What is really responsible for the sterling performance of the Gold sector?
Over the years, Guyana’s traditional sectors or revenue earners have taken turns in leading the growth rate of the economy.
For 2016, under the guidance of the prudent APNU+AFC government, gold has taken the baton from rice and sugar and now stands out as the leading performer of the economy. In fact, the sector has made history with its record-breaking performance.
But what is responsible for this outstanding performance?
Is it government’s implementation of greater policies and stricter regulations?
Could it be that more small and medium-sized operations are declaring more gold?
Or is it the introduction of two large gold producing companies?
Let’s take a look at the performance of the small and medium-sized operations in the gold sector over the years and their contributions to the gold sector.
The PPP regime without question has a longstanding record of working closely with the gold mining sector over the years, including during the period from 1997 to 2002 when gold prices fell as low as US$253 per ounce.
In addition, the support of that administration to the sector has included significant investments in hinterland infrastructure and a favourable fiscal regime.
These and other factors have enabled gold declaration to reach historic levels over the years. Take the period of 2009 for example which saw more than 800 small to medium sized operations with individual productions ranging from 20 to 20,000 ounces, employed directly about 10,000 persons.
In the period of 2009, declarations of raw gold increased by 14.7 percent to 299,822 ounces, the highest level of non-Omai gold declarations ever achieved in any one year.
Newsroom understands based on statistics provided by the Ministry of Finance, that buoyed by lucrative world market conditions and substantial investments in the sector, gold declarations in 2010 increased by 2.9 percent which translates to 308,438 ounces. This exceeds the record set in 2009 to become the highest level of gold output in any one year by small and medium scale miners at that time.
In 2011, there was a 17.7 percent increase in raw gold declarations to 363,083 ounces. In 2012, gold production reached 438,645 ounces. The gold industry achieved total declarations of 481,087 ounces in 2013, thereby representing a 9.7 percent increase above the production figures of 2012.
These were the performance levels of the gold sector prior to the start-up of companies such as Troy Resources and Guyana Gold Fields.
In fact, the former Finance Minister, Dr. Ashni Singh had noted that the companies were poised for operation in late 2014.
He said that collectively, these injections of Foreign Direct Investments are anticipated to increase production significantly, along with industrial and commercial linkages, which together bode well for Guyana’s economy on the whole.
However, Minister of Natural Resources, Raphael Trotman feels differently.
For the year 2016, he said that the Ministry of Natural Resources projected a gold declaration target of 550,000 ounces, which when calculated, is a 21.8 % increase of the previous year’s target.
He said, “I am pleased to report that to date, we have surpassed that target and gold declaration stands at an unprecedented 641,668 ounces. This is a remarkable achievement for our country – the highest gold declaration figure in a calendar year and thus far.”
The Minister of Natural Resources said that this large declaration earned the country USD$ 730,915,229. He stressed however that small and medium scale miners delivered 429, 188, while Guyana Goldfields and Troy Resources delivered 145,236 and 67,244 ounces respectively.
Trotman said that this means that the small and medium scale miners delivered close to 70% of the total.
The Minister said that he would be remiss if he did not recognize the tireless efforts of the Boards and staff of the GGMC and the Guyana Gold Board in ensuring that the government achieves this mammoth declaration.
He said, “I would like to use the opportunity to reiterate that our gold projection target for the year 2017 is set at 694,000 ounces. It is a difficult, but not impossible, target to reach, but as I said recently, we Guyanese are a resilient people with a can-do attitude.”
Trotman said that the Ministry of Natural Resources will exert all of its energies to meeting this target not solely because the Minister of Finance, Winston Jordan has requested it, but more importantly, because the people of Guyana need the government to do so.
The Minister said that he is confident that the sector can achieve this target as the Ministry expects that all categories of gold declarants will continue to grow.