Manganese and Omai
On Thursday, Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh spoke at the Annual General Meeting of the Private Sector Commission (PSC). He substituted for President Ali who had another pressing engagement. Unfortunately, Dr Singh’s presentation was not the forward-looking, enlightened perspective that the country and the private sector needed to hear in the context of the need for the transformation of the economy from one of an unreliable producer of primary commodities.
Dr Singh appeared to have been filled with pride at the loading of manganese from a mine in Guyana’s north west,
“Right now, as we speak, vessels are being loaded in the North West of Guyana with Guyana’s first shipment of manganese in 54 years”, he told his audience. It is shameful that in the year 2022, after a long history of the export of manganese from this country without any valueadded that Guyana is continuing down this road.
Perhaps the minister could have lamented, upon investigation, the royalty pittance the country will receive versus the value that will be created when the ore lands in China. Though the Chinese-owned Guyana Manganese Inc (GMI) is extracting the ore after the purchasing of four prospecting licences from Reunion Manganese Inc of Canada in November 2016, there is no good reason why this government could not be engaged in discussion with it to consider valueadded uses in glass manufacturing, batteries etc.
Aside from the historic disadvantaging of the country by the export of natural resources, it was left to the Stabroek News report on the Minister’s remarks to point out the other hazards associated with the conduct of this company. Several of its employees died during initial scoping work in the old mines likely as a result of leptospirosis. It would call in to question the type of safety gear utilised in the mine area where there would have been a high bat population and droppings would have enabled the proliferation of leptospirosis. The company had also been accused of storing manganese in close proximity to residents exposing them to toxic dust.
Alarmingly in September last year, a section of the GMI reservoir dramatically collapsed and washed away a section of the road which connects Matthews Ridge and Port Kaituma. To date there has been no word of any penalty on GMI or what other steps have been taken by the Ministry of Natural Resources and the Environmental Protection Agency to ensure the safety of residents and infrastructure in the area.
Minister Singh also waxed lyrical about the extraction of another non-renewable resource, gold which has seen the destruction of rivers and the scarring of the landscape in many parts of the country. He cited three possible new large-scale gold mining operations.
“Multiple international companies are actively engaged in various stages of development of world class, large scale gold mining operations in at least three very promising developments across the country that could see gold mines, each of which will be bigger than Omai,” the minister boasted.
“You know how significant Omai was. Contemplate for a moment three large scale operations, each of which is larger than Omai. Consider for a moment that each one of these will be employing more than 1,000 Guyanese. Consider the food and other supplies, transport services, construction, equipment supply and maintenance services and all the multiplier benefits these operations will generate,” he added
He did not name the locations or the companies which will be operating the mines but noted that some of them are quoted on international stock exchanges. The operations of Omai Gold Mines Limited (OGML) could hardly be held up as a progressive model of investment even in the 1990s when the Hoyte administration was desperate to attract foreign investment.
An adequate forensic examination has never been conducted of its operations here to determine exactly why corporation tax was never paid even though hundreds of thousands of ounces of gold were extracted in return for measly royalty rates. Sure, there were jobs for hundreds and the purchases of goods and services but those can hardly be considered as advancements in the drive for reorienting the economy.
OGML, as pointed out in the Stabroek News report, also bequeathed to the country its worst ever environmental disaster, the collapse of a tailings dam which sent cyanide-laced pollutants into the Omai Creek and thence into the Essequibo River. Instead of immediately shutting the operation and pursuing damages against it, the then PPP/C government mollycoddled OGML and allowed it to continue extraction with a mere slap on the wrist. That is certainly not the model this country needs in the future.
The Minister would also be aware that since OGML there have been two large-scale gold extraction operations both of which have encountered great difficulties even though their prospects were splendidly played up by the former APNU+AFC administration. The Troy Resources Inc operation has been shut while the Canadian company which was at the helm of Guyana Goldfields Inc had to sell to a primarily silver miner from China after the sheen of ore extraction dulled for a variety of reasons.
If permitted, any new large-scale gold extraction must come with stringent environmental safeguards, sufficient returns to the economy and value-added components.
With a PSC which appears unduly infatuated with the oil and gas economy and prone to infection by the Dutch disease, Dr Singh needed to charge it to pursue ventures that will position the Guyana economy for the future such as the reorienting of agricultural production as is being attempted now by a consortium in the Berbice intermediate savannahs. That venture could secure livestock feed for the country and eventually eliminate imports. These are the kinds of ventures that must be talked up by government officials. Omai and manganese belong to an undistinguished past.