Gold mining

Gold mining2019-12-15T16:08:41-03:00

Gold mining

Mining and quarrying by moving sHydrocarbon dates from prehistoric times. At that time people already started using natural resources, including mineral deposits, to provide for their survival and development. The earliest form of mining in Suriname was the exploitation of clay around the seventeenth century.

The exploration of gold on small-scale in Suriname started in the late 17th century but was terminated due to lack of gold discoveries. Nevertheless, ever since then efforts were made to find gold in Suriname. The first gold was found in the 18th century and leading to the establishment of gold mining companies and allocation of concessions and issuance of mining licenses.

During the administration period of governor Van Sypesteyn (1873-1882) this industry was strongly stimulated for developing it and to improve the relationship with the hinterland residents. Exploration and exploitation activities increased steadily during that time. This structured, mechanized gold mining, however, was short-lived. After a few years, it came to a halt again due to inadequate exploration, lack of knowledge of gold mineralization, mismanagement, speculation and diseases such as malaria.

These mining activities happened mostly along the River Marowijne (eastern side Suriname) and River Suriname.

In 1903 the colonial Government decided to stimulate the gold industry with the construction of a railway line from Paramaribo to the gold fields: along the River Lawa via Kwakugron, Kabel and Dam on the Sarakreek. But when the production of gold started to decline again and the results of the research in the Lawa area turned out to be disappointing, it was decided in 1912 that the route from Dam to the Lawa gold fields would no longer be laid.

In the 1980s the small-scale gold mining regained attention again. This was then seen as a possible source of employment and income for especially hinterland residents and as a catalyst for rural development.

In 1981, the Minister of Natural Resources and Energy proposed to the Government to introduce special regulations for small scale gold mining to be incorporated in law. The mining law that came into effect in 1986 also considered the negative consequences and therefore set out a clear policy of discouragement. Small scale gold mining could only take place in areas designated for this purpose by the Government.

The development of large-scale gold mining in Suriname faced other difficulties. Between 1974 and 1977, the Government explored the gold deposits in the Gross-Rosebel area in a joint venture relationship with the Canadian gold mining company Placer Dome. However, the results were marginal. In 1979 the State Mining Company N.V. Grassalco obtained the right to explore. A feasibility study in 1984 showed that economic exploitation of the gold deposit to a depth of ten meters was possible, but it was not possible to get this project funded.

In April 1994 the Government signed a Mineral Agreement with Golden Star Resources and N.V. Grassalco (Grassalco) for the further exploration and exploitation of gold reserves in the Gross-Rosebel area. In the following period, however, the situation on the world gold market changed dramatically: the gold price fell below the level at which the feasibility study of the project had been carried out and the conditions for financing gold projects were tightened. The Mineral Agreement therefore had to be amended in 2003. In May 2002, Cambior Inc. took over the majority of stocks of Golden Star Resources. The official opening took place on April 14, 2004, by startup of production in the Rosebel Mines and with that also the large-scale industrial gold mining in Suriname got a big boost. In November 2006, the interest of Cambior Inc. was completely taken over by IAMGOLD Corporation.

Mining methods in Suriname

Historically manual mining has been the main method used, which is still being applied in the small and medium-scale gold mining. Since the last decades of the 20th century up until today gold mining has been flourishing and lucrative for small and medium scale miners using mechanic methods of mining.

Manual mining 21th century

Figure 3.9 Manual mining 21th century (source SHMR)

In Suriname mainly two methods are distinguished for gold mining:

  1. The artisanal and small-scale gold mining (ASGM) and
  2. The industrial gold mining

The small- and medium-scale gold mining in the interior of Suriname, based on formal as well on informal mining activities, increased rapidly in the past two decades.

With the establishment of a committee in 2006 for structuring the gold sector the Government aimed to structure the gold sector in its entirely, but up to date still faces several challenges to complete its mission. Whereas in 2015 there was still a material contribution of the small and medium-scale mining to the gold sector, the share of this group was relatively reduced in 2016 by the operation of another industrial mining company, NS.

In general, the formal small and medium scale mining is based on licenses assigned by MONR with reference to the Mining Decree 1986, while industrial mineral mining is based on mineral agreements between the Republic of Suriname and the Companies and approved by DNA. In 2016 there are two companies operating under a Mineral Agreement, Rosebel Gold Mines NV (RGM) and Newmont Suriname LLC (NS).

Mint House

Since February 20, 2015 Suriname has its own gold refinery, Kaloti Suriname Mint House (KSMH), which at that time was the subsidiary of Kaloti Precious Metals from Dubai. As far as the Caribbean is concerned, Suriname is Dubai’s largest trading partner. Kaloti Suriname Mint House conducted its first official gold refining as well as subsequent export of the produce on July 21, 2015.

Kaloti Suriname Minthouse is a joint venture between the Republic of Suriname, Kaloti and some gold traders. The Government has a 10% interest in KSMH. The Government started late 2018 with the evaluation of the joint venture with KSMH and how to continue further.