MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Omai, Guyana

Key Data

Company:Mahdia Gold Corporation Operational status:Active (as of 2014) Materials extracted:gold Type of mine:Gold Main issues:Water, Community Relations, Public Health, Biodiversity

Description

Located on the Omai River, a tributary to the vital Essequibo, the Omai mine opened in 1993 under the operating company Omai Gold Mines Ltd. (OGML) with the help of $163 million in political risk insurance from the World Bank [1]Golden Star Resources (American) owned 35%, Cambior Inc. (Canadian) owned 60%, and the Guyanese government owned 5% of OGML. By 1995, Omai was one of the largest mines in Latin America and was also one of the leading employers and sources of foreign exchange for the country[2]. However, in early 1995, problems arose with the mine: smaller breaches in the tailings dam prompted calls for an environmental review of the project, which concluded that the effluent had a cyanide content that exceeded North American standards[3]. Before the larger spill in August, only one, company performed EIA (Environmental Impact Assessment) had been written about Omai[4].

Following the August spill, which turned the river into a “whitish-pink color”[5]. The government warned affected residents not to use the river water for any purpose. Most of these residents were indigenous communities, who have historically held little voice in public discourse about mining activities in the interior[6]. Even though the Essequibo was declared safe for use a week after the breach was closed, many residents in affected areas still used alternative sources of water even months later; in some cases, villagers had to walk miles to find sources they considered clean. Despite claims by the government that the water was safe for use, a survey in 2002 found that most villagers were using other sources of drinking water even 7 years after the accident[7]. The fishing industry in the Essequibo River, a major source of income for many villagers in affected areas, decreased due to the alleged loss of aquatic life (OGML claims there was no loss of Aquatic life from the spill[8]) and the difficulty of selling fish from the contaminated areas [9]Reparations from OGML to the victims in the disaster zone is described by multiple sources as “meagre” and “insufficient”[10][11].

Following an environmental review, the Omai mine reopened in early 1996, and continued its activities (at even higher output levels) until closing down the mine in 2005 due to depleted resources. Later attempts to sue OGML were unsuccessful in courts in Quebec and Guyana[12][13]. IAMGOLD, another Canadian firm, eventually bought out Cambior Inc (who had by then bought out Golden Star Resources’ share in the mine) in 2006[14]. The mining rights to Omai were also later sold to another firm, Mahdia Gold Corporation, who restarted mining activities in Omai in 2014[15].

Endnotes:

[1] (Ramessar 2003, 9).

[2] (Ramessar 2003, 16)

[3] (Jodah, 1995)

[4] (Ramraj 2001, 89)

[5] (Ramessar 2003, 75),

[6] (Ramessar 2003, 104).

[7] (Ramessar 2003, 78)

[8] (Ramraj 2001, 87)

[9] (Ramessar 2003, 71)

[10] (Ramraj 2001, 88);

[11] (Ramessar 2003, 84).

[12] (Omai 1998)

[13] (Kosich 2006).

[14] (IAMGOLD 2006)

[15] (Mahdia 2014)

Bibliography

Bibliography
IAMGOLD Corporation. Investor Relations. “IAMGOLD OFFER ACCEPTED BY CAMBIOR SHAREHOLDERS.” News release, November 7, 2006. Accessed November 1, 2014. http://www.iamgold.com/Theme/IamGold/Files/Documents_news/PR%2018%20-%20CBJ%20shareholder%20vote%20final.pdf.
Joodah, Desiree K. “Courting Disaster in Guyana.” Multinational Monitor: South America Issue, December 1995.
Kosich, Dorothy. “Guyana High Court Dismisses $2B Omai Gold Mines Tailings Accident Suit.” Mineweb. November 1, 2006. Accessed October 28, 2014.
“Mahdia Gold Corp Announces an Update on the Joint Venture Operations at the Omai Site.” Marketwatch. September 2, 2014. Accessed November 1, 2014.
“Omai Lawsuit Dismissed.” August 24, 1998. Accessed November 1, 2014.
Ramessar, Candessa R. “Water Is More Important than Gold: Local Impacts and Perceptions of the 1995 Omai Cyanide Spill, Essequibo River, Guyana.” Master’s thesis, Virginia Polytechnic Institute, 2003.
Ramraj, Robert. “The Omai Disaster in Guyana.” Geographical Bulletin 43-2 (November 2001).