An umbrella body representing Guyana miners urged them at the weekend to take full advantage of soaring world gold prices, but uncertainty about official policies to protect the rainforest in exchange for compensation from Western nations, is sabotaging efforts to increase production, industry officials have said.
World prices jumped to $1,300 per troy ounce as trading on international markets closed last weekend, triggering an appeal from the umbrella Gold and Diamond Miners Association, urging them to do all in their power to increase production in Guyana, where high-priced gold has surpassed sugar as the No.1 foreign exchange earner in the last year.
But Tony Shields, the association’s executive secretary said that a major row with government for most of this year regarding a new set of rules to govern the industry has seriously undermined efforts to meet a 2010 target of 500,000 ounces.
The Bharrat Jagdeo administration has said that the former British colony could earn up to $580M per year from Western nations if it can agree on new rules to protect the rainforest, including forcing miners to wait for six months to allow the timber industry to first harvest trees commercially before the area is opened up for small- and medium-scale miners.
Miners have rebelled against the new rule, contending that timber harvesters will become “overnight miners” if given the opportunity to reach a rich area before regular miners, raising the stakes for potential conflict.
“This row with government has made people very cautious and has affected investments in the industry, but we nevertheless appeal to miners to take advantage of current prices for gold internationally,” Shields said.
Apart from the row with authorities, heavy rains that made some jungle roads impassable and smuggling of nearly half of the gold mined in Guyana, will undermine efforts to reach the association’s target of 500,000 ounces this year. Shields said the target is likely to reach no more than 350,000.
He also said that fellow CARICOM nation Suriname, at Guyana’s southeast, has become the new smuggler’s choice because the state royalty is far less than what miners are forced to pay government as a production tax.
“It is not Brazil, but Suriname, where about 40 percent of all gold mined is being smuggled,” he said. “The figure would be much higher but for the smuggling. But that is the situation,”
Local police have said the soaring prices have contributed to increased criminal activity in the “gold bush” where murders and armed robberies at mining camps have become a feature of daily life.
The association has complained as well that miners from neighboring Brazil, particularly those not operating legally in the country, are victims of daily robberies but they do not complain for fear of compromising their immigration status.