MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Guyana

Key Data

Population:741,908 people Area:214,969 km2 Density:3 people / km2 Demographics:East Indian: 43.5%
Black: 30.2%
Mixed: 16.7%
Amerindian: 9.1%
Other: 0.5%
Mineral Resources:gold, zinc, bauxite, diamonds, uranium GDP:$5.8 billion GDP per capita:$7,836 GINI:45

History

Guyana’s history has been inextricably linked to gold for the last 500 years. One of the earliest European explorers, Sir Walter Raleigh, believed Guyana contained the gilded city of El Dorado.[1] Lust for gold drove colonization in the sixteenth and seventeenth centuries. Small-scale miners became an important social force in the interior after significant quantities were found in the 1840s.[2]

Diamonds were discovered in 1887, but many of the main deposits have been exhausted and extensive prospecting has failed to find large deposits.[3] Guyana was one of the first bauxite (aluminum ore) exporters. One of the major reasons Guyana was forced to undergo structural adjustment was the nationalization of the bauxite industry in the 1970s. The U.S. responded by severely reducing aid, and Guyana defaulted on its foreign debt. The World Bank and the IMF promote large-scale gold mining and extractive industry.[4]

Mining Characteristics

Guyana is part of a larger geological structure known as the Guiana Shield, which encompasses French Guiana and Suriname, as well as parts of Venezuela and northern Brazil. Most mining occurs in the mineral-rich interior, covered in dense forests that impede infrastructure and mostly peopled with Amerindians.[1]

Guyana has one of the highest levels of biodiversity in the world, and most of the interior’s inhabitants depend on the natural environment for subsistence, so contamination is a serious threat to public health and welfare.[2] Proponents of large-scale mining often claim it has fewer negative environmental, social, and cultural impacts than smaller-scale operations, but given the corruption and absence of government oversight and economic alternatives in the interior, large-scale mining threatens to exacerbate the harm smaller-scale operations inflict, by, for example, increasing violent competition over access to mineral deposits. Mining’s social, health, and environmental effects threaten Amerindians’ continued existence.[3]

The government estimates 5-10% of Guyana contains mineable minerals, and encourages exploration and prospection over a much wider area to determine where these minerals are.[4] By 2002, foreign mining companies had been awarded exploration permits for as much as one-fifth of the country.[5]

To date, Guyana has only had one large-scale gold operation, the Canadian owned and operated Omai project. Production began in the early 1990s and ceased in 2005 when declining ore grades made it uneconomic.[6] Omai tarnished the industry when it spilled billions of liters of mine waste into Guyana’s main river in 1995.[7] Record gold prices have piqued new interest, and the concession, now under new ownership (still Canadian), is in advanced development once again.[8] Another Canadian-based company, Guyana Goldfields, is planned to begin production at the Aurora concession by 2014.[9]

For a list of Canadian companies in Guyana as of May 31, 2011, see page 74 of “Tipping the Power Balance – Making Free, Prior and Informed Consent Work: Lessons and policy directions from ten years of action research on extractives with Indigenous and Afro-descendent Peoples in the Americas,” a report by Viviane Weitzner for the North-South Institute. http://www.nsi-ins.ca/images/documents/synthesis_english_dec_12_2011_web.pdf

Economic Context

Structural adjustment programs, beginning in 1989, induced export-oriented development strategies.[1] By the mid-1990s, gold was the second-largest generator of foreign exchange.[2] Combined with bauxite, the third-ranked export commodity in 2002, the two accounted for one-fifth of Guyana’s gross domestic product. That year large-scale gold mining (Omai) accounted for 75% of all gold produced and employed 2,000 people. Smaller-scale gold mining has responded to increased prices; gold remains one of the most important commodities of the Guyanese economy.[3]

Political Context

The contemporary model of economic development driven by large-scale mining is rooted in the Cold War. In the 1950s and ’60s, the U.S. and British governments intervened in Guyanese affairs to prevent the spread of Communism.[1] Illegal U.S. funds helped dictator Forbes Burnham seize power. Declassified U.S. State Department documents show the U.S. Government was well aware Burnham intended to “employ unorthodox methods” to “remain in power indefinitely”.[2] During Burnham’s reign (1964-1985), political repression became an increasingly brutal iteration of said unorthodox methods, and endemic corruption and austerity measures bankrupted the economy.[3]

In order to introduce economic reform, Burnham’s successor, Desmond Hoyte, was forced to resort to structural adjustment. These programs in many ways led to democratization, increased concern for human rights, and an emergent civil society, but in the absence of viable economic alternatives, they also encourage large-scale gold mining.[4]

The 2006 Amerindian Act guarantees Indigenous rights to free, prior, and informed consent (FPIC), at least in certain instances, with regards to small- and medium-scale mining, but there is not a legally binding protocol on FPIC to ensure these rights are enforced, and large-scale mining is not included.[5]

Recently, the government created the Ministry of Natural Resources and Environment to directs the entity formerly responsible for promoting and regulating the mining industry, the Guyana Geology and Mines Commission (GGMC). Insufficient resources and endemic corruption prevented the GGMC from enforcing regulations; the new ministry is intended to increase scrutiny over mining, especially environmental practices.[6]

Former president Bharrat Jagdeo devised a scheme to protect Guyana’s forests by ‘selling’ them to preservationists. In 2009, the Norwegian government pledged $250 million, and has deposited $70 million with the World Bank, as of yet. The Republic of Congo, Belize, and Suriname, among others, have voiced interest in appropriating Jagdeo’s model.[7]

