Guyana Mining For Gold In Area Claimed By Venezuela

In mid-September the company Guyana Goldfields started extracting gold from a mine located in the region of Essequibo, located in the northwest of the country, whose sovereignty is disputed with Venezuela.

President David Granger, who took office in May, congratulated the Canadian-owned company “for commissioning this mine, and the first gold pour. I applaud the efforts of all who worked to bring this enterprise to this stage.”

Guyana Goldfields has invested around US$200 million in the construction of the Aurora mine which employs about 800 workers and will produce an average of 150,000 ounces of gold annually during the next 17 years.

According to Granger, mining constitutes an important pillar of the country’s economy. In 2014 gold production represented 7 percent of the gross domestic product.

However, the Essequibo region, which has an area of 160,000 square meters and constitutes two-thirds of the territory of Guyana, is claimed by Venezuela which considers null and void the arbitral award of 1899, which resolved the dispute by declaring this region to be territory of Guyana.

Underlying this claim is the strategic location of the region and the existence of important petroleum and gold deposits.

Former Venezuelan President, Hugo Chávez (1999-2013), maintained cordial relations with Guyana and the dispute was frozen as a strategy to increase Venezuela’s influence among the Caribbean countries. Nevertheless, the current president, Nicolás Maduro, has revived the territorial conflict.

In May, the US oil company Exxon Mobil announced the discovery of oil in the Stabroek block in the region of Essequibo. The Venezuelan government requested the company to suspend its activities, receiving the answer that “the border disputes should be resolved by the governments through bilateral discussions and the appropriate international organizations.”

Maduro issued a decree with the coordinates that mark the border of Venezuela with Guyana and requested the United Nations (UN) to activate its good offices — a kind of peaceful resolution of disputes — to resolve the territorial conflict. The Guyanese government rejected the request and demanded that the claim be heard in the International Court of Justice in The Hague.

Conflicting positions

On Sept. 27, Presidents Granger and Maduro met in New York before the UN Secretary General, Ban Ki-moon. In addition to accepting the exchange of ambassadors, which implies the normalization of bilateral relations, Maduro expressed his desire to continue the dialogue on the territorial issue with the hope of negotiating a resolution.

But after two days, in his speech before the UN General Assembly, Granger reaffirmed the commitment of his country to international law and at the same time invoked the United Nations to protect small states from foreign aggression, specifically the intent of Venezuela to “unravel borders which have been undisturbed for decades.”

“For fifty years, our small country has been prevented from fully exploiting our rich natural resources. Venezuela has threatened and deterred investors and frustrated our economic development,” said the Guyanese President.

The Venezuelan response was not long in coming. On Oct. 3, the date the arbitral award was settled 116 years ago, Vice President Jorge Arreaza denounced “the absurd and irrational actions” of Guyana “to ignore its international commitments referring false protections based on lies and subterfuge.”

Some analysts cited by the press considered that there is little interest in either country to resolve the border conflict. On the one hand, Venezuela will use it as propaganda in its favor, particularly before the legislative elections scheduled for December; while Guyana will not be deterred in its plans to take the controversy to the International Court of Justice in The Hague.

Even though the Ministers of Foreign Relations of the Caribbean Community (CARICOM) confirmed on Oct. 1 in a statement their support for the territorial integrity of Guyana, they did not explicitly support the intention of the country to seek a juridical solution to the border conflict with Venezuela.

The Ministers “noted that Guyana called for a juridical solution to the controversy given the divergence of views between the two sides about the validity and nullity of the Arbitral Award of Oct. 3, 1899,” and “reaffirmed their support for the maintenance of the territorial integrity and sovereignty of the Cooperative Republic of Guyana.”