Presentation for the_minister-mining_development_in_guyana2
1. Extractive Industry Opportunities in Guyana
Hon. Robert M. Persaud, MBA, MP
Minister of Natural Resources and the Environment
PDAC International Convention, Trade Show &
Investors Exchange – Mining Investment Show
March 4–7, 2012, Toronto, Canada
Metro Toronto Convention Centre – South Building
2. Overview
Guyana’s principal wealth are the natural resources both inland and
offshore along with its forest and the assets therein. The Government have
been able to sustainably manage our forests to derive economic benefits for
the economy and create livelihood opportunities for our people while at
the same time maintaining one of the lowest rates of deforestation in the
world.
In doing so we have also created a new economic opportunity through
avoided deforestation (REDD+) for which Guyana is one of the first
countries to be paid. This administration will continue to focus on
expanding and diversifying the economy on the basis of rationale use of
Guyana’s natural resources.
To facilitate this effort, the Ministry of Natural Resources and the
Environment (MoNRE) have responsibilities for
forestry, mining, environmental management, wildlife, protected
areas, land use planning and coordination, and climate change.
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3. Prospects for Increase
Investment
The mining sector has recorded a historically remarkable year as the price for
gold increased tremendously and more than 350,000 ounces of gold was the
declaration for 2011. The sector is set to take off over the next few years as four
mineral agreements were inked between international investors with access to
international markets already in place for the country’s minerals.
Several companies have signed a partnership agreement for a large scale
mining operation which has the potential of contributing approximately
US$550M annually to Guyana’s Gross Domestic Product as an additional
250,000 to 300,000 ounces of gold are to be realized annually.
Various mining areas including the aurora mines located in the Cuyuni River,
Region 7 will be developed at a cost of US$1B by foreign investment (in
particular Canadian companies) as an accord to see the investment was inked
during the year. The construction phase of this project will provide job
opportunities for an estimated 900 Guyanese and the ongoing exploration
component will see more than 1,000 men and women being employed.
Iron Ore
Manganese
Rare Earth Elements in the Southern and North Central part of Guyana
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4. Physical Performance and Projections
for the Extractive Industry
Large Scale Prospecting Licences issued in 2011 were 191, an increase of 40.4 % from 2010.
One hundred and eighty nine Prospecting Licences are budgeted for 2012 covering
1,958,040 acres (792,390.7 hectares). In 2011 there were 191 Mining Licences in existence,
exceeding the budget by 1.6 percent. Twenty nine Mining Licences are budgeted for 2012,
covering 118,813 acres (48,081.9 hectares).
There were 5 Reconnaissance permissions for Geological and Geophysical Surveys in
existence in 2011, 62.5% of the budget. Fifteen Reconnaissance permissions are budgeted
for 2012.
Mining Permits in 2011 totaled 1,161, exceeding 2010’s total by 56.5%. Mining Permits
however fell short of 2011’s budgeted amount by 2.4%. Mining Permits projected for 2012
are 1,738 covering 1,553,772 acres (628,789.2 hectares).
Prospecting Permits (Medium Scale) in existence were 5,149, an increase of 5.5% from 2010
and fell short 2011’s budget by 12.4%. Projections for Prospecting Permits (medium scale)
for 2012 are 7,053 covering 7,194,060 acres (2,911,332.7 hectares).
The total number of Claims (verified and unverified) for Small Scale mining operations
(gold and diamond) in existence in 2011 was 15,032 of which 3,826 were River Location
licences. For 2012, 16,500 are budgeted, of which 12,000 are Land Claims and 4,500 are
River Locations.
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7. Guyana's Mining Output for
2011
363,083 metric ounces of gold were as declared
which represents a 39.6 % increase over 260, 000
metric ounces than what was projected for the year.
Bauxite production of 1,771, 284 metric tonnes was
4.04% above projection of 1,702,436 metric tonnes
Stone production of 488,030 metric tonnes was
22.01% above projection of 400,000 metric tonnes.
Diamond production was 52,273 metric carats
Sand production was 354,828 metric tonnes
Loam production was 12,133 metric tonnes
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9. Total Bauxite Output for 2011
250,000
211,716
200,000 202,336
178,249
167,423 169,462 164,569 169,418
161,235
150,000
Tonne
122,618 126,493
100,000
72,467 72,414
50,000
0
January February March April May June July August September October November December
Calcined (RASC) Chemical (CGB) Metal Grade (MAZ) Tailings Total Bauxite
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12. Development of a Gold
Refinery
been operating at a very
The Guyana gold industry has
favorable position over the last few years and this is
primarily attributed to the high prices of the precious metal
on the world markets and the level of increased investments
from both local and foreign developers in the mining sector.
