Mining in Guyana

Mining is a significant contributor to the economy of Guyana, owing to sizable reserves of bauxite, gold, and diamonds.[1] Much of these resources are found in Guyana's Hilly Sand and Clay belt, a region that makes up 20% of the country.[2]

Gold

In 2012, export receipts for gold amounted to US$1.5 billion, nearly half of the country's total export receipt value.[3] All gold mined in the country must be sold to the Guyana Gold Board, and sent abroad for refining at the Royal Canadian Mint.[4] The gold mining industry is made up of small and medium-scale operations that support as many as 12% of the population.[5]

In the 16th century, European explorers were drawn to the Guianas due to rumors of a golden city called Manoa, ruled by the golden king El Dorado. This legend instigated settling of the region, but it wasn't until the 1840s when gold was found in significant quantities.[6] After emancipation, small-scale gold mining was untaken by many newly-freed Afro-Guyanese, who still make up a significant portion of the modern mining industry. Also known as pork-knockers, these artisanal gold and diamond miners have created or been a part of the folklore in Guyana.[7]

In 1904, Peters Mine was the first mine opened in Guyana. From 1904 to 1909, it produced 39,800 ounces of gold (approximately 0.8 oz. per ton of ore), and in 1915 to 1916 produced another 1,103 ounces. Surveys conducted by U.S. geologists were favorable, but the mine was abandoned largely due to its inaccessibility.[8] Nonetheless, it remained the biggest mining operation in Guyana until Omai Mine was opened in 1993. Peters Mine was obtained in 1996 by Guyana Goldfields.[9]

Government initiatives have favored domestic gold mining operations, such as the 1989 Mining Act which encouraged many small-scale mining companies.[5] When Omai Mine closed in 2005 it was ten years until the openings of two large-scale open pit mines in 2015: Aurora gold mine, a Canadian-owned operation[5] and Troy Resources.[10]

Guyana has not been immune to many of the struggles typical of resource rich countries. The price of gold attracts workers away from agriculture labor for quick gains, the result of which can have a detrimental effect on Guyana's overall economy.[5] Boomtowns are often plagued with issues related to prostitution and excessive violence.[5][11] Abandoned pits that accumulate water have become vector points for disease such as malaria and dengue.[10]

Gold smuggling is a perennial issue. In 2016, the Minister of Natural Resources said that "approximately 15,000 ounces of gold is being smuggled from Guyana each week" with the possibility that gold from Columbia or Venezuela is also smuggled through the country's porous borders.[12] Smugglers often go to Suriname to sell gold due to lower taxation of 1% tax and 2% royalty, compared to Guyana's 2% tax and 5% royalty.[5] Brazil and the USA are also major destination points of smuggled gold.[12] In 2012, US$11.5 million of gold was seized in Curacao.[5]

Despite government enacting a ban on the use of mercury, it is still used for gold extraction by small-scale operations.[10] A 1995 cyanide spill associated with large-scale gold mining at Omai Mines caused significant damage to the eco-system of the Highland region.[2]

Bauxite

Guyana's mines yield a high quality calcined bauxite, with uses in the refractory, abrasive and chemical markets for high temperature applications. Guyana's reserves of bauxite was known to be 350-million-tons. Major mining sites are at Linden, south of Georgetown, and Kwakwani on the Berbice River[6][13] In 2016, 1,479,090 tonnes of bauxite was produced.[14]

Bauxite mining began in 1914[15] and took off in the 1920s with substantial investment from large-scale, foreign operations such as Demerara Bauxite Company (Demba) owned by Canada's Alcan, and Reynolds Bauxite Company owned by Reynolds Metals of the USA.[6] Bauxite production in the 1960s was around 3 million tons per year and by the early 1970s, the two companies made up 45 percent of the nation's foreign exchange earnings.[15] After Guyana's independence from Britain, there was a political shift towards large nationalizing these large, foreign-owned industries, but the resulting government run industries suffered from poor management, commodity price fluctuation, and global competition. Production fell to 1.3 million tons by 1988.[15]

When privatization was used to improve economic prospects, majority shares were purchased once again by foreign companies. In 1985, Reynolds Bauxite Company was one of the first foreign companies to return, providing managerial assistance to Guymine at Kwakwani.[1]

Omai Bauxite Company, owned by Canadian IAMGOLD, was bought in 2007 by BOSAI, a Chinese company.[16] The other major mine in Berbice, formerly Aroaima Mining Company, is owned by Bauxite Company of Guyana Inc., a subsidiary of Russian-owned Rusal. The government maintains part ownership in both companies, 30% of Omai and 10% of Bauxite Company of Guyana.

