Mining sector earns 50% of Guyana’s foreign exchange

Jan 24, 2009 News

…drilling for oil to commence this year – PM

Yesterday, in an overview of the mining sector, Prime Minister Samuel Hinds reported a creditable performance for 2008, but said that the global recession will more than likely have an impact on the industry.

A river dredge in the interior of Guyana

He noted that gold declaration for 2008 rose to 260,387 ounces, raking in some US$214.5M, given that the price on the world market was some US$800 per ounce.

Diamond declaration did not fare as well as gold, according to the Prime Minister, who told media operatives that the declaration for 2008 as it relates to the precious was some 100 carats less that the previous year. The figure for 2008 was 168,925 carats.

Bauxite did record a decent yield, in that there was a total of $81.3M revenue earned from the bauxite sector.

Stone, with a production of 460,000 tonnes, which represented a 50 per cent increase in the projection for 2008, earned US$11.67M; whilst sand earned the Government some US$3.4M. The production of sand was 605,000 tonnes, some of which was exported.

He said that the price of fuel has reduced drastically from that all-time high of US$147 per barrel, and this has reduced the cost of production.

He said, however, that given the unpredictability of the recession, it was difficult to make an accurate projection for 2009; but he did point out that the price for gold on the world marking was stable.

In seeking to emphasise the importance of the industry as it relates to the projections for 2009, factoring in the economic projections, the Prime Minister pointed out that the industry directly employed some 15,660 persons.

He added, too, that the industry also indirectly caused employment for an additional 10,000, which meant that some 100,000 citizens, or 13 per cent of the population, benefited, given that the employed persons had families to care for.

According to Hinds, during this year, the focus will be on the small to medium term mining operations. He lamented that the demand for diamond is falling, which is adding to the uncertainty of the future. He noted that, this year, there will be a 50 per cent cut in prospecting exploration which had earned the country some US$24M in 2008

As it relates to the bauxite industry, the Prime Minister’s projection was less than favourable, given that the industry was under pressure, according to Hinds. As such, the bold plans that the bauxite companies had projected some two to three years ago would have to be scaled down. He did note that BOSAI was still intent on constructing the alumina plant it proposes to.

As it relates to petroleum exploration, several seismic 3D surveys have been completed by companies holding prospecting licenses, and these companies have indicated an intention to commence drilling by year end.

And commenting on what is seen by some as an invasion of Brazilian nationals of the mining industry in Guyana, the PM pointed out that the figure in some circles was exaggerated, and that the actual amount of miners in Guyana was no more than 3000, and the majority of them were working on plots owned by Guyanese.

He said, too, that the Brazilians have also contributed significantly, in that they have brought technology to the country which has allowed for a more effective extraction of the natural resources from the earth. He pointed to a case in Kurupung where the introduction of the Brazilian-made and designed Lavador managed to resuscitate mining in that locale and brought the community back to life.