VZCZCXRO9137
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) 
 
¶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