At a news conference at the Guyana Geology and Mines Commission (GGMC) he congratulated those who are involved in the mining of gold and diamonds as well as the GGMC for the output in the sector.

According to Mr. Hinds, there were "record levels" of production of gold -117,240 ounces (by smaller operators) - and of diamonds, 248,436 carats for 2002.

Overall, however, the sector declined by 6% to 7% in 2002 from falling production and prices of bauxite, and reduced production of gold at the Omai Gold Mines Limited as it comes to the end of its current reserves, he reported.

Referring to the contribution of the mining industry to national exports, he said that overall it was 38.7%, with bauxite accounting for 7.2%, gold for 27.5% and diamonds for 4%.

In comparison, agriculture contributed 44% to national exports, the Prime Minister told reporters last week.

Mr. Hinds explained that production of gold at Omai stood at 319,000 ounces which represents a 12% increase over the projected target of 284,000 ounces.

However, Commissioner of GGMC, Mr. Robeson Benn attributed this to the discovery of high grade veins by Omai.

Benn also observed that if the present world market price of US$350 is sustained it would be an incentive to the gold mining sector.

Omai's current reserves are running low and would sustain only up to 2005/2006, the Prime Minister reported but assured that additional prospecting areas have been granted to the company.

Also, with the recovery of gold prices, Omai is reconsidering the attractiveness in the Eagle Mountain area, he added.

Touching on the bauxite industry the Prime Minister said continued depressed prices have severely affected its performance.

"The merged ABC and BERMINE operations exporting raw bauxite of metallurgical, chemical and cement bauxite achieved about 90% of the volume intended but prices continued to be depressed", he said.

"The removal of the silo ship has, as expected, presented huge difficulties in requiring the most accurate clockwork synchronising of bauxite drying at Aroaima, barge movements and arrival of ships.

"At Linden, calcined bauxite production continued its downward slide, reflecting the need for reinvestment, reorientation and rejuvenation.

"Another (fourth) much larger contract was entered into with Omai for contract stripping and mining. Costs would be lowered and production would be sustained and profitable," he explained.

While it is recognised that business in industrial minerals is greater than in minerals producing metals, in Guyana, because of low levels of declaration of sand, loam and stone, royalties collected are lower than expected, he said.

He said the major reason perhaps is that foreign-funded projects in infrastructure construction enjoy a waiver of royalty, but there is no system yet to routinely inform GGMC of materials for which royalty is to be waived.

He added that GGMC is developing the capacity to establish routinely by surveys the quantities of materials mined.

The challenges facing the mining industry are similar to those of other economic activities, and these include lower direct operating costs, increased earnings and better prices, reducing negative impacts and improving the all round livelihoods and prospects for those in the sector, Mr. Hinds said.