In Guyana, we are often told about our tremendous potential; about how blessed we are by the Almighty to have so many natural resources. We have Forestry, Agriculture, Land, Manufacturing, Tourism et al.
Conceptually, while one accepts natural resources as a nation’s patrimony, the real wealth of a nation is its people. Mineral wealth is certainly dependent on human capital, especially as it relates to accessing those mining areas by means of roads, airstrips, water-ways, vehicles and aircraft. Human capital also comes in the form of suppliers who service this industry with fuel, food, flights and spare parts.
The Government of Guyana, through its many Ministries, plays a vital role in supporting the mining and commercial activities in our hinterland. Without these support services, as we have seen, costs would escalate dramatically. This is often times the case if roads, airstrips and vehicles are not properly serviced and maintained to make this extractive industry a success.
On this premise, we shall begin to confront, as well as examine, some of Guyana’s natural resources.
The production of gold has been Guyana’s saviour for many years. We broke the 400,000 ounces barrier and produced 481,087 ounces in 2013. Then, there was the staggering figure of 712,706 ounces last year; all produced by local miners and the two foreign companies: Guyana Goldfields and Troy Mineral Resources.
While one feels compelled to laud such accomplishments, there is one issue at hand which must be addressed. The Private Sector Commission in its National Economic Forum (NEF) 2016, called for a Green Economy, free of mercury. The Minamata Convention on Mercury has set the deadline for compliance at 2020.
How are we to balance preserving our environment versus production? This will be a great challenge for Guyana. The nation will be forced to move to large scale production using Cyanide, as only about 5-10% of the world’s gold is produced by using mercury and Guyana is one of those countries still using significant quantities of this chemical.
Guyana will have to utilize Cyanide as is done by major companies or other means of gold extraction or production.
In the NEF, stakeholders advocated for mobile Cyanide facilities which would seem to lend itself to the new thrust for syndicates in gold or what is considered as Cooperatives.
This is a fragile product and production from a high in the olden days has gone from 400,000 carats when Guyana traded with Brazil to around 100,000 carats to date. Unless serious investors are courted, which is unlikely, Guyana will remain within that framework.
Guyana now has two of the largest bauxite companies in the world operating within its border lines. At Aroaima, there is RUSAL – from Russia producing Metal Grade bauxite MAZ in the Berbice area. That is a most challenging operation, as it involves mining, drying, trucking, barging and assembling at the mouth of the Berbice River for shipping by 40,000 vessels to Ukraine to achieve some 1.5 M tonnes per annum.
But believe it or not, Guyana is actually under-using that developed resource which was constructed by Oldendorff. This is a Guyanese resource developed by Rusal/ Oldendorff but many contend that it should be used to bring in larger vessels and develop a proper port or container port in Berbice, probably overtaking the Georgetown Harbour.
The other major operation is at Linden, the gateway to Brazil. This is operated by BOSAI, the Chinese Company, which produces several grades of bauxite – RASC, AAG, SCGB, CeGB and MAZ. They have done several great things; maintenance and improvement of employment, investment in the environment by constructing two dust collectors and the reintroduction of an apprentice scheme.
However, Guyana should have witnessed the reactivation of the Alumina Plant by now. The challenge for the Chinese has been two-fold; securing their investment by the ore properties and accessing cheaper power, which would have helped the community either by use of LNG or NG when it comes on stream or hydro. This would give the community in Linden a “shot in the arm”.
This is the latest product development through BOSAI of China which has created a new company, Guyana Manganese Inc. This is extremely challenging and is no ‘cake walk’. Mining and processing is the least of the challenges. Officials have since prepared a flow chart which addresses the priorities. These include the road from Matthew’s Ridge to Port Kaituma, a new port at Port Kaituma, barges to move 1,500 tonnes of ore per day, clearing the canal, dredging the mouth for passage, and finally, shipment to either Trinidad or the Berbice River to link with ships to China.
Cooperation with Rusal/ Oldendorff to facilitate such a transfer is vital so that Guyana could better utilize that facility. The company plans to come on stream in the last quarter of 2018 to produce 500,000 tonnes of Manganese concentrate.
There is an abundance of other minerals with which Guyana is endowed with, such as copper, molybdenum, tungsten, quartz, koalinite, rare earths, tantalite, sand, stone, and we can go on. Guyana is actually “a discovery of rare earths”. However, as the Guyana Geology and Mines Commission (GGMC) noted, “the aura of gold has always been heavy over Guyana to a point where little else has been considered”.
OIL AND GAS
Oil and gas is the new kid on Guyana’s economic block. But, in the midst of all the excitement, one should be wary of the massive gift of unbelievable oil and gas from Lisa 1 and 2, Snook, Pyara and now Turbot 1 – some five fields with billions of barrels of oil and trillions of cubic meters of gas.
By Government’s reckoning, Guyana has resources to last more than 50 years. This is a dream come through and the opportunity should be used wisely. There is already, lots of talk about local content, transfer of technology and other opportunities.
But within that conversation, Guyana needs to consider a Sovereign Wealth Fund to put off funds for the proverbial “rainy days.” It is hoped that oil and gas would not be seen as the panacea to solve all of Guyana’s problems.
Oil and gas, instead, should be the ‘gravy’ or ‘topping’, as stakeholders continue with prudent management to make the best of this glorious opportunity. Whatever wealth comes, it should also be used to support and prop up sugar, rice and other products to make them viable.
Furthermore, the best use of our natural gas will be to generate cheap and clean electricity. This will be very transformative to transport, electricity, manufacturing, alumina and more.
At the International Conference in August 2013, energy was seen as the missing element in Guyana’s development. Expensive energy is the single largest barrier to increased manufacturing, value-added processing of agricultural commodities, mechanization of agriculture, large-scale mining and quality of life in Guyana.
However, there seems to be a growing thrust for large-scale solar farms in Guyana. In fact, the Government has organized pilot projects at Bartica and Mabaruma. BOSAI is considering a large-scale solar facility at Matthew’s Ridge. But this is unlikely to be a fully commercial operation. Nevertheless, it allows special applications for hinterland communications. Many have seen this applied successfully at the IT facility operated by Nand Persaud on the Corentyne, as well as at State House. However, it is claimed that over-time, this will be done on a larger scale.
The biggest potential is the proposed project at Hope Beach Wind Farm. Mr. Lloyd Singh of Guyana, who is associated with HZ of China, has executed a study at Hope Beach but is suffering because of the absence of legislation. Despite the challenges, it will have application for coastal locations and our islands in the Essequibo River.