First Bauxite Corporation made plans to develop mining at Bonasika in the Essequibo River,[17] which after delays from lack of financing, started operations in 2020.[18]

Increases in bauxite production have led to bauxite dust air pollution in the Linden area by the facility.[19]

Labor disputes have been a major issue[17][20] and US sanctions relating to Russian involvement in the 2016 elections.[21]

Aluminum

Guyana had one alumina plant, for separating aluminum oxide from raw bauxite ore, but it closed in 1982 due as a result of "inefficient management, declining world prices for bauxite, and prolonged strikes by workers". Prior to closure, production was about 300,000 tons processed per year.[1]

Diamonds

Guyana does not have a significant diamond cutting industry so nearly all exports are rough diamonds. In 2013, rough diamond exports totaled at US$12 million (144,000 Carats).[4] The industry is mostly made up of medium-scale operations that use land dredging techniques[6] however, diamond mining has been on the decline. Historical production totals are difficult to produce due to the high rates of smuggling due to factors similarly affecting the gold industry.[22]

Diamond mining techniques are very similar to that of gold mining processes, so there is a substitution effect between gold and diamonds based on the commodity price.[10]

Other minerals

Other minerals that are mined in smaller scale include silica sand, shells, kaolin, semi-precious stone, and stone aggregate.[23][24]

Petroleum
Main article: Petroleum exploration in Guyana

In 2015, a major off-shore oilfield was discovered by Esso Exploration and Production Guyana Ltd. (a subsidiary of ExxonMobil of the United States, 45%; Hess Corporation of the United States, 30%; and CNOOC Ltd. of China, 25%). The Liza oilfield discovery was considered to be one of the biggest crude petroleum finds of the decade. In 2016, ExxonMobil announced Esso has discovered additional high-quality oil-bearing sandstone resources in the offshore Stabroek Block of the oilfield.[25]

Major Production Overview
Mining production, 2009-13[26]
2009 2010 2011 2012 2013
Gold (kg) 9,325.8 9,542.9 11,293.4 13,643.7 14,963.8
Bauxite (tonnes) 1,448,000 1,010,000 1,827,000 2,210,000 1,694,000
Diamond (carats) 143,900 49,900 52,300 40,700 55,927

Important Organizations
  • Guyana Geology and Mines Commission (GGMC)
  • The Guyana Gold Board
  • Guyana Gold and Diamond Miners Association (GGDMA)
  • Guyana Bauxite and General Workers’ Union (GB&GWU)

References
  1. "Mining". countrystudies.us. U.S. Library of Congress. Retrieved April 11, 2016. ...Guyana was known to have sizable reserves of bauxite, gold, and diamonds.
  2. Gafar, John (2003). Guyana: From State Control to Free Markets. Nova Publishers. ISBN 978-1-59033-647-2.
  3. Lucas, Rawle (2013-04-19). "Misplaced attitude (Final)". Stabroek News. Retrieved 2020-11-28.
  4. "Developing a jewellery sector in Guyana". Stabroek News. 2014-07-11. Retrieved 2020-11-28.
  5. Hilson, Gavin; Laing, Tim (2017-02-01). "Guyana Gold: A Unique Resource Curse?". The Journal of Development Studies. 53 (2): 229–248. doi:10.1080/00220388.2016.1160066. ISSN 0022-0388.
  6. Colchester, Marcus (2002). Mining and Amerindians in Guyana. Ottawa, Ont.: North-South Institute. pp. 8–9. ISBN 1-896770-44-4.
  7. "The porkknocker contribution to Guyanese culture". Stabroek News. 2014-08-31. Retrieved 2020-12-18.
  8. Conde, Carlos (1966-12-15). "$5.5 Million in Gold Ore Awaits Mining by Prospectors in Guyana". San Bernardino Sun. Copley News Service. Retrieved 2020-12-19.
  9. "Peters Mine". mininglifeonline.net. Retrieved 2020-12-19.
  10. "Toward the Greening of the Gold Mining Sector of Guyana: Transition Issues and Challenges | Publications" (PDF). publications.iadb.org. Retrieved 2020-11-30.
  11. "Guyana's gold rush turns dangerous". The World from PRX. Retrieved 2020-11-30.
  12. "Around 15,000 Ozs gold smuggled each week - Trotman". Stabroek News. 2016-01-07. Retrieved 2020-11-30.
  13. "Guyana - MINING". countrystudies.us. Retrieved 2020-12-02.
  14. "Mining". GO-Invest. 2013-03-25. Retrieved 2020-12-02.
  15. "Guyana - HISTORY OF THE ECONOMY". countrystudies.us. Retrieved 2020-12-02.
  16. "Outcome of BOSAI Alumina plant feasibility study due early next year". Stabroek News. 2008-03-15. Retrieved 2020-11-28.
  17. "New investments in Guyana's bauxite industry". Stabroek News. 2012-04-20. Retrieved 2020-11-28.
  18. "First Bauxite commissions US$100M Bonasika mine". Stabroek News. 2020-02-21. Retrieved 2020-11-28.
  19. "Bauxite dust problem at Linden triggers EPA intervention". Stabroek News. 2008-03-21. Retrieved 2020-11-28.
  20. "Change in gov't but justice still elusive, dismissed BCGI workers say". Stabroek News. 2016-02-07. Retrieved 2020-11-28.
  21. "Gov't concerned at impact of US sanctions on Rusal". Stabroek News. 2018-04-11. Retrieved 2020-11-28.
  22. "Guyana - THE ECONOMY - Structure". countrystudies.us. Retrieved 2020-12-02.
  23. Munslow, Barry (2019-06-04). Guyana: Microcosm of Sustainable Development Challenges. Routledge. ISBN 978-0-429-76345-8.
  24. Vieira, Rickford (2014-09-09). "Alternative Minerals - Potential for Guyana (Part 1)" (PDF). Guyana Geology and Mines Commission. Retrieved 2020-11-30.
  25. Szczesniak, Philip A. (2016). "The Mineral Industry of Guyana" (PDF). USGS. Retrieved 2020-12-02.
  26. "TRADE POLICY REVIEW" (PDF). World Trade Organization. 2015-07-28.
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