mining community. The second pertains to what, unmistakably, is a clearly acrimonious relationship between the Guyana Gold & Diamond Miners Association (GGDMA) and the Government of Guyana, clearly underlined by the sharp exchange of words between the two sides arising out of the recent shooting to death by a policeman of a Brazilian miner Estevao Costa Marques in the Puruni River. 

There is, of course a history to the exchange that long predates the killing of the miner as reflected in the reference in the GGDMA statement in the wake of the killing to other unrelated matters including their failure so far to meet with President  Granger. The government, for its part, took umbrage over what the miners had to say, even wondering aloud as to whether there might have been some deeper (perhaps political) significance to the statement.

 All of this, of course, has taken place against the backdrop of the somewhat surprising announcement that the 145,000-ounce gold declaration announced for the first quarter of this year falls short of what had been anticipated though Natural Resources Minister Raphael Trotman was mindful to declare that the 2018 800,000-ounce target (which will be another record for the sector) was still very much on the radar. Mind you, now that we are aware that a considerable amount of gold is smuggled out of Guyana annually, periodic announcements with regard to gold yield inevitably give rise to speculation as to just how much is lost to smuggling. Contextually, it is apposite to wonder whether the deployment of Wardens has, as yet, had any meaningful impact on the various transgressions in the industry, not least those that have to do with the environment (reports from the sector suggest that the indiscriminate use of mercury is still prevalent) and with gold smuggling. 

While the gold mining industry is judged (from a distance) largely on the basis of continually increasing yield it does not appear that the GGDMA believes that the sector is receiving either the recognition or the concessions commensurate with its contribution. Its most recent statement reflects a mix of anger and frustration at a time when the extent of its contribution to the country’s economy requires that its relationship with government improve. 

Gold, at least for the immediate future, will continue to be an important anchor to the country’s economy, whatever the wishful thinking associated with a swift oil and gas bonanza and the creation of an enabling environment in which its salutary contributions can persist depends largely on the quality of the relationship between the miners and the government. The two sides must find their way to constructive engagement.


Around the Web