Gold and diamond production sparkles
-31.5% of national exports in 2002
By Kim Lucas
Stabroek News
January 27, 2003
The Guyana Geology and Mines Commission (GGMC) on Friday reported record levels of production for gold and diamonds last year, but said the sector's overall performance had been mixed.
Addressing the media at the Brickdam office, Com-missioner Robeson Benn said issues related to developing the quality, quantity and timeliness of work still were below that which was desirable, with more time needed to effect improvements.
Nonetheless, there was significant mineral declaration last year for gold and diamonds. According to records, 117,240 ozs of gold was declared by smaller operators along with an all-time record of 248,436 carats of diamonds for 2002.
According to Benn, the total income for 2002 was $648M versus a budget of $573M, with royalties being $278M against a projection of $346M.
"There was a 62% negative variance on budgeted financial and administrative income created by shortfalls in payments of rescheduled sand and stone debts. Total expenditure was 77% of the budget at $469M. There was a 4% increase compared with 2001's expenditure of $449M. The level of expenditure is reflective of the reliable efficiency and capacity of the Commission and of the exercising of some prudence in financial management," the Commissioner told the gathering.
Prime Minister Samuel Hinds, reviewing the industry's performance, noted that there was an overall decline, by about 6% to 7% in 2002, mainly from falling production and the prices of bauxite, and reduced production of gold at Omai. Hinds noted that Omai's current reserves are running out and the company is exploring other areas.
"Production of gold at Omai at 294,000 ozs, was less than in 2001, but above [what was projected]... Omai's current reserves would sustain operations only unto 2005/2006. During the last year, Omai applied for, and has been granted, additional neighbouring areas to continue a prospecting programme, which we all hope would establish more economic reserves so that that operation can continue. Also, with the recovery in gold prices, Omai is considering the attractiveness of reserves in the Eagle Mountain area where they studied before," the Prime Minister told reporters.
Placing the achievements and contribution of the mining sector in relation to the national economy, Hinds pointed out that preliminary figures for last year put the sector's contribution to national exports at 38.7% with 7.2% for bauxite, 27.5% for gold and 4% for diamonds. He said this was good when compared with the exports in the other industries.
In relation to the bauxite sector, Hinds said 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.
"The removal of the silo ship (by ABC) ... the volumes of production couldn't maintain a $50M ship parked and running, so it was removed because of the cost, but there is also a price in removing it, in that the industry has been experiencing the expected difficulties in having a very clockwork arrangement to synchronize bauxite drying at Aroaima, barge movements up and down the river and the arrival of ships in the harbour at the mouth of the Berbice. At Linden, calcined bauxite production continued its long downward slide, reflecting the need for reinvestment, reorientation and rejuvenation. Towards the end of the year, a fourth, much larger contract was entered into with Omai for contract stripping and mining. The cost for that contract is much lower than it would have been if Linmine were operating and they are very comfortable that it would lead to more sustained and predictable mining," Hinds said.
Reports indicate that local needs for sand and stone were being met last year, and too, there are reports of intermittent exports which it is hoped are paving the way for increased exports. But the supply of loam in the country is running low.
Hinds told reporters: "In the case of loam, we see the end of the loam pit that has been in use for some time. One of the problems with loam is that we cannot get from the materials people in civil engineering enough of a description of loam, so that we could look to find other materials that may fit... Loam as has been had so far from the pit in the Timehri area is running out and we don't see any immediate replacement."
Hinds further stated that the declarations of production on payment of royalty for these industrial minerals continued to be lower than what is apparent for a number of reasons.
"Perhaps the major reason is that all of the foreign-funded projects, the overwhelming majority related to infrastructure construction, enjoy waiver of royalty, but there is yet no system to routinely inform GGMC of materials for which royalty is to be waived. In the meanwhile, GGMC is developing the capacity to establish routinely by surveys the quantities of materials mined."
Towards the end of last year, steps towards improvement in the sector were made, but according to Hinds, they dealt with issues of support from the government side, incentives, encouragement and what the industry could do to increase contributions directly and indirectly to the nation and, particularly, to the treasury.
"Looking towards the future, we see, particularly with the rise in gold prices... there is a returning interest in larger scale and formalised mining. So we are seeing increasing interests again in reconnaissance - geo-physical and geo-chemical reconnaissance - and also interests in PL's (the large scale mining). It is heartening to see a widening of interest in copper as a major constituent in one potential body, but note that the interest in columbite tantalite has waned in step with the waves in the market price. The continuing challenge facing the mining sector, stated in general terms, which would be much the same for all economic activities are to seek simultaneously to lower direct operating costs, increase earnings... reduce negative impacts on the environment and on other people, improve acceptance in the wider community and also improve the all round livelihoods and prospects for those in the sector."
Hinds said that whilst there is a lot that could be, and should be considered and done in the area of science, technology and equipment, the bigger reductions in costs would come from improved transportation, yielding lower costs, greater reliability and consistency in delivery supplies.
"Our efforts are continuing to encourage and promote cheaper road and water routes to the mining areas. Prices for gold and diamonds in Guyana are already aligned with prices in the world markets, no room is seen for improvement - the danger is effective lowering of prices".
