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Diamond mining pursued as gold price remains unstable
Diamond production on the local market is increasing as the price of gold remains unstable on the world market. There is a possibility that this year’s diamond production could surpass the projected target of 60,000 karats.
This is according to Derrick Babb, Manager of Mines of the Guyana Geology and Mines Commission (GGMC) during a recent interview with this publication. From observation, whenever the price of gold is low, miners tend to move towards diamond mining, he related.
Babb pointed out that a few years ago when gold price was high on the international market numerous diamond miners ventured into gold mining. This had resulted in a decline in diamond production.
For instance, during the first half of 2010, gold production had recorded an increase of 8.1 percent. However, the surge in gold production came at the expense of diamond production. In fact, there was a physical migration of mining activities from diamonds to gold, resulting in a 59.5 percent decline in declaration of diamonds for that period.
But, with the present dip in the price of gold on the world market, miners have returned to diamond mining.
Babb stated that at the end of July last, diamond miners declared 38,504 karats, while for the same period in 2013; diamond miners had declared 37,000 karats. The projected target for 2013 was 40,000 karats. The total declaration for that year was 55,928 karats.
According to Patrick Harding, President of the Guyana Gold and Diamond Miners’ Association, diamond is predominantly mined in the Upper Mazaruni area. Even though, diamond is more difficult to mine than gold, miners have returned to diamond mining owing to the low gold price.
He explained that there is a greater financial risk involved in mining diamonds since these precious stones are found in pockets while gold is scattered over a greater area.
He related that miners are required to declare their production since Guyana is part of the Kimberly Processing Certificate Scheme.
The Kimberley Process Certification Scheme (KPCS) is the process established in 2003 to prevent “conflict diamonds” from entering the mainstream rough diamond market by United Nations General Assembly Resolution 55/56 following recommendations in the Fowler Report. The process was set up “to ensure that diamond purchases were not financing violence by rebel movements and their allies seeking to undermine legitimate governments.
Harding said that miners have to fill out a work sheet that shows where the diamond is from as well as the owner and district, to prevent illegal diamonds from entering the market.
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