Mining in Guyana

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Mining in Guyana is a significant contributor to the economy owing to sizable reserves of bauxite, gold, and diamonds. [1] Much of these resources are found in Guyana's Hilly Sand and Clay belt, a region that makes up 20% of the country. [2]

Contents

Gold

In 2012, export receipts for gold amounted to US$1.5 billion, nearly half of the country's total export receipt value. [3] All gold mined in the country must be sold to the Guyana Gold Board, and sent abroad for refining at the Royal Canadian Mint. [4] The gold mining industry is made up of small and medium-scale operations that support as many as 12% of the population. [5]

In the 16th century, European explorers were drawn to the Guianas due to rumors of a golden city called Manoa, ruled by the golden king El Dorado. This legend instigated settling of the region, but it wasn't until the 1840s when gold was found in significant quantities. [6] After emancipation, small-scale gold mining was undertaken by many newly-freed Afro-Guyanese, who still make up a significant portion of the modern mining industry. Also known as pork-knockers, these artisanal gold and diamond miners have created or been a part of the folklore in Guyana. [7]

In 1904, Peters Mine was the first mine opened in Guyana. From 1904 to 1909, it produced 39,800 ounces of gold (approximately 0.8 oz. per ton of ore), and in 1915 to 1916 produced another 1,103 ounces. Surveys conducted by U.S. geologists were favorable, but the mine was abandoned largely due to its inaccessibility. [8] Nonetheless, it remained the biggest mining operation in Guyana until Omai Mine was opened in 1993. Peters Mine was obtained in 1996 by Guyana Goldfields. [9]

Government initiatives have favored domestic gold mining operations, such as the 1989 Mining Act which encouraged many small-scale mining companies. [5] When Omai Mine closed in 2005 it was ten years until the openings of two large-scale open pit mines in 2015: Aurora gold mine, a Canadian-owned operation [5] and Troy Resources. [10]

Guyana has not been immune to many of the struggles typical of resource rich countries. The price of gold attracts workers away from agriculture labor for quick gains, the result of which can have a detrimental effect on Guyana's overall economy. [5] Boomtowns are often plagued with issues related to prostitution and excessive violence. [5] [11] Abandoned pits that accumulate water have become vector points for disease such as malaria and dengue. [10]

Gold smuggling is a perennial issue. In 2016, the Minister of Natural Resources said that "approximately 15,000 ounces of gold is being smuggled from Guyana each week" with the possibility that gold from Columbia or Venezuela is also smuggled through the country's porous borders. [12] Smugglers often go to Suriname to sell gold due to lower taxation of 1% tax and 2% royalty, compared to Guyana's 2% tax and 5% royalty. [5] Brazil and the USA are also major destination points of smuggled gold. [12] In 2012, US$11.5 million of gold was seized in Curacao. [5]

Despite government enacting a ban on the use of mercury, it is still used for gold extraction by small-scale operations. [10] A 1995 cyanide spill associated with large-scale gold mining at Omai Mines caused significant damage to the eco-system of the Highland region. [2]

Bauxite

Guyana's mines yield a high quality calcined bauxite, with uses in the refractory, abrasive and chemical markets for high temperature applications. Guyana's reserves of bauxite was known to be 350-million-tons. Major mining sites are at Linden, south of Georgetown, and Kwakwani on the Berbice River [6] [13] In 2016, 1,479,090 tonnes of bauxite was produced. [14]

History

Upper Demerara-Berbice region in Guyana Upper Demerara-Berbice in Guyana.svg
Upper Demerara-Berbice region in Guyana

Bauxite mining began in 1914 [15] and took off in the 1920s with substantial investment from large-scale, foreign operations such as Demerara Bauxite Company (Demba) owned by Canada's Alcan, and Reynolds Bauxite Company owned by Reynolds Metals of the US. [6] The first bauxite mine in the Upper Demerara-Berbice region opened in 1916. [16] At that time, Guyana was still the British colony known as British Guiana. [17] Aluminium became an important resource during the First World War as it was a key material to make aircraft, and so the global demand for bauxite increased, leading companies to expand development in Guyana. [18] The British government was unwilling to allow Alcan to own the bauxite mines in Guyana because the United States was in control of the Canadian company. [17] The British government was unsuccessful at preventing Alcan from legally owning the bauxite mines in Guyana due to the United States government threatening to cease providing Britain with weapons needed to fight in the war. [17] The British Aluminium Company (B.A.C.) acquired leases to develop bauxite mines on the Christianburg land in Linden following World War I, in order to compete with Demba, who at the time, had control of the majority of bauxite in Guyana. [17] In 1949, the B.A.C's leases were transferred to the Plantation Bauxite Company Ltd. and then transferred to Demba in 1957. [17]

