GGMC should not remain a liability to Guyana’s tax payers

Jan 03, 2013 Letters

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DEAR EDITOR,
The banning of mercury exports by the United States came into effect on January 1, 2013 (SN, Dec 2012). This followed the EU ban in March 2011. The mining industry could be faced with much higher costs on the procurement and importation of elemental mercury. The way the Guyana Geology and Mines Commission (GGMC) is structured would not allow for any real change and to ensure much safer recovery methods for the Small Mining Enterprises in mining.
The GGMC is a self-financing arm of government and responsible for regulation and enforcement of mining in Guyana. The GGMC collects rents, fees, charges, levies, etc. payable under the Mining Act. The GMCC does not pay any taxes on its income and, if it is income-deficient, tax payers will have to foot the bill under the Act.
In 2011, Guyana registered less than 6,000 kilos of gold from its mines, considerably less than the nearly 19,000 kilos registered in Suriname over the same period. The Guyanese authorities believe that they see only one-third of their actual gold production due to smuggling. (SN. July 17, 2012).
This would suggest that Suriname is far more effective in regulation and enforcement and, ensuring that all gold production is declared and, also stamping out illegal gold mining and smuggling. However, the GGMC remains content to enjoy tax-free income, in the knowledge that its future is safe and secure and tax payers will have to foot the bill if and when they fail.
This age-old remit of the GGMC should not be allowed to continue at a cost to hard-pressed tax payers. The country has already paid a heavy price, when the Essequibo River was poisoned by Omai Gold Mines Ltd and the Guyana government, as a shareholder. Some 800 million gallons of cyanide-contaminated water ended up in the Essequibo River in August 1995. There is now the risk of mercury contamination of the rivers.
Mercury is said to be a potent neurotoxin affecting the brain and nervous system. Children, pregnant women and fetuses are all very sensitive to the adverse impacts of mercury. The World Health Organization has recognized this danger in 1991, when it concluded that there are no safe levels of mercury exposure that have ever been established below which no adverse effects occur.
Toxic mercury poisoning is also known as Minamata disease – the neurological syndrome first discovered in the Japanese city of Minamata in 1956. Nearly 1,800 people have died from the disease.
According to available statistics for 2000, Guyana was the main target importer from the UK of elemental mercury of 9.25 metric tons.  By 2004, the US replaced UK and supplied 27.0 metric tons. (Source: UNDESA/ESD/UNSD Comtrade Statistics – April 11, 2006). In 2012, the annual purchase volume of just 3 purchasers of liquid mercury in Guyana was put at some 50 metric tons. (Tradex, Dec 2012).
To put the figures into context, China has a population of over 1.3 billion, and they currently consume an estimated 200 tons of mercury annually for gold mining. This type of mining is said to be illegal but ever-enticing to low-income people in the countryside and, in response to the high value of gold. (Natural Resources Defense Council – 2007).
China is the world’s No. 1 gold producer and it saw its output rise again in 2012.  The country produced a record 360.96 tons of the yellow metal in 2011, a 5.9% increase, making it the world’s top gold producer for a fifth consecutive year, according to  the China Gold Association. China’s gold production continues to grow. In Jan to May 2012, China’s reported gold production reached 115.6 tons for the 5-month period.
Further, estimates have suggested that China’s total gold imports for 2011 will have been some 490 tons – double that of 2010, but this may well be an under-estimate, possibly a substantial one.
China’s gold reserves stood at 1054 tons in 2008 – and this was nearly double the amount previously reported five years earlier at 600 tons. These could now well be at 2,000 tons or more – but even this is said to be a small fraction of China’s total monetary reserves. Central Bank of China has been hinting that “No asset is safe now,” and “The only choice of hedging risks is to hold hard currency – gold.”  (Mineweb, Feb 1, 2012).
The demand for gold is likely to increase significantly in the foreseeable future as China takes steps to safeguard the economic interests of its people and, without the widespread use of mercury.
Based on the figures, China consumed around 0.15 metric tons of mercury per each million of her population. In comparison, Guyana consumes an estimated 50 metric tons of mercury with less than 1 million people. This would imply that China is a far safer place than Guyana, when it comes to facing exposure to the risks of mercury poisoning and contamination.
A Minamata should not be left lurking and waiting to happen due to incompetence of the GGMC. The country should not be left exposed to another Jonestown, where the politicians were quick to deny any knowledge about its existence and, where cyanide poison was easily available to cause the loss of some 900 innocent lives in 1978.
Mac Mahase

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