With declared production of 88,000 ounces last year which fetched an estimated US$158.4 million, the Chinese-owned Zijin Mining, formerly Aurora Gold Mines, is up to date in paying its royalties, Minister of Natural Resources Vickram Bharrat says.
“Based on my advice, they are in good standing,” the Minister of Natural Resources told Stabroek News when asked if the company was paying its share of royalties and if it had any arrears.
He was asked the question in light of Australian gold miner Troy Resources Limited absconding from the country without paying $2b in royalties.
The company which operates in Region Seven, declared that for 2022, it produced some 88,000 ounces of gold. Gold price for last year averaged US$1,801 per ounce.
Production for the last quarter of 2020 was pegged at 6,597 ounces. In 2021, the company’s then Director of Corporate Office, Compliance, and Government Relations, Peter Benny, had told this newspaper that a target of 95,000 and 100,000 ounces had been set.
The Minister of Natural Resources pointed out that the Ministry of Finance is the agency tasked with collecting royalties but he would subsequently obtain and share the total sums paid to date by the company to this country.
Zijin Mining Group Co. Ltd and Canadian miner, Guyana Goldfields Inc. (GGI) had in August of 2020 announced the conclusion of their arrangement where Zijin acquired all of the issued and outstanding common shares of AGM.
The two companies had said the completion of the previously announced statutory plan of arrangement had been made under the Canada Business Corporations Act.
GGI’s Aurora’s mine was at the time in transition from pit mining to underground mining and hundreds of workers were laid off as a result.
Pursuant to the Arrangement between Zijin and GGI, Zijin acquired all of the issued and outstanding common shares of GGI not already owned by Zijin. Each Guyana shareholder were entitled to receive cash consideration of C$1.85 per Share held, the companies had informed.
Formed in 1993, Zijin is based in Fujian, China, and is a leading global mining company specialising in gold, copper, zinc, and other mineral resource exploration and development. On GCI’s website, it states that the project was previously put under care and maintenance due to financial losses, “however, after being taken over by Zijin Mining, it resumed production and generated profits in the same year of the acquisition.”
On debottlenecking and expansion, it states that with a daily throughput of 7,500 tonnes, the project “is undergoing technological upgrades and process optimization. After reaching nameplate capacity, its annual gold production is expected to exceed 4 tonnes.” Zijin insists that the project operates in strict compliance with Guyana’s laws and regulations, and takes strong, continued measures to ensure safety and protect the environment. “With a commitment to benefiting local society, the project proactively fulfills its social responsibilities by ensuring convenient access to essential services by community members, providing basic medical and offering emergency rescue support to the surrounding communities. In 2022, the project provided free medical services to approximately 600 individuals in its neighboring communities,” the company says.
And updating on events this year, the company said that in June it inaugurated its new airstrip, following inspection and approval by the country’s Civil Aviation Authority and that it was designed to be flood-proof and will provide employees who fly in and out of the mine with convenient travel experiences.
“The airstrip was designed by AGM in accordance with the Convention on International Civil Aviation and its construction began in April 2022. The company’s infrastructure construction department carried out the construction and quality control and invited the Guyana Civil Aviation Authority for multiple on-site inspections during the process, to ensure that the airstrip’s design and construction meet relevant standards. The airstrip was put into operation after passing its acceptance inspection at the first attempt,” the company said
“The new airstrip is 920 meters long and 75 meters wide. Notably, its elevation is 2.7 meters higher than that of its predecessor. The increased altitude exceeds the highest recorded water level of the adjacent Cuyuni River, thus eliminating the risk of flooding,” it added.
Additional developments included the purchase of a barge which had been assembled in June and launched at the Tapir barge crossing along the Cuyuni River.
The company explained that the Tapir Crossing is a crucial stop in the mine’s land transportation network. “The new addition and an existing barge each serve as a backup for the other, providing a strong boost to Aurora Gold Mine’s freight operations,” the company said.
It also updated that some 587 Guyanese had been re-employed by the company, after being laid off in 2020 because of COVID-19.
Separately, Zijin Mining Group Ltd, had contracted fellow Chinese company, Sinohydro, to expedite “stripping works” (the removal of overburden to access the ore) in a bid to accelerate their work programme at the mines, but these actions were protested again by a local company.
The company had denied sidelining local operators and said it was exploring the possibilities of having cost effective and profitable operations. Local contractor, Japarts, had its contract terminated under the management of AGM in early 2020 when the parent had begun to downscale operations.
Japarts, which worked under the management of Guyana Goldfields, had said that it was being sidelined by Zijin Mining in favour of its fellow Chinese company operating in Guyana.
Local businessman, Terry Singh, recently complained to the Private Sector Commission that his company had been replaced at the Chinese-owned Aurora Gold Mines (AGM) by a Chinese firm and President Irfaan Ali was written to about this.
Singh’s complaint had raised concerns as to whether local suppliers and partners will be retained by the company’s new operators and owners.
In July of this year, Minister of Labour, Joseph Hamilton, paid a visit to the mining site. He toured the mining operations and the concentrator control room to understand the project’s current operations, prospective developments, and safety management. The company said that Hamilton had “extended high praise for AGM’s successful endeavors in the protection of workers’ safety and rights, along with its accomplishments in environmental, social, and governance (ESG) areas.”
“Hamilton said he would like to maintain close contact with AGM and to jointly explore innovative and sustainable paths of development, in order to yield greater benefits for Guyana’s labor force and drive the growth of the mining sector. Additionally, he said he looks forward to further health and safety training collaboration between the Ministry of Labor and AGM, to empower more Guyanese with technical skills,” the company said.