Bauxite production in the 1960s was around 3 million tons per year and by the early 1970s, the two companies made up 45 percent of the nation's foreign exchange earnings. [15] After Guyana's independence from Britain, there was a political shift towards nationalizing these large, foreign-owned industries. [15] The government of Guyana nationalized Demba in 1971. [16] However, the resulting government-run industries suffered from poor management, commodity price fluctuation, and global competition and production fell to 1.3 million tons by 1988. [15]

When privatization was used to improve economic prospects, majority shares were purchased once again by foreign companies. In 1985, Reynolds Bauxite Company was one of the first foreign companies to return, providing managerial assistance to Guymine at Kwakwani. [1]

Omai Bauxite Company, owned by Canadian IAMGOLD, was bought in 2007 by BOSAI, a Chinese company. [19] The other major mine in Berbice, formerly Aroaima Mining Company, is owned by Bauxite Company of Guyana Inc., a subsidiary of Russian-owned Rusal. The government maintains part ownership in both companies: 30% of Omai and 10% of Bauxite Company of Guyana.

First Bauxite Corporation made plans to develop mining at Bonasika in the Essequibo River, [20] which after delays from lack of financing, started operations in 2020. [21]

Aluminum

Guyana had one alumina plant for separating aluminum oxide from raw bauxite ore, but it closed in 1981 as a result of "inefficient management, declining world prices for bauxite, and prolonged strikes by workers". [1] [22] Prior to closure, production was about 300,000 tons processed per year. [1]

Environmental impacts

Increases in bauxite production have led to bauxite dust air pollution in the Linden area by the facility. [23]

Bauxite mining has impacted the rainforests and other habitats in Guyana through deforestation, habitat fragmentation, and soil degradation. [18] Bauxite exports increased by 400% in Guyana during the Second World War, and so the environmental consequences became more severe due to the expanding industry. [18] Tropical forests were cleared to create new mines and the Bayer process left behind red mud and air pollution. [18]

The natural environment of the community Coomacka (Kumaka) in Upper Demerara-Berbice has been altered by bauxite mining. [22] The construction of bauxite mines required sand to be cleared from the land, which eventually led to the formation of a sand beach by the Demerara River. [22] The sand beach has increased flooding in Coomacka. [22]

Bauxite plant in Linden, Guyana Linden bauxite plant.jpg
Bauxite plant in Linden, Guyana

The mining companies did not implement restoration measures for the natural environment after bauxite mines were closed in Linden, and so pit lakes exist in areas where open pit mines used to be. [24] Pit lakes can have negative impacts on groundwater. [24] In 2018, some pit lakes in Linden were found to have higher levels of aluminium, manganese, and iron, and they were found to be acidic. [24]

Social impacts

The population of Upper Demerara-Berbice in 1960 was 17,553, with 38% of the people being local, and the other 62% having migrated to the area to seek work at the bauxite mines. [16] The MacKenzie area of Upper Demerara-Berbice was socially and physically divided based on race during colonial rule of British Guiana. [17] In 1960, about 74% of the white population resided in South MacKenzie, and 98% of the Black, brown, and mixed populations lived in North MacKenzie. [16] The Demba company determined where the residents could live. [16] The white population in South MacKenzie had larger houses that were built better and had sewage systems, whereas the houses in North MacKenzie were smaller and rarely had indoor bathrooms. [17] The majority of non-manual jobs in MacKenzie were held by the white population, leaving the non-white population to have the lower-paid manual jobs. [16]

The unequal working and living conditions the Black, brown, and mixed people of MacKenzie faced resulted in the formation of the British Guiana Labour Union (B.G.L.U.) in 1944. [16] 1,900 workers were fired after the efforts to unionize in 1944. [16] A 64-day strike in 1947 led to the union gaining official recognition, but this time under the British Guiana Mineworkers Union (G.M.W.U.). [16] From 1962 to 1970, there were 47 strikes at Demba by the G.M.W.U. One notable strike was in 1964 when 3,000 employees went on strike for a week in response to a white employee calling the Afro-Guyanese workers "cannibals". [16]

The 1981 closing of the Alumina Plant in Linden directly resulted in 1,600 people losing their jobs. [22] By the 1980s, bauxite production had decreased, with around 600 workers being a part of the bauxite industry in Linden. [22] Bauxite mining was the main industry in Linden, and so the reduction of bauxite mining led to many workers having to find employment outside of the city. [22]

In 2009, 57 employees of the Bauxite Company of Guyana Inc. were fired for participating in a strike to campaign for higher wages and better workers' rights. [25] The employees who were a part of the strike were unable to seek employment at other bauxite mines due to their participation. [25]

US sanctions relating to Russian involvement in the 2016 elections has created issues. [26]

