THE PERFORMANCE OF THE GOLD SECTOR AND REFORMS NEEDED TO IMPROVE PRODUCTION

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Given its sterling performance in 2015 and 2016, there were great expectations for the performance of the gold sector in 2017. But Finance Minister, Winston Jordan, recently revealed that production figures show that gold declaration was not as good as they had hoped it would be.
The economist noted that gold production for 2017 was projected to be at 694,000 ounces. But only a production of 653,674 was achieved. Taking this into account, the Minister of Natural Resources, Raphael Trotman, recently called on the Guyana Gold and Diamond Miners Association (GGDMA) to encourage its members to declare more gold.
But the Executives of the Association noted that if the Government and, in particular Minister Trotman, wants to see an improvement in declaration, then there are some immediate changes that must take place. These are as follows:
• Fast track maintenance of main and arterial access roads to the current centers of local gold production. According to the GGDMA, there must also be a policy to encourage the opening of new roads to access virgin mining lands.
• Government needs to come out with a clear statement that its Green Development Strategy will not adversely impact the mining industry, but will speak to responsible mining which the Association endorses. Miners are currently unwilling to make new investments in this climate of “green” uncertainty.
• De-bottleneck the applications for Prospecting & Mining Permits which are buried under bureaucracy at the Guyana Geology and Mines Commission (GGMC). The rate of granting these documents for new mining lands has slowed. Everyone is affected and, more so, the emerging mining syndicates.
• Government needs to reintroduce the incentive to Industry Fund [was previously set at G$1B] to fund and support the drive to identify and adopt appropriate industry best practices, specifically the adoption of better technologies to improve the current 30% gold recovery and the reduction and responsible use of mercury.
• Work with the industry to reduce the hurdles in entry for new miners and barriers to production and production growth that the punitive VAT on Excavators represents.
• Bring final and definitive resolution to the issue of the conversion to Mining Permits for locally held Prospecting Licenses. This is a low hanging fruit and the obvious huge and immediate benefits from executive action by way of ministerial order are that: pending applications by local miners to convert from Prospecting Licence to Mining Permits have directly contributed to the 2017-18 shortfall in gold production as the applicants still wait, and, some over two years, for the permission to put their excavators and other idle mining equipment into production. Some of these new Mining Permits will result in immediate new investments, yielding new production and thus contribute to the increase in gold production that is being sought in 2018.
• Treat with the outstanding applications for new Prospecting Licences and PGGS; a number of applicants for both gold & diamonds and other non-traditional minerals and metals are being frustrated when applications, which historically took weeks to process, are now taking months, if not years. Applicants have voiced their repeated concerns and consternation at the bureaucratic delays, some of which they view as deliberate stalling, or worse, for whatever rhyme or reason. It is suggested that the Minister issue clear instructions to the GGMC and circumvent the dilly-dallying.
• In other situations, the Board of Directors acting under the Minister’s instructions has made decisions and forwarded recommendations to Trotman, and he in turn asks GGMC to follow up, but nothing has happened as GGMC continues to aimlessly bumble and flounder. Meanwhile, development and Direct Foreign Investment in the country suffers. Just imagine if the same bumbling surrounded the application by Reunion Mining for the Matthews Ridge manganese project; the US$42 Million they spent exploring the property would not have been spent and Bosai would not be, this year, starting the development of a new manganese mine. If you do not plant, you cannot reap!

By KIANA WILBURG

Article Categories:
Business Industries · Issue 32 · Minning

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