Guyana is seeking to develop a gold refinery.
This undertaking must be collaborated with the Guyana
Gold Board and the Ministry of Natural Resources and the
Environment.
This will follow the path of our commitment to support
value-added activities and to ensure that the industry
delivers maximum benefits to the people of Guyana. 12
13. Petroleum Development
Monitoring of Apoteri K2 drill hole which was completed in June 2011.
Investigation of Shallow Gas Occurrences on the E.B.D, West
Demerara, Essequibo Islands and Pomeroon.
Commencement of an exercise to determine the resistivity characterization of
Shallow Gas Bearing sand intervals.
Petroleum skills development opportunities provided i.e. seismic interpretation
methods; and Managing Offshore resources.
Exploration drilling of Apoteri K2 by Takutu Oil and Gas Inc/Canacol.
On-going work for Jaguar 1 Exploration Well by Repsol et. al.
On-going work for Eagle 1 Exploration Well by CGX Resources Inc.
Acquisition of infill 2D Seismic data over the Esso/Shell Stabroek block.
Nabi Oil and Gas Inc. Petroleum Prospecting Licence under consideration.
Continuing negotiations for Petroleum Prospecting Licence and agreement in
respect of Anadarko Petroleum Corporation.
A variety of interests in speculative exploratory activities from significant
international and major companies.
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14. For the areas of
Mining, Bauxite and Quarry
1. Promote growth in the bauxite industry, including by facilitating a major investment in
developing new bauxite deposits, facilitating investment by the bauxite companies in
increased production capacity including the construction of new kilns, encouraging the
export of new products such as mullite and proppants, and working with the bauxite
companies on establishing the feasibility of alumina production
2. Facilitate growth in the gold industry, both by supporting the artisanal mining sector and
by facilitating investment in a number of large scale projects that in maturity will more
than double Guyana’s gold production within the next five years and that will introduce
new technology including underground mining
3. Promote the establishment of other minerals as an export sector, including manganese.
4. Promote the growth of the quarry stone industry both for domestic purposes and to meet
the needs of the nearby export market such as in the Caribbean
5. Encourage more value-added forestry by working closely with all stakeholders on
addressing constraints while continuing to support the development of our timber and
non-timber resources in a sustainable way consistent with the LCDS
6. Guyana has the potential to develop an oil and gas sector. The mere continuation of the
on-going exploration activities will see hundreds of technical and administrative jobs
created. If the exploration activities yield favourable results, thousands could be
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employed once production commences.
15. Mining Opportunities in
Guyana
Several economic minerals are exploited in the Guiana Shield. The main minerals
mined or those with potential are gold, diamonds and bauxite.
Gold: gold extraction and exploration has been reported in the Guiana Shield
since the colonial expansion of the 16th century. Gold is mainly found in areas
of greenstone belts. Placer – placer deposits are observed on most of the main
rivers draining the greenstone terrain, which hosts most of the primary gold.
The Barama-Mazaruni Greenstone belt has low relief, deep weathering, which
accompanied by the tropical climate and a lack of a post-Proterozoic cover, are
right conditions for mobilization of gold. Lode – this is frequently found in
Precambrian terrains (notably the greenstone belts of the Barama-Mazaruni
Group).
In many cases, the gold is hosted in quartz veins, which dip at high angle to
sub-vertical. In the Guiana Shield, gold occurs as macroscopic, irregular gold
grains occurring in fractures within quartz veins, disseminated in country rocks
and silicified shear zones, as inclusions in disseminated/vein-hosted
pyrite, chalcopyrite and pyrrhotite, or intergrowths with sulphides.
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16. Mining Opportunities in
Guyana
Diamonds: these are only found in placer deposits in many of the main rivers of
northwest Guyana. The alluvial diamonds seen in northern Guyana are thought to
derive from the Pakaraima Mountains, though the main source is unclear.
Bauxite: bauxite extraction is a major industry and the country is a main global
producer. Linden, in the north, is the main centre for this mining. The mining area is
defined by a coastal strip 30km wide from the Essequibo River south-southeast
passing through Linden to the Suriname border, including the Kwakwani mining
district.
On the coastal plains lie two types of bauxite present: residual and alluvial. Residual
bauxite derives from in-situ weathering of beadrock formed during the upper
Oligocene unconformity. Orebodies are usually 8-10m thick. Alluvial bauxite comes
from transported bauxite material. It is often interbedded with sub-bauxite clays up
to 10m thick and also exists in intermediate elevations as in-situ bauxite, 5m
thick, capping hills. Average deposits have 50% aluminium and 4% silica. In
plateaux, bauxite forms from weathering of various rocks in situ, and orebodies can
be up to 8m thick.
