Corruption in gold mining sector under scrutiny

Corruption in gold mining sector comes under scrutiny

MAY 16, 2012 | BY  | By Leonard Gildarie

 …local consortium proposes refinery

An age-old practice by holders of large and medium scale exploratory permits to allow illegal gold mining has drawn fire from government quarters.
During a luncheon in celebration of the 30th anniversary of the Guyana Gold Board (GGB), Natural Resources Minister, Robert Persaud, said it is a major issue being tackled by his newly established Ministry.

Some of the companies involved in the illegal act are prominent ones and the guilty parties could very well face sanctions and see the seizure of the Prospecting Licence, Persaud warned yesterday during a session with reporters and stakeholders at the Sleep Inn Hotel on Brickdam.

According to Persaud, there is clear evidence, via written agreements and otherwise, of the illegal actions.  
In most cases, it is the Brazilian miners who are allowed to operate on the exploratory concessions, thanks to the facilitation of the permit holders. The practice has been ongoing for some time now and it is clear that the companies, “clearly not fly by night ones”, are encouraging the illegality, Persaud said.
The admission of this latest reported illegality would come weeks after government announced a crackdown and raids on camps in the hinterland to stop illegal mining.

Several infringements, including poor records, environmental problems and absence of working permits were found. The raids will continue, the Ministry announced last week.

Also at the luncheon yesterday were Chairman of the GGB, Gobind Ganga, General Manager, Anantram Balram, and several board members.

370,000 OUNCES
According to Ganga, while annual declared declaration of gold between 2007-2010 was 276,000 ounces, last year this went up to 363,084 ounces. Average earning during that period was over US$247M but this doubled to US$517M last year.

This year, the target has been set to 370,000 ounces, the Chairman disclosed, noting that GGB is continuing to examine its policies in a growing sector.
Meanwhile, in his presentation, Minister Persaud admitted that the GGB is limited in its reach throughout Guyana, with offices currently only in the city and Bartica, Region Seven. Plans are in place to establish offices in Port Kaituma, Region One, and Charity, Region Two. An office at Lethem, Region Nine, a border point to Brazil, is also being considered.

The gold board, which is responsible for the buying of 75% of the gold declared across Guyana, is now looking to halt what is called leakages…gold being produced and not being declared so as to evade taxes. Then, there is also the smuggling. Authorities estimate that between 150,000-300,000 ounces of gold is slipping through the cracks annually, although it is difficult in the absence of hard facts.

There are also plans to tackle this by increased monitoring, meetings and even talks with the neighbouring countries over border control.
According to Persaud, government is also considering a proposal for a gold refinery that was submitted by a local consortium. Guyana is currently selling its gold to the Royal Canadian Mint and Mitsui Global Precious Metals.

A study to identify the problems in the gold mining sector is being commissioned, the Minister disclosed. The idea is to identify the problems and establish proposals to deal with these.
Meanwhile, Persaud yesterday expressed concern over reports of some level of dishonesty and accountability at the GGB, stressing the matter is being placed on the table since it is a national issue and should not be covered up.
Overall, the gold sector is very promising, with US$400M in investments likely for an operation at Toraporu, Region Seven, a project that is likely to be larger than the Omai Gold Mines.

The Aurora gold project, Region Seven, is also likely to see a US$600M investment while the Mahdia Gold Corp is expected to sink millions into the Omai area.

Yesterday, the Minister, while admitting the problem of illegal mining with non-nationals and especially Brazilians, pointed out that they have brought modern technology, with the extraction process being vastly improved.
However, he warned, regulations must be followed and everyone, including Brazilians, have to comply.

Already, authorities through the Guyana Geology and Mines Commission (GGMC) have seen a rise in the number of Prospecting Licences being granted and moves are underway to process 1,200 claim applications.

Also read:-

Brazilian miners forced to pay up to $200,000 for work permits


Brazilians are being forced to pay thousands of dollars in bribes for  workpermits with government yesterday admitting that it is probing several reports of bribe-taking.    [more]

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  • needybad4u  On 05/17/2012 at 5:47 am

    Gold Corruption
    by Leonard Dabydeen

    Tell me nuh
    ah who ah tief
    de gole :
    one han’ ah shake de basket
    de nex han’
    ah full pocket;
    gole digga
    nah get kinnah-
    anyting you get
    is bettah than notting;
    sometimes two tief
    ah mek Gad laff
    and one man trash
    is a nadda man treasha
    is dat wha mek
    dankee a laff
    so loud.

