Omai Gold Mines Limited (OGML) has shut down its operations indefinitely over the repeated digging up of its vital access road and yesterday informed President Bharrat Jagdeo that the present unrest at Linden is impacting on the investment climate.
This was seen as a clear hint that its proposed US$20M investment for the Linden Mining Enterprise (