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17. Mining Opportunities in
Guyana
Aggregates and Gravel: aggregate quarries in Guyana are mainly within
the Bartica Assemblage, in which biotite gneiss, granite gneiss, hornblende-
biotite gneiss, medium-grained gabbro and black biotite schist are
extracted and crushed. Aggregates are used for road and building
foundations as well as sea defence construction. Gravel, extracted from
alluvial deposits, is used in the construction industry as aggregate for
concrete manufacture and road construction.
Silica Sand: abundant in Guyana, this is found as the Pliocene-Pleistocene
‘white sand’ deposits covering many regions, notably the coastal area.
Apart from areas stained by ferruginous ground water, the white sand is
very homogeneous with few impurities (heavy mineral concentration
rarely exceeds 0.1%) and an absence of clay. Silica sand can be used
industrially, including: glass, ceramics, abrasives, silicon carbide, silica
tetrachloride, activated silica, silica flour and filtration.
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22. Applicable Policies and Laws
Policy: Mineral and Petroleum Policies and Fiscal
Regimes set out by the Minister in January 1997 and
amended from time to time.
Principal Legislation: Guyana Geology and Mines
Commission Act 1979, which is read as part of the
Mining Ac 1989; Mining Act 1989 and Regulations;
Geological Surveys Acct; Occupational Safety and
Health Act, Environmental Protection Act and
Industries Aid and Encouragement Act
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23. Effective Environmental
Governance
The Natural Resources and Environmental Governance sub-
programme focuses on strengthening national, regional and local
environmental governance to address agreed environmental
priorities. The sub-programme has seven key goals:
1. Sound science for decision-making:
2. National and international cooperation
3. Poverty alleviation
4. National development planning
5. National and international policy setting and technical
assistance
6. Sustainable national and regional development
7. Strengthen and harmonization of national laws and
institutions
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24. Resources Efficiency
The resource efficiency sub-programme focuses on reducing
the adverse environmental impacts of producing, processing
and using goods and services, while also meeting human
needs and improving well-being. The sub-programme has
four key goals:
1. Building capacity for policy action
2. Seizing investment opportunities
3. Stimulating demand for resource efficient goods and
services
4. Assessing critical trends: To strengthen the knowledge
base on Resource Efficiency, the MoNRE will assesses
and reports on trends in how resources are
extracted, processed, consumed, and
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25. Fiscal Incentives for the
Extraction of Minerals
Mining on a Large Scale
Gold and Precious Metals, Diamonds and Precious Stones
Royalty: 5% of production or of gross revenues
Income Tax: 35%
Depreciation: 20%
Zero rates of duty on equipment, process minerals and spares to be used during and in the course
surveys, prospecting and mining
No free equity to State, but the State shall have the right to nominate a member of the Board
Withholding tax set at 6.25% of dividends
Stability clause - for each mine developed, all conditions maintained for the duration of 15 years from the start of
commercial production or the life of the deposit, whichever is shorter, then general rules for duties, income tax and
withholding tax apply
Foreign Companies
Whenever the price of Gold is above US$1000 per ounce, they will pay the usual 5% of the net price plus an
additional 3% of the net price. In total, royalty will be 8% for foreign companies. This additional 3% is known as a
windfall royalty payment.
Bauxite and other Minerals (except sand and stone)
Royalty: 1.5% of product or of gross revenues or of production costs leaving plant, whichever is greater
All other conditions are the same as for gold
Medium Scale and Small Scale
Royalty: 5% of gross revenue for gold; 3% of gross revenue for diamonds
Income tax: 2% of gross revenue, in lieu of Income Tax. If the permit holder is a corporation, corporation tax is
payable at the rate of 35% of taxable income.
Duty and value added tax (VAT) exemptions on a range items
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26. Sustainable Development
Economic growth and social development cannot be sustained with our current
consumption and production patterns. Globally, we are extracting more resources to
produce goods and services than our planet can replenish, while a large share of an
increasingly urban world population is still struggling to meet basic needs.
Therefore, Guyana will become resource efficient in order to allow for the critical
opportunity to address this unsustainable path and build a green economy in which
economic growth is decoupled from environmental harm. By enabling the design
and production of low-impact products and services, resource efficiency can help us
meet human needs while respecting the ecological carrying capacity of our nations
and the earth, as a whole.
From the Government of Guyana to the research community to business and
consumer groups, we will use expertise, experience and convening power to create
tools and build partnerships that accelerate the transition to the Green Economy and
resource efficient societies.
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27. Thank You for your
Attention
Guyana: The Natural
Resources Frontier of the
Caribbean and South America
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