Diamonds

Guyana does not have a significant diamond cutting industry so nearly all exports are rough diamonds. In 2013, rough diamond exports totaled at US$12 million (144,000 Carats). [4] The industry is mostly made up of medium-scale operations that use land dredging techniques [6] however, diamond mining has been on the decline. Historical production totals are difficult to produce due to the high rates of smuggling due to factors similarly affecting the gold industry. [27]

Diamond mining techniques are very similar to that of gold mining processes, so there is a substitution effect between gold and diamonds based on the commodity price. [10]

Other minerals

Other minerals that are mined in smaller scale include silica sand, shells, kaolin, semi-precious stone, and stone aggregate. [28] [29]

Petroleum

In 2015, a major off-shore oilfield was discovered by Esso Exploration and Production Guyana Ltd. (a subsidiary of ExxonMobil of the United States, 45%; Hess Corporation of the United States, 30%; and CNOOC Ltd. of China, 25%). The Liza oilfield discovery was considered to be one of the biggest crude petroleum finds of the decade. In 2016, ExxonMobil announced Esso has discovered additional high-quality oil-bearing sandstone resources in the offshore Stabroek Block of the oilfield. [30]

Major Production Overview

Mining production, 2009-13 [31]
20092010201120122013
Gold (kg)9,325.89,542.911,293.413,643.714,963.8
Bauxite (tonnes)1,448,0001,010,0001,827,0002,210,0001,694,000
Diamond (carats)143,90049,90052,30040,70055,927

Important Organizations

Related Research Articles

The transport sector comprises the physical infrastructure, docks and vehicle, terminals, fleets, ancillary equipment and service delivery of all the various modes of transport operating in Guyana. The transport services, transport agencies providing these services, the organizations and people who plan, build, maintain, and operate the system, and the policies that mold its development.

<span class="mw-page-title-main">Economy of Guyana</span>

The economy of Guyana is one of the fastest growing economies in the world with a gross domestic product (GDP) growth of 19.9% in 2021. In 2024, Guyana had a per capita gross domestic product of Int$80,137 and an average GDP growth of 4.2% over the previous decade. Guyana's economy was transformed in 2015 with the discovery of an offshore oil field in the country's waters about 190 km from Georgetown, making the first commercial-grade crude oil draw in December 2019, sending it abroad for refining.

<span class="mw-page-title-main">British Guiana</span> British colony from 1814 to 1966

British Guiana was a British colony, part of the mainland British West Indies. It was located on the northern coast of South America. Since 1966 it has been known as the independent nation of Guyana.

<span class="mw-page-title-main">Demerara</span> 1745–1803 Dutch colony in South America

Demerara is a historical region in the Guianas, on the north coast of South America, now part of the country of Guyana. It was a colony of the Dutch West India Company between 1745 and 1792 and a colony of the Dutch state from 1792 until 1815. It was merged with Essequibo in 1812 by the British who took control. It formally became a British colony in 1815 until Demerara-Essequibo was merged with Berbice to form the colony of British Guiana in 1831. In 1838, it became a county of British Guiana until 1958. In 1966, British Guiana gained independence as Guyana and in 1970 it became a republic as the Co-operative Republic of Guyana. It was located around the lower course of the Demerara River, and its main settlement was Georgetown.

<span class="mw-page-title-main">Berbice River</span> River in eastern Guyana

The Berbice River, located in eastern Guyana, is one of the country's major rivers. It rises in the highlands of the Rupununi region and flows northward for 595 kilometres (370 mi) through dense forests to the coastal plain. The river's tidal limit is between 160 and 320 km (99–199 mi) from the sea.

<span class="mw-page-title-main">Demerara River</span> River in Guyana

The Demerara River is a river in eastern Guyana that rises in the central rainforests of the country and flows to the north for 346 kilometres until it reaches the Atlantic Ocean. Georgetown, Guyana's largest seaport and capital, is situated on the east bank of the river's mouth. The river divides Essequibo Islands-West Demerara on the west bank from Demerara-Mahaica to the east.

<span class="mw-page-title-main">Linden, Guyana</span> Town and regional capital in Upper Demerara-Berbice, Guyana

Linden is the second largest city in Guyana after Georgetown, and capital of the Upper Demerara-Berbice region, located at 6°0′0″N58°18′0″W, altitude 48 m (160 ft). It was declared a town in 1970, and includes the communities of MacKenzie, Christianburg, and Wismar. It lies on the Demerara River and has a population of 27,277 as of 2012. It is primarily a bauxite mining town, containing many mines 60–90 m deep, with many other pits now in disuse.

<span class="mw-page-title-main">Upper Demerara-Berbice</span> Region of Guyana

Upper Demerara-Berbice is a region of Guyana, bordering the regions of Essequibo Islands-West Demerara, Demerara-Mahaica and Mahaica-Berbice to the north, the region of East Berbice-Corentyne to the east, and the regions of Potaro-Siparuni and Cuyuni-Mazaruni to the west.

