Significant revenue$$$ lost from gold leakages

Jan 17, 2012 News

–new Ministry attempts to harness logging, mining, emerging oil sectors

By Leonard Gildarie

Corruption, the speedy processing of land concessions, and new ways to tackle the under-declaration of gold, were among several critical issues raised yesterday as players in the mining, logging and environmental sectors gathered for a major government-organized discussion.
The meeting, which was coordinated by the newly established Ministry of Natural Resources and the Environment, was a packed one with several diplomats, politicians, Amerindian leaders and government department heads gathered at the Kings Plaza on Main Street, Georgetown.
The new Ministry is now tasked with overseeing forestry, mining, environmental management, wildlife protected areas, land use planning and coordination and climate change – areas that once fell under different Ministries.

Stakeholders at the National Stakeholders’ Consultations.

While President Donald Ramotar who was scheduled to be present was unable to attend, newly-appointed Minister Robert Persaud explained that stakeholders’ conference was critical to moving the Ministry forward and addressing overlapping issues.
Under previous arrangements, it was explained, players in the industry were burdened with addressing some of their matters to several ministries, leading to frustrations and time wasting.
The idea of a single Ministry is to address this fallout but because of the complex task of merging or harmonizing the sectors, it was decided that stakeholders will have to be consulted.
According to Persaud, it is the intention to also fully include the Amerindians in an inclusive manner to improve and modify a ministry that will definitely be one of the most dynamic and among the most challenging.
Leakages
Last year, the gold sector recorded declarations totally 363,083 ounces of gold, about 14 per cent above target. It is believed that almost as much as 600,000 ounces of gold may be leaking from the system and Guyana continues “to be plagued by the issue of under-declaration.”
With gold trading for over US$1,644 for one ounce, this translates to Guyana losing out from taxing almost $78B (US$389M) or at least $4B in taxes and royalties.
Questioned as what could be done, the Minister suggested that because the mining sector is pretty small, there is the belief that most persons in the community are aware of what is happening and could play a role in ensuring compliance. Under regulations, mined raw gold can only be sold to licensed dealers, including the state-controlled Guyana Gold Board.
Last year also, Persaud disclosed, bauxite declarations were 1.7M tonnes, reflecting a four per cent increase over the previous year with both Bosai and Rusal, the two bauxite companies operating in Region Ten, promising increased investments in coming months.
Growth has also been reflecting in the quarrying sector which showed a 22 per cent increase. This was mainly driven by a booming construction sector locally as well as overseas demands.
However, diamond production has been going downwards because players have been concentrating more on the gold rush.
According to the Minister, REPSOL is getting ready to drill. A rig is on the way for CGX Energy, with Guyana knowing in a matter of months whether there is oil that could be harvested in commercial quantities in the off-shore concessions granted to those companies.
It is the intention of government to establish a mining school in Linden.
Yesterday, there were calls to establish an independent investigative unit to investigate wrongdoing by mines’ officers and others.
Value-added
Dominic Gaskin, a jeweler and senior official of the Alliance For Change, urged the new Ministry to examine the possibilities of mechanisms that would ensure stakeholders move more to value-added processing, including refining.
There were also suggestions for policies that would encourage the use of felled trees for fuel, and excavated earth from mining for even ceramic production.
Senior executive of the A Partnership For National Unity (APNU), Dr. Rupert Roopnaraine, who was among those present, called for more attention to be placed on Amerindian lands demarcation.
It was disclosed yesterday by Minister Persaud that the process is an expensive one costing as much as $30M per Amerindian village to be processed.
According to officials, the majority of disputes between miners and others involve lands not demarcated or issued as concessions. Several matters are now before the courts.
One of the suggestions to reduce the possibility of under-declaration of gold was the intense monitoring of number of chosen mercury distributors. This could help gauge the amount of gold being produced.
There were complaints also of the long and sometimes frustrating process of processing mining claims and other applications.
Security
The issue of security was also raised with concerns expressed over several incidents of robberies and murders. It was pointed out that while originally police outposts were established in a number of mining areas, other concessions have been opened up and there may now be a need to place more ranks from the police and army personnel in troubled spots.
Former head of GGMC, William Woolford, who was also among those present, called for a preparation of data that will clearly tell investors what lands are available.
According to Minister Persaud, Guyana is moving to have 17 per cent of available areas be protected, in line with international agreements. With the recent declaration of a number of areas declared protected, including Kaieteur National Park, Shell Beach and the Kanuku Mountain, this figure is around nine per cent.
There were also suggestions yesterday to include water management under the new Ministry.
Regarding road conditions, more focus was also urged.
The new Ministry now will be responsible for the Guyana Forestry Commission, the Guyana Geology and Mines Commission, Guyana Gold Board, Guyana Lands and Surveys Commission, Wildlife Management Authority, Environmental Protection Agency, National Parks Commission and the Guyana Protected Areas System.