Identifier
Created
Classification
Origin
10GEORGETOWN17
2010-02-08 17:08:00
CONFIDENTIAL//NOFORN
Embassy Georgetown
Cable title:  

LCDS COLLIDES WITH GOLD MINING INDUSTRY

Tags:  PGOV EMIN ECON XL GY 
pdf how-to read a cable
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OO RUEHLMC
DE RUEHGE #0017 0391713
ZNY CCCCC ZZH
O R 081708Z FEB 10
FM AMEMBASSY GEORGETOWN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0190
INFO EC CARICOM COLLECTIVE
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
C O N F I D E N T I A L GEORGETOWN 000017 

SIPDIS
NOFORN
DEPT FOR WHA/CAR - SEAN WHALEN/WILLARD SMITH
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA

E.O. 12958: DECL: 2020/02/08
TAGS: PGOV EMIN ECON XL GY
SUBJECT: LCDS COLLIDES WITH GOLD MINING INDUSTRY

CLASSIFIED BY: Karen L. Williams, Charge d'affaires, DOS, Exec;
REASON: 1.4(B),(D)

C O N F I D E N T I A L GEORGETOWN 000017

SIPDIS
NOFORN
DEPT FOR WHA/CAR - SEAN WHALEN/WILLARD SMITH
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA

E.O. 12958: DECL: 2020/02/08
TAGS: PGOV EMIN ECON XL GY
SUBJECT: LCDS COLLIDES WITH GOLD MINING INDUSTRY

CLASSIFIED BY: Karen L. Williams, Charge d'affaires, DOS, Exec;
REASON: 1.4(B),(D)


1. (SBU) Summary: In early January the Jagdeo administration
proposed new mining regulations to limit forest degradation as part
of President Bharrat Jagdeo's Low Carbon Development Strategy
(LCDS). Miners strongly rejected proposed regulations and demanded
that five to seven percent of Guyana's forested lands be parceled
out for mining industry use. Despite the establishment of a Land
Use Committee formed specifically to resolve disputes between the
GoG and miners, the Committee has failed to reach dispute
resolution. The February 11 meeting between Jagdeo and miners will
determine if reconciliation and a political agreement can be
reached. End summary.


2. (U) Background: The GoG proposed new regulations requiring
miners to provide six months notice prior to commencing mining
operations while giving the Guyana Forestry Commission (GFC) veto
power over mining activities. Numerous town hall meetings between
the GoG and mining industry representatives have taken place in
Georgetown, Port Kaituma, Bartica and other major cities with local
media publicizing protests among miners. The latest protest
occurred on February 1 in Bartica with nearly two thousand resident
miners staging a day-long protest. Lack of quick resolution led
to the GoG establishing a Land Use Committee chaired by Minister of
Transport Robeson Benn.


3. (SBU) The gold and mining industry is one of the few industries
that performed well in 2009. According to the Guyana Gold Board,
small and medium scale miners declared a record 305,000 troy ounces
in 2009, yielding nearly USD300 million, one third of Guyana's GDP.
Guyana Gold and Diamond Miners Association (GGDMA) Executive
Director Edward Shields told Econoff that the gold mining industry
is projected to produce 500,000 troy ounces in 2010 and by 2015
over one million troy ounces. Given such growth potential, miners
are concerned that new regulations will hurt business and affect
their livelihood, he said. Shields told Econoff that overregulation
could jeopardize the livelihoods and income of nearly 100,000
Guyanese.


4. (SBU) Shields told Econoff that the GoG made mining proposals
"without any consultations whatsoever". The Forestry Products
Association (FPA) has protested its denial to have representation
on the Land Use Committee. To date, only the Guyana Geology and
Mines Commission (GGMC),Guyana Forestry Commission (GFC),and
Guyana Gold and Diamond Miners Association (GGDMA) have been
allowed to participate. In a joint statement with the GGDMA, the
FPA is seeking from the GoG greater commitment to allow
stakeholders a voice in the decision-making process. Senior
Economist at the GGMC told Econoff that decisions are being made by
senior officials that "do not have basic understanding of the
mining industry."


5. (C) GGDMA proposes that five to seven percent of Guyana's
forested lands be parceled out for mining industry use. These
proposals were made to the Land Use Committee during consultations
held throughout January and February, but yielded no results. The
Committee is expected to provide a report on recommendations to
Jagdeo prior to his February 11 stakeholders meeting with miners.
Former foreign minister Rashleigh Jackson told PolChief on February
8 that if the February 11 meeting between Jagdeo and miners leads
to reconciliation and an accord, this will secure LCDS
implementation. If not, "there is a danger posed to
implementation", he said.


6. (C) Comment: An uncooperative mining industry is the first
serious threat to Jagdeo's LCDS. Jagdeo understands that the mining
industry is one of the most economically lucrative industries and
that alienating miners jeopardizes his LCDS. Politically, Jagdeo
may hope to marginalize incomes to political opponents as the gold
industry is traditionally Afro-Guyanese. To do so, he may favor a
few large gold producers over small and medium scale miners and
offer them concessions. Targeting a few large gold producers has
the added advantage of making regulating easier. Whether Jagdeo
decides to use heavy handed tactics to impose his will upon
stakeholders in the upcoming February 11 meeting or chooses another
tactic to secure political victory, he cannot afford to alienate an
important segment of the voting population. End comment.
WILLIAMS