Opposition concerned about declining gold production
-Bharrat confident of turnaround
Amid Opposition concerns about declining gold production, Minister of Natural Resources, Vickram Bharrat, says government is confident that there will be an increase in production beginning this year, due to a number of measures taken which include a $400 million Budget 2024 allocation to start a mineral inventory programme which would aid in the efficient allocation of gold-bearing areas.
“Over $400 million that is in budget 2024 is to start the mineral inventory programme in mining districts… In the same way we can do it with the forest inventory. Today we are starting the mineral inventory so that we can allocate blocks in a more informed way. Thereby, Mr Speaker, protecting our forests and keeping our deforestation low,” Bharrat yesterday told the National Assembly, while making his presentation during the ongoing Budget debate.
On day two of the debate, Opposition Parliamentarian, Sherwayne Holder, pointed to government’s handling of the natural resources sector, saying that that the focus seems heavily on oil while disregarding other sectors.
He called on government to not only focus on its oil resources, but take note and address the significant decline in gold production, a natural resource here that holds strong on the global markets.
“I want to turn your attention to the Natural Resources Ministry and gold mining in particular which does not escape the PPP’s friend, family and favourites policy, nor the accompanying mismanagement and discrimination. Mr Speaker, the gold industry remains a key contributor to national economic performance and to hinterland settlement and development. Gold still accounts for 6 to 8% of non-oil GDP and 60 to 70% of non-oil exports. Over the last four years, however, the gold industry has experienced a 50% drop in declaration from our local small- to medium-scale miners. Additionally, in that timespan, we have not seen the commencement of any new large-scale operation. From the large-scale gold subsector, production has actually dropped from around 186,000 ounces in 2019 to around 109,000 ounces in 2023, a decline of 70%,” he lamented.
He said that several reasons have been offered for the dismal performance, despite the fact that gold prices on the world market have remained relatively high, ranging from over US$1,600 an ounce to over US$2,300 an ounce over the last four years.
“In general, local small- and medium-scale gold miners have pointed to waning government enthusiasm in the industry since the advent of oil production. In fact, the new President of the Guyana Gold and Diamond Miners Association [GGDMA] had cause to declare in his acceptance speech last year that ‘gold mining is like the good wife, we must not be distracted by this new ‘girl’ called oil and gas’,” Holder said.
He pointed out that the industry is plagued by increased
illegal mining, increased raiding of gold operations, increased illegal buying and selling of gold, and increased smuggling, and nothing is being done to actively address these.
“What all this means, Mr Speaker, is that the gap between actual production from local miners and gold declaration continues to widen. The illegal trade in gold is not only rampant in the mining districts, but also prevalent in our very capital city, Georgetown. The government has failed to adequately respond to these issues.”
Further, he added, “It requires more than lip service and half-hearted enforcement exercises to reverse these trends. It requires the mobilisation of the Ministry of Natural Resources, the GGMC, the Guyana Police Force, and the local communities. It requires a zero tolerance from the government for corruption and cronyism. It requires that the government pay attention and take action and not be overly infatuated by the new ‘girl’ named oil and gas.”
The Opposition Parliamentarian, who focused most of his presentation on the natural resources sector, said that compounded by listed ills, local gold mining has “simply run out of living space, as most of the accessible work grounds have been worked and reworked to exhaustion ... and then reworked again.”
For this reason, he called on government to address the maladies urgently. “The government needs to urgently increase both the availability of and accessibility to new mining lands. This requires the government to find new areas of gold mineralization and build new access roads. In so doing, the government must ensure three things: (i) that gold miners at all scales can have access to these opportunities, and not just the privileged, (ii) that the land rights of our Indigenous people are respected, and (iii) that our environment and biodiversity are protected.”