Kwakwani is a mining and logging village on the Berbice River in the Upper Demerara-Berbice Region of Guyana. Its altitude is 44 metres (147 feet). Kwakwani is approximately 100 km south of Linden. In 1942, the Berbice Bauxite Company opened a Bauxite Mining in the area which is the main industry of the village. The population as of 2012 is about 2,504 people.

Ituni is a village in the interior of Guyana, at an altitude of 100 metres (331 feet). The area grew as a result of bauxite mining in the area.

<span class="mw-page-title-main">Potaro River</span> River in Guyana

The Potaro River is a river in Guyana that runs from Mount Ayanganna area of the Pakaraima Mountains for approximately 255 km (158 mi) before flowing into the Essequibo River, Guyana's largest river. The renowned Kaieteur Falls is on the Potaro.

<span class="mw-page-title-main">Mahdia, Guyana</span> Town and regional capital in Potaro-Siparuni, Guyana

Mahdia is a town in Guyana, located near the centre of the country at an altitude of 415 m (1,362 ft).

The Railways of Guyana comprised two public railways, the Demerara-Berbice Railway and the Demerara-Essequibo Railway. There are also several industrial railways mainly for the bauxite industry. The Demerara-Berbice Railway is the oldest in South America. None of the railways are in operation in the 21st century.

Guyana Power and Light (GPL) is a publicly owned utility company in Guyana, providing electric power in the country. Domestic voltage can be 110 or 220 depending on the area, both 50 and 60 cycle power. Services are provided from Charity to Moleson Creek, including the islands of Leguan and Wakenaam in the Essequibo River.

<span class="mw-page-title-main">Mining industry of Ghana</span>

The Mining industry of Ghana accounts for 5% of the country's GDP and minerals make up 37% of total exports. Gold contributes over 90% of the total mineral exports. Thus, the main focus of Ghana's mining and minerals development industry remains focused on gold. Ghana is Africa's largest gold producer, producing 80.5 t in 2008. Ghana is also a major producer of bauxite, manganese and diamonds. Ghana has 20 large-scale mining companies producing gold, diamonds, bauxite and manganese; over 300 registered small scale mining groups; and 90 mine support service companies. Other mineral commodities produced in the country are natural gas, petroleum, salt, and silver.

St. Cuthbert's Mission is an Amerindian village on the Mahaica River in the Demerara-Mahaica region of Guyana. It comprises approximately 200 households. St. Cuthbert's is regarded by many people in Guyana as the "cultural capital" for Amerindians.

The Toroparu mine is estimated to be one of the largest gold mining projects in Guyana. The mine is located in the north-west of the country in Cuyuni-Mazaruni. The mine has estimated reserves of 6 million oz of gold.

The Omai Gold Mine is located in Guyana on the north coast of South America near the west bank of the Essequibo River in the interior of the country. Access to Omai is by road from the capital of Georgetown on the coast, and from the town of Linden approximately 60 km away. There is an operational airstrip on site which can accommodate aircraft from Georgetown. Gold mining at Omai is known from at least the 1880s, and when it was developed as a large scale mine in 1992 by Cambior, the mine was the largest gold mine in the Guiana Shield and a major source of income and employment in Guyana. During the period from 1992 – 2005, Omai produced 3.7 Moz of gold at an average grade of 1.5 g/t Au from the Fennell and the Wenot open pits.

Pork-knockers are freelance Guyanese prospectors who mine for diamonds and gold in the alluvial plains of the Guyanese interior. Pork-knockers have been responsible for discovering large deposits of gold and diamonds. The name "pork-knockers" refers to their regular diet of pickled pork of wild pig that is often eaten at the end of the day. Caribbean author A. R. F. Webber suggested that the term may have originated as "pork-barrel knocker".

References

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  3. ↑ Lucas, Rawle (2013-04-19). "Misplaced attitude (Final)". Stabroek News. Retrieved 2020-11-28.
  4. 1 2 "Developing a jewellery sector in Guyana". Stabroek News. 2014-07-11. Retrieved 2020-11-28.
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  9. ↑ "Peters Mine". mininglifeonline.net. Retrieved 2020-12-19.
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  11. ↑ "Guyana's gold rush turns dangerous". The World from PRX. Retrieved 2020-11-30.
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  14. ↑ "Mining". GO-Invest. 2013-03-25. Retrieved 2020-12-02.
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  20. ↑ "New investments in Guyana's bauxite industry". Stabroek News. 2012-04-20. Retrieved 2020-11-28.
  21. ↑ "First Bauxite commissions US$100M Bonasika mine". Stabroek News. 2020-02-21. Retrieved 2020-11-28.
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  23. ↑ "Bauxite dust problem at Linden triggers EPA intervention". Stabroek News. 2008-03-21. Retrieved 2020-11-28.
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