GGMC needs to release lands to small miners – GGDMA

The Association, in a press statement, made it clear that many persons can acquire lands that are without any minerals or with occurrences too low to ensure viability.

“We therefore wish to refine the request of the small scale miners to be: the need for land with proven occurrences of minerals. The solution to this issue is obvious, especially to us in the sector who have struggled to build up from small entrepreneurs to professional miners today.”

See full release below:

The Guyana Gold and Diamond Association (GGDMA) welcomes the recent suggestion by His Excellency President David Granger that more land must be made available for small miners in the industry. The GGDMA notes that this has always been an area of concern and more specifically not just the availability of land, but land with known occurrences of minerals and accessibility.

The association makes this distinction since many persons can acquire lands that are without any minerals or with occurrences too low to ensure viability. We therefore wish to refine the request of the small scale miners to be: the need for land with proven occurrences of minerals.

The solution to this issue is obvious, especially to us in the sector who have struggled to build up from small entrepreneurs to professional miners today. We are sure that His Excellency has already been advised that more than 2,000 medium scale permits have been relinquished within the last year alone due to falling gold prices and the high cost of holding lands thus forcing many persons to abandon their properties. The Guyana Geology and Mines Commission (GGMC) is well aware of the number of lands that have been relinquished for one reason or another, while the information regarding how many large scale land packages and small claims have also been relinquished over the last year is not included here, it is worth noting that the quantity of mineralized land abandoned in the medium scale category alone amounts to over 2,000,000 acres of land.

This more than two million acres is the ideal land for small scale miners, since these are more likely to bear fruitful prospects. The GGDMA therefore calls for urgent action and keen attention to ensure that the real estate agents who lurk in the sector do not get access to these lands before the genuine miners can have an opportunity to make effective use of the land. The current mechanism through which these lands return to the closed area system or surreptitiously revert to the hands of agents offers an ample opportunity for the government to intervene and facilitate the genuine small miners. These are the lands which must be made available not held in an indeterminate state.

Mining is a business and many who just rushed into operation, when the price of gold was at a record high, have discovered what many who have been in the industry for years have always known. Gold mining is not a hobby or a get rich quick scheme. It is a daily struggle to venture into the unknown, to pry from the land the precious few minerals and to sometimes risk it all on a single pit or claim. It is a partnership between genuine miners and the state. There are those who are motivated by vested interest and real estate schemes, who are bent on making a quick flip of mineral properties; then there are the genuine miners. The latter we represent.

Miners have been going into the interior since the early 1960’s and many now have operations which started small and through hard work and forward planning, as is the case in other business sectors, have made mining a family business. Many professional miners did not acquire land via a “land grab” over the last few years when gold prices sky rocketed, but rather acquired much of their lands during the 1990s and early 2000s when many were leaving the sector due to the meager price of gold at US$200 to US$350/oz. It must be recognised that these were very lean and difficult times in the gold and diamond mining sector when those who stayed in the industry had sleepless nights as they constantly teetered on the brink of bankruptcy in order to keep their operations. Yet, they persevered in the sector despite all of their trials, continuing to contribute to our nation’s GDP, creating jobs and providing our country a means to continue earning foreign currency through exports. Over the last decade, many who acquired lands also did so at hefty prices paid to GGMC, in excess of billions of dollars at public auctions.

The continued investment and sense of security in the industry has always been vested in continued land tenure and a right to invest and plan for the future. The GGDMA notes with great fear the recent messages in the press which seem to indicate that some are bent on “reorganizing” the sector to benefit those who now wish to make a quick fortune rather than mine.

The GGDMA wonders, if there was increased interest in investing in certain other commodity sectors where there are also limited lands and licenses, what would be the proposals by these persons?:

• What would be the outcome should the same “reorganization” be applied to the other industries such as Timber, Fishing/ Shrimping and even Rice?
• Will land be taken from Rice Farmers, Timber and Bauxite Concessionaires?
• Should those who have made long term investments and conducted astute stewardship be uprooted to satisfy the demand of new entrants and persons with vested interest?
• Will there be an arbitrary reallocation of legally held lands, titles, concessions and permissions?

The talk of redistribution of land at the expense of private sector investment should not even be entertained, the days of nationalization should be well behind us and support for keen and genuine national investors should be embraced and supported, not questioned and threatened. The setting of such a dangerous precedent would not only be deleterious to the local private sector, but would hurt prospects of foreign investments; such developments would no doubt give such investors reason for pause and hinder monetary flows into our country.

Briefly consider the historical case of our cantankerous neighbor to the west, Venezuela. Under the present regime inaugurated by the late President Hugo Chavez, the expropriation of farmland was a hallmark policy central to his “revolution” designed to ensure that the poor would have lands to work, spur increased production and end the dependence on food imports. While this may have started as a policy of good intentions, today even the blind can see the cataclysmic end results.

Venezuela is much poorer and weaker than it was a decade ago, there are widespread food shortages throughout the country and serious crime continues to rise; the very policy that was supposedly crafted to lead to national food security and wealth creation for the poor has had the complete opposite effect, spiraling that nation to the brink of anarchy.  

No one will invest the typical sum of more than $50 million dollars to start up a medium scale mining operation without being sure that tomorrow the whims and fancies of some whispering consultant with past grievances and vengeances will result in the taking away of properties and its redistribution to someone “more deserving.”

The GGMC has more than enough land locked off which can be distributed to small scale miners, this must be urgently addressed. The more than two million acres of returned lands is more than adequate to satisfy this need and one does not even need to dip into the state reserves at this time. However, it is key to ensure that it is not parceled off to the real estate agents with no intention of engaging in mining activities or any proven track record of contributing to the sector by way of infrastructural investment and production.

The GGDMA also recognizes that there has been a traditional symbiotic relationship between professional mining companies and small operators. Many small operators do not have the means to setup a full-fledged operation and depend on a partnership agreement to get started in the industry. Venturing to the local banks is, most often, not an option for such persons as the risks associated with the gold and diamond mining industry are too volatile for the banks to sanction loans to participants in the sector.

However, professional miners understand and appreciate the risks involved and take on this exposure by assisting new comers and small operators with putting in infrastructure, providing capital, spares, fuel and credit facilities that allow them to continue plying their trade. Most of the current members of the GGDMA got their “feet wet” through this method. We find that this offers a good mechanism to ensure that opportunity is given to those with genuine interest and not enough startup capital.

The area of concern is not the existence of such relationships, but the structure of the relationship that must ensure fair terms to all parties involved and the legal enforceability of the terms of this relationship so that there is a sense of longevity and security. To this end there needs to be a well-crafted and formal partnership agreement. This has already been discussed with the GGMC and a proposal to have it established via mining regulations, to ensure protection of both parties, is already in the works and should be accelerated.

The Guyana Gold and Diamond Miners Association will continue to work hand in hand with the new administration to address all of the aforementioned issues and do what it has been doing for over 30 years: strengthening and fortifying the Guyana gold and diamond mining industry and fighting for the rights of ALL legitimate miners.

The Association would like to work with the GGMC on refining the definition of a small miner to ensure that it is clear who can benefit from any new mechanism and thereby ensure the survival of the industry. We also call on the GGMC to strengthen its public education program to ensure that persons understand how land is acquired and the mechanisms available to them.

This program must be extended to the media and all others who pronounce on the sector as we find a lack of proper understanding and rampant misadvise is adding to speculation that will be detrimental to the future of our beloved industry. Once again, we take this opportunity to remind all miners to only sell their gold to the Guyana Gold Board or Licensed Dealers and request a receipt with each transaction.