Minamata
He reflected on promises made by the PPP/C and this country when it signed on to the Minamata Convention on mercury, aimed at phasing out the all-embracing use of mercury in small- and mediumscale gold mining in Guyana. He said while the initial signing was of “much fanfare, of recent, apart from a few workshops, not much visible evidence exists that the current PPP government is serious about pursuing this goal.”
“We in the Opposition, call on the government to treat this matter with greater urgency. Mr Speaker, we on this side of the House still recognize the importance of the local gold mining industry…,” he added.
The Minister of Natural Resources fired back, saying that the PPP/C expects gold declarations to start moving upwards and he announced that an existing large scale gold miner will begin underground gold mining here where it is expected much of the ore will be mined.
Bharrat said that while the data on the production slump is correct, the Opposition has to also take into account that it started from 2017, a time when the APNU+AFC was in government.
He also noted that it was the APNU+AFC that had placed burdensome measures against miners.
But looking ahead, Bharrat said that government has, since taking office, looked at a number of ways to incentivise small- and medium-scale miners, and pointed to the allocation of claims in the Troy Resources area to 82 local miners. Large-scale Australian miner Troy escaped from the country last year leaving a royalty debt behind and embarrassment for the government.
Bharrat said that government is also working on regularising mining in Amerindian communities. “That is a priority for us,” he said.
And where Holder lambasted government for what he deemed as mismanagement of the oil and gas sector and lack of accountability, especially with regards to the IHS Markit scandal and its defence of ExxonMobil’s failure to provide adequate insurance coverage, the Minister of Natural Resources did not rebut.
Instead, he gave an overall position that his government is handling the monies from the sector in the most prudent of ways, pointing out that the Natural Resource Fund Act his government formulated, allows for monies to go into the Consolidated Fund,
which parliament scrutinises.
“Mr Speaker, our oil industry is constantly in a state of turmoil because the government has demonstrated that it is unpatriotic and incompetent in equal measure… the government’s refusal to provide proof of Exxon’s US$2 billion parent company guarantee in the event of an oil spill, as first ordered by Justice Persaud, risks putting our entire country in jeopardy. While the case on full liability coverage is being decided, this parent company guarantee serves as one of Guyana’s first defenses in the event of an oil spill,” Holder said. “... We reiterate now the importance of a parent company guarantee as well as oil spill insurance so that Guyana does not bear the brunt of an oil spill’s costs, if we are unfortunate enough to face one. The government is rushing ahead, approving development after development, without safeguarding the interests of the Guyanese people. This practice must stop!” he added
Turning to the audits, he said that “We see pernicious attitude that is reflected in Guyana’s cost oil audits, where we in the Opposition had to fight along with civil society and the media to get the government even to agree to audit! We had to fight to get the government to also release audits! And when the first audit finally came into the public domain it had to come on the back of a leak to the press. We say to the government, shame! We say to the government that that attitude is unpatriotic! We say to the government that this practice of wanton secrecy must come to an end! Even worse, Mr Speaker, that first audit erupted into chaos as the government claims it was a junior functionary who agreed to reduce the amount in dispute from US$214 million to only US$3 million, potentially robbing Guyana of US$100 million. We continue to believe he was not acting on his own, and that this should be thoroughly investigated.”
Holder said that government must now undertake to recover in excess of US$100 million as is noted in the IHS audit. He said that “the laundry list of controversies we witnessed with that audit, many Guyanese expected the government to take this process more seriously and to immediately assemble an audit team of legal, accounting and arbitration experts to reclaim our funds.”
“We have heard not one word on this issue and this budget seems silent as well,” he added.
Holder said that if the government wants to show the Guyanese people that it is committed to safeguarding their rights it, “must assemble an appropriate team, fund them and treat this issue with the same urgency that it spends those same hundreds of millions of US dollars.”
He added, “Even further, it is nonsensical to borrow millions of US dollars when you have monies available for you to retrieve. The government must take this seriously and we will stand with every patriotic Guyanese to hold their feet to the fire until they fulfill their duty.”