Central Bank blames small-scale miners for decline in gold declarations

Jan 05, 2023 News

– says Guyana Goldfields increased by 130%

Kaieteur News – The Guyana Goldfields Inc, a China-led mining company, has recorded a whopping 130.1 percent increase in declarations during the third quarter of 2022.

This information is contained in the Bank of Guyana’s Third Quarter Report for 2022. The document explains that, “Output in the gold subsector declined by 2.0 percent on account of lower declarations by small and medium scale miners by 10.0 percent.” Notwithstanding this, it was noted, “Guyana Goldfields, the sole operating foreign company, declarations increased by 130.1 percent during the review period.”

The Report did not specifically state the amount of gold that was declared. Guyana Goldfields was a Canadian company that owned and operated the Aurora gold mine in Guyana. The company was later acquired by Zijin Mining in 2020.

Guyana’s Finance Minister, Dr. Ashni Singh during the 2022 budget speech he made in January had disclosed that small and medium scale miners had produced more gold in 2021 than all of the large-scale operators.

His exact words were “the combined output from the large operators declined by 31.7 percent in 2021 to 68,268 troy ounces.” Zijin Mining Inc. is one of foreign companies currently conducting large-scale mining in Guyana. The minister did not reveal how much of the 68,000 ounces of gold was produced and declared by the Chinese company but the amount is meagre when compared to the over 400, 000 ounces declared by small and medium scale miners.

Zijin had bought the Aurora Gold Mines (AGM) in August 2020, from its previous owners, Guyana Gold Fields, a Canadian owned company, for C$323M. It also benefitted from the same contract that the Canadian company had signed with Guyana – one that allows the company the luxury of duty-free concessions on fuel and equipment. The contract also gives Zijin the authority to determine how much royalties Guyana gets paid for its gold and this is because it has the privilege to choose a buyer for its gold.

Despite the calls of the Extractive Industries Transparency Initiative (EITI) for Government to release large-scale mining contracts, government is yet to make these documents public.

Since becoming a member of the global body, the EITI report notes that the Government agreed to adhere to several requirements. In this case, EITI requirement 2.4 (a) of the 2019 Standard states that Guyana should publicly disclose all mineral agreements entered into force prior to the reporting period, in this case, 2019. Although the requirements are known to the Administration, it continues to make excuses in avoiding the release of these contracts.

Vice President Bharrat Jagdeo had committed to publishing the contracts while appearing on ‘The Glenn Lall Show’, a radio programme aired on Kaieteur Radio, back in September last year. He said, “I can undertake to find out with you there, what provision the GRA is so cagey about that it doesn’t want to release… I will undertake that anything that is non-propriety that you get it released. I will personally now see that this happen.”