Notation about the products Guyana Produces and has to offer for both local and foreign markets:
In addition to its well-known deposits of gold, diamonds and bauxite, Guyana’s mineral heritage includes occurrences of industrial minerals such as kaolin, silica sand, soapstone, kyanite, feldspar, mica, ilmenite, columbite-tantalite, and manganese; base metals such as copper, lead, zinc, molybdenite, tungsten, and nickel; ferrous metals, of which iron as magnetite and laterite is the main type; uranium; and semi-precious stones such as amethyst, green quartz, black pearl, agate and jaspar.
Historically gold production has, almost exclusively, been from alluvial and eluvial deposits. More recently, however, the large open pit at Omai Gold Mines Limited has considerably increased the country’s gold production. Indeed, while gold declarations from local producers have been maintained at approximately 110,000 ounces per year, Omai produces, on average, approximately 300,000 ounces per year. Gold continues to be Guyana’s highest value export commodity.
Gold was first produced in Guyana by “porknockers” using hand mining methods which revolved around ground sluicing, the long tom and the battel or gold pan. This method was later supplemented and to an extent mechanized with the introduction of couple jet dredges which had the capability of mining the river bottoms under the guidance of aqualung equipped divers. Couple jet units have now been largely superseded by the remote controlled, diver-less gravel pumps or missile dredges, which possess the capability to mine deeper channels and river banks, and to explore river-bottoms more efficiently. However, because the river beds are becoming exhausted, a larger percentage of the local production is increasingly derived from land dredges, which work large pits in fossil placers, terraces and eluvial/saprolite hosted deposits.
There is only one established, locally-owned and operated, open pit hard rock gold mine in Guyana which employs blasting, crushing and gravity recovery circuits. In this system spent ores are being stockpiled for additional treatment at a later date.
Omai Gold Mines Limited is the only large scale open pit, hard rock mine now operating in Guyana. It is controlled by the Canada based Cambior Inc. and the USA based Golden Star Resources Ltd., with the Guyana Government holding a 5 percent equity interest. There are other large scale hard rock gold deposits in Guyana: Marudi Mountain in the South Savannah, Eldorado in the Kaburi Area, Peters Mine in the Potaro, Eagle Mountain in the Mahdia area and Tassawini, Mariwa and Aurora in the Cuyuni; they are not, however, currently operational.
Diamonds were first reported in 1887 from the Puruni River Area and in 1890 from the Putareng River. Diamond production, mainly from the Mazaruni River Basin, peaked in the 1920s with over 200,000 carats being annually declared. The diamond sector has however been in decline since about 1970 and, in the last five years, the annual declaration of diamonds has been only about 35,000 carats.
Most diamonds are found in fluviatile environments either on the 25,000 square kilometres Roraima Plateau or within twenty five kilometres of the escarpment. Some diamondiferrous gravels are also located at distances of as much as 150 kms from the Roraima rocks. In such cases they are associated with the deposits of the White Sand series which are thought to be derived from the erosion of the Roraima sediments.
The diamonds produced in Guyana are eminently cuttable octahedras and rounded dodecahedras; the production tends to be about 60 percent gems, 10 percent near gems and 30 percent industrials; the average stone size is 10 to 13 points; and the average value tends to be about US$100.00 per carat. While resources of the order of millions of carats are postulated, the relative remoteness and inaccessibility of the diamond fields, the lack of roads, power and labour, and the relatively small stone size and value, render most of this resource sub-economic at this time.
Bauxite was first produced in Guyana in 1917. Until 1971, the industry was totally owned by two major North American integrated multinationals, Alcan and Reynolds. However, the Alcan subsidiary, Demerara Bauxite Company (DEMBA), and the Reynolds subsidiary, Reynolds Berbice Mines, were nationalised in 1971 and 1975, respectively.
For the ten years immediately following its nationalisation, the industry experienced a period of reasonable success. During that time, production increased, positive net income was recorded, and substantial contributions were made to the nation’s economy in the form of dividends, corporation taxes, employment, and export earnings. The industry, however, entered a period of steep decline after 1981 and, by 1991, was technically bankrupt. Efforts by the Government to obtain international institutional financing for its revival led to a commitment to its privatisation.
A condition of the financing, which was received from the World Bank to improve its performance before divestment, was the dissolution of Guyana Mining Enterprise Limited (Guymine) which owned and managed the entire industry, and the establishment of two separate companies – Linden Mining Enterprise (Linmine) and Berbice Mining Enterprise (Bermine) centred around the two operating divisions of Guymine, with Linmine being placed under foreign management and an Initial Reconstruction Programme (IRP), while Bermine continued under local management.
The IRP did not achieve the expected results: the production of refractory bauxite (RASC), the pillar or the programme, fell continuously over the next five years and, with falling prices, resulted in a worsening of the company’s financial position. It was therefore decided by the management that the market for the company’s only product, refractory bauxite (RASC), had deteriorated to the point where the company was no longer a viable entity.
Attempts to privatise Linmine in 1996 on a piece-meal basis, with the core activity, the production of refractory bauxite, being offered to interested parties, evinced little interest. The government therefore decided to give the entity a grace period of 5 years to become profitable. If profitability was not attained it was to be either sold or abandoned. Since its performance had not improved, the Government, at the end of September 1998, decided to advertise the company again for privatisation, with a view to completing the process by the end of 1999. However, by the end of March 2000, there were no offers to take over the company. Linmine’s fate is therefore still to be decided.
Bermine’s performance after the re-structuring was also indifferent. Although the company recorded a positive net income in 1993, it made considerable losses over the next three-year period. And even though it recorded a small profit in 1997, and shows prospects of becoming viable, that company also had been identified for privatisation with the same schedule as Linmine. In 2000, a tentative offer for a merger with Bermine was put forward by the Aroaima Bauxite Company, (ABC) which is the third bauxite company existing in Guyana. This offer was rejected by the government. A foreign company has since expressed an interest in entering into a partnership with Bermine but no decision has as yet been made on this matter.
The two producing companies comprising the state sector control considerable bauxite reserves and installed production capacity which are currently under-utilised. While much of the capacity is in a poor state of maintenance, resulting in the effective capacity being significantly below the installed capacity, some of this capacity could be restored with relatively low levels of carefully planned and executed capital investments.
Both state-owned companies own production facilities, which, in their current state of maintenance, are not capable of operating anywhere close to their rated or installed capacity.
The third company, ABC, is owned jointly by the Government of Guyana and Reynolds Bauxite Company. The equity in ABC, which was established in 1989, is shared on a 50:50 basis. ABC pays neither taxes nor duties. It has never distributed any dividends.