Owing largely to higher output from petroleum, the mining and quarrying industries are estimated to have grown by 23.1 % in the first half of 2021, according to the Ministry of Finance’s Mid-Year Report.
“The mid-year growth was largely the result of higher output from the petroleum and other mining industries, given that unexpected contractions were recorded for gold and bauxite,” it said.
The report notes that at the time of Budget 2021, it was anticipated that in the oil and gas subsector the average production rate for the first half of the year would be approximately 114,100 barrels per day (BPD).
As the technical challenges with the flash gas compressor aboard the Liza Destiny FPSO continued during this period, however, the report revealed that the achieved rate of production was approximately 111,767 BPD, as efforts were made to limit the flaring of excess gas.
Though below the targeted rate of production, however, the report said that this rate compared favorably against approximately 67,205 BPD during the first half of last year, while adding that total output from the petroleum sector increased by 65.4% when compared with the same period in 2020.
As a result, the report said the subsector grew by 32.3% in the first half of 2021.
The report says that with the repaired compressor re-installed, the average production rate for the second half of this year, excluding December, is projected at approximately 119,500 BPD; highlighting that with downtime planned for December—total second half production is expected to average around 109,000 BPD—taking the annual average marginally above what was forecasted at the time of budget preparation.
According to the August 27th, 2021 report of Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, “the subsector is now projected to grow by 47% in 2021.”
Gold
Over the review period, the gold mining industry is estimated to have contracted by 20.9% when compared with the same period in 2020. This decline the report said, was largely the result of the temporary halting of operations at one large scale mine following multiple operational challenges in the first half—including deferred waste stripping, poor condition of existing equipment and the more-than-average first half rainfall.
This, combined with lower declarations from licensed dealerships, the report said, outweighed increases in Guyana Gold Board purchases and declarations from the other large-scale operator.
At the end of June, this year, gold declarations totalled 240,318 ounces, with the highest year-on-year variance recorded in the month of June. With operations expected to recommence at once flood-affected mines, the report said that improved access is expected to result in increased declarations in the second half of the year.
According to the report, despite some expected recovery in the second half, given the first half decline in production, the gold mining industry is now forecasted to contract by 12.2% in 2021.
Bauxite
At the end of June, 2021, the bauxite industry recorded a contraction of 18.4% when compared with the position at the end of June 2020. This, the report said, is largely due to underperformance by one of the large operators whose operations were affected by technical problems, taking their half-year production 37.2% below target.
Even with the technical issue resolved, output for the year, the report noted, is projected to fall below the target set at the time of budget preparation.
The other large operator also fell short of its target, with actual output of 13.1% below the half-year target set at the time of Budget 2021 preparation.
According to the report “despite these developments, the industry is expected to overcome the challenges encountered in the first half and grow by 11.7% in 2021.”
Diamonds
Additionally, it said that diamond declarations improved in the first half of 2021, growing by 166.3% year-on-year, to 18,432 metric carats.
Looking ahead, the report stated that the other mining industries are now projected to grow by a very strong 74.5% in 2021.
“On the upside, half-year growth in the other mining and quarrying industries, which comprise diamond, sand and stone, are estimated at 63.3%. Quarry stone output grew by 141% relative to last year, and sand declarations by 119.3%, both as a result of greater activity in the construction sector,” the report stated.