  • Cyril Balkaran  On 05/17/2012 at 7:22 am

    The question of illegal gold mining in the Gold Industry has been there with the Industry since its inception. The lack of proper monitoring systems by the GB has led to false declarations, tax evasions and the large foreign work force on site at the gold fields. The coastal Guyanese residents have not been thinking of the experiences of a gold rush etc, they do not want to get malaria, and snake bites. They prefer to be unemployed that to trace the fabled city of Eldorado! The prominent explorers must have a labour force and they will welcome anyone. The lack of work permits and liscences for prospecting are only the tip of the Iceberg. Millions more of the illegal gold can be trapped as the GB seeks to put their house in order. Gold is Gold and those who ran the Omai Plant for over 15 years know what the GB does not know. If the security systems to moniter extraction of the raw stuff and the delivery to the plant or to the scales then anything other than accountability can happen. The Gold so produced must find its way to the GB, this is the Law but does this ever happen? The stuff goes to Brazil, Venezuela and elsewhere and so the statistics that are released by the GB is far from what obtains at the production sites. That is why the raids must be itensified and continue around the clock. $400m US may sound a nice figure but the lack of records by the established companies speak volumes for this Gold Mining Business. Together we can stop the Hemorrhage from this most lucrative gold industry. Over to the GB!

  • needybad4u  On 05/17/2012 at 1:28 pm

    Tell me nuh…ah who a tief de gole…

  • Cyril Balkaran  On 05/18/2012 at 8:38 am

    The GGMC is about to process 1200 applications for Prospecting in the Gold mines in Guyana. To have greater control of the illegal gold mining business it can be that a policy of Guyanese nationals only will be considered eligible for this type of Liscences. The presence of so many Brazilians in this field is displacing our nationals. Can we consider a quota system for the Brazilians? This may reduce the amount of gold that is unaccounted for. It will also prevent those who process the documents from the temptation to take money to issue those permits. The GB need to set up offices in Bartica also.

  • Dr. Olivia  On 05/19/2012 at 6:33 am

    What about foreign companies that are exploiting gold in Guyana and sending it back to the US and Canada. The Guyanese Gold industry and other resources are being exploited by foreign companies form the US. So just don’t look at Guyanese at least it’s their country but what about the exploitation of resources that are leaving Guyana to go elsewhere to develop other countries which in turn exploit us. Not just Brazil. Seems like the government could point fingers at Brazil but scared to tell the bigger countries anything.

  • Dr. Olivia  On 05/19/2012 at 6:42 am

    It is not only Guyanese and Brazilians who are stealing gold, big companies from the US and Canada are also ripping off the country. However, because they are big the government is afraid to monitor their operations. Guyana is being exploited of its natural resources because we fall prey easily to large companies from the US and other countries who show us some modern equipment and take control of our resources. Everyone taking a piece of the pie one day the pie would finish and the pie takers would turn back and make you buy your own pie from them.

  • Cyril Balkaran  On 06/24/2012 at 5:55 am

    The world’s tenth leading Gold Exploratory Company “IAMGOLD” is operating in Suriname and has been influencing the final outcomes of Gold Production in that country. The Royalty paid on gold in Suriname is 2.5% as opposed to 5% that miners and gold producers must pay for gold in Guyana. This may explain why the smuggling of Guyana Gold to Suriname where the royalty figures are lower. The lack of documentation and other records by the established miners in Guyana, speak volumes as accountability is lacking and the big ones get away. The total annual ouncage of gold is far from that which is desirable. The Suriname production for 2011 by both small and medium producers record $US 914 million for some 19,000 ounces of raw opposed to $US 400 million that the Guyana Gold Board Realized. This is the tip of the Iceberg! Step up your raids on the illegal gold mining and control the granting of Liscences to the bigger Companies, Canadian, US and otherwise. Gold is the commodity whose values increase over time, there should be no rush to steal and smuggle our gold under the watchful eyes of the Guyana Gold Board! Get tough and confiscate the equipment of those Companies that are caught in the illegal niceties of the Mining Operations.

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