Blame it on the rain! – Govt. blames rain, outdated mining practices for declining gold production

Aug 21, 2024 News

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Kaieteur News – Minister of Natural Resources, Vickram Bharrat, has attributed the steady decline in gold production and declaration over recent years to a combination of unfavourable weather conditions, outdated mining practices, and labour shortages.

Speaking at a recent press conference, Bharrat outlined the challenges facing the gold mining sector and the efforts being made to address them. This publication had reported that from 2019 to 2023, gold declarations dropped by approximately 209,000 troy ounces, according to the Bank of Guyana annual reports. Recently, the government had warned gold smugglers to desist from the practice.

During his recent press conference, Minister Bharrat pointed out that gold production has been on a downward trend since its peak in 2016. “I don’t think it’s any secret that gold production has been at the decline. I think if you look at the chart, you will see 2016 peak, and then after that, it went straight up and continues in the 2022-2023,” Bharrat said. He highlighted that several factors have contributed to this decline, particularly severe weather conditions.

“In 2021 and 2022, there was significant flooding, not only on the coast, but the hinterland communities. I myself went into the Mazaruni district, and I saw the devastation of the flooding in that major mining district,” Bharrat explained.

He added that in 2023, the industry was hit by a significant drought, which hindered operations in key mining areas. “Some people were unable to go and work simply because there was no water,” he noted. The minister noted that the situation has reversed again in 2024 with another bout of significant flooding, further complicating mining activities.

Bharrat also highlighted issues related to the mining practices of small and medium-scale miners, noting that many have been repeatedly mining the same properties resulting in low recovery rates. “The other reason being, which we have noticed, and I think it was mentioned by the commissioner, is that for decades, our small and medium-scale miners have been mining the same properties over and over again,” the minister said.

“[Small and medium-scale miners] recovery rate in gold mining is too low, 35-40% is way too low,” he stated. The ministry is working with miners to introduce new methods and technology to increase recovery rates, which Bharrat believes will lead to higher production and profitability.

In addition to technical challenges, the minister pointed to the accessibility of mining lands as a significant barrier for small miners. “Accessibility to land has always been a cry from small miners,” Bharrat said, stressing the need for more prospecting to ensure mineralized properties before investment.

Labour shortages in the mining sector are another growing concern. Bharrat noted that many miners are moving away from the industry, often shifting to more lucrative opportunities in the oil and gas or construction sectors.

“What we have seen is a lot of people moving from the mining sector into the oil and gas or construction sectors, or they are engaged in other sectors while they’ve scaled down their activities in the mining sector,” Bharrat explained.

Despite these challenges, Bharrat affirmed that the Guyana Geology and Mines Commission (GGMC) is actively working to address the issues, particularly by increasing recovery rates and improving access to mining lands.

Recently, Kaieteur News reported that the Bank of Guyana (BoG) has reported that the country’s gold declaration decreased within the first three months of 2024.

According to the Central Bank, the declaration fell to 89,845.8 troy ounces, when compared to the same period last year. It was stated that the dip in the gold declaration was mainly due to lower declarations from small- and medium-scale miners by 24.2 %.  It was explained that the lower declaration is as a result of prolonged dry weather which made access to water limited in many mining areas.

Notably, it was stated that the sole large-scale operator, Aurora Gold Mine Inc. (AGM), Zijin Mining’s, recorded an increase in declarations by 5.2%, which resulted from continued favourable performance in their underground mining operations.

In Guyana’s gold industry, there has been a noticeable decline in declarations over the past several years.  Kaieteur News had reported that from 2019 to 2023, gold declarations dropped by approximately 209,000 troy ounces, according to the BOG annual reports.

With Guyana’s gold declarations dropping by approximately 209,000 troy ounces over the past five years, Vice President Bharrat Jagdeo expressed the Government of Guyana’s concern about this trend.  He had warned that strict penalties would be imposed on those found guilty of under-reporting gold declarations to evade taxes and royalties. Jagdeo said at one of his previous press conferences, “We are still very concerned about what is happening in the market,” adding, “We believe that there are people that are not selling to the Gold Board to avoid taxes and we believe at that time that it was organised and that it was having an impact.”

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• gold, Minister of Natural Resources, practices, production, Vickram Bharrat

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