Social Context

In the last thirty years, an Amerindian movement has emerged demanding the right to self-determination, land and resources.[1] The strongest organization to have emerged as a result, the Amerindian Peoples’ Association (APA), in a report produced in collaboration with the North-South Institute, claims that mining has directly contributed to the denial of Amerindian identity and rights. During the colonial and early independence eras, a number of Reservations were redefined as Mining Districts, and in areas where mining was already prevalent, many communities were denied consideration for land titles.[2]

Amerindians are deeply suspicious of large-scale mining projects, largely due to previous experiences with small- and medium-scale mining and a lack of information about the government and companies’ plans.[3] The APA would like the rights granted by the 2006 Amerindian Act extended to include FPIC for large-scale mining projects and a legally binding protocol to ensure the Act is enforced, but lacks the means.[4]

The Canadian International Development Agency (CIDA) funds the Guyanese Environmental Capacity Development (GENCAPD), which aims to develop the GGMC’s ability to enforce regulations. According to the APA/NSI report, the project fails to directly address Amerindian concerns, and Amerindian participation is “deficient.”[5]

A group of environmental activists established the Guyana Research Environmental Network (GREEN) in March of 1999 to address the damage caused by the Omai cyanide spill and to raise local and international awareness about the dangers of large-scale mining.[6]

Bibliography

[1] Mark Jacobson, “Guyana’s gold standard.” Natural History Magazine, Inc. Sept. 1998. http://findarticles.com/p/articles/mi_m1134/is_n7_v107/ai_21084300/?tag=content;col1.

[2] Marcus Colchester, Jean La Rose, and Kid James, “Mining and Amerindians in Guyana,” Final Report of the APA/NSI project, “Exploring Indigenous Perspective on Consultation and Engagement within the Mining Sector in Latin America and the Caribbean.” 2002. http://idl-bnc.idrc.ca/dspace/bitstream/10625/35237/2/117714.pdf. pp. 8.

[3] Ibid.

[4] Mellissa Ifill, “Structural Adjustment and Political Reform in Guyana,” Stabroek News. 28 Nov. 2002. http://www.landofsixpeoples.com/news022/ns2112810.htm.


[1] Jacobson.

[2] Ibid.

[3] Colchester et. al.

[4] Ibid: 9.

[5] Ibid: 12.

[6] “Omai mine set to close 4Q 2005,” Stabroek News Business section, 22 Oct. 2004.

http://www.landofsixpeoples.com/news404/ns4102242.htm.

[7] Candice Rowena Ramessar, “Water is More Important than Gold: Local Impacts and Perceptions of the 1995 Omai Cyanide Spill, Essequibo River, Guyana.” Master’s Thesis in Geography at Virginia Tech. 2003. http://scholar.lib.vt.edu/theses/available/etd-08152003-162551/unrestricted/CandiceThesisFinal.pdf. pp. 36.

[8] http://www.mahdiagold.com/omai-property.asp.

[9] “Guyana Goldfields Completes Positive Feasibility Study for Its Aurora Gold Project in Guyana,” Guyana Goldfields Press Release. 24 Feb. 2012. http://micro.newswire.ca/release.cgi?rkey=2002247083&view=16273-0&Start=&htm=0.


[1] Ifill.

[2] Colchester et al: 8.

[3] “Guyana – mining,” Encyclopedia of Nations. http://www.nationsencyclopedia.com/Americas/Guyana-MINING.html.


[1] “Cheddi Jagan,” Wikipedia. http://en.wikipedia.org/wiki/Cheddi_Jagan.

[2] Delmar Carlson, U.S. Ambassador to Guyana, Telegram to the U.S. State Department on 15 Jul. 1966. Quoted in Dr. Odeen Ishmael, “How the American Government helped Burnham to rig the 1968 elections,” Topics on Guyanese Post-Independence History, Guyana News and Information. 1 Sept. 2005. http://www.guyana.org/features/postindependence/chapter1.html.

[3] “Forbes Burnham,” Wikipedia. http://en.wikipedia.org/wiki/Forbes_Burnham.

[4] Ifill.

[5] Viviane Weitzner, “Indigenous Participation in Multipartite Dialogues on Extractives: What Lessons Can Canada and Others Share?” Canadian Journal of Development Studies, 30:1-2 (2010): 104. http://www.tandfonline.com/doi/pdf/10.1080/02255189.2010.9669283.

[6] “Mining Tensions,” Stabroek News, Business Editorials Section, 27 Apr. 2012. http://www.stabroeknews.com/2012/business/business-editorials/04/27/mining-tensions/.

[7] Sarah Grainger, “How Guyana gold mining threatens its green future,” BBC News. 26 Nov. 2011. http://www.bbc.co.uk/news/world-latin-america-15852970.


[1] Colchester et al: 31.

[2] Ibid: 6-7.

[3] Ibid: 44.

[4]  Weitzner: 89.

[5] Colchester et al: 1.

[6] Ken Traynor, “Collective Memory: On the Ground Testimony against Canadian Mining Practices Abroad,” Intervenor, 25:1 (Canadian Environmental Law Association, Jan. – Mar. 2000). http://www.cela.ca/article/documentos-en-espa%C3%B1ol/collective-memory-ground-testimony-against-canadian-mining-practices-a.


Timeline of Key Events

1989
1985
1985
1978
1971
1966
1964
1833
1831
1796
1770
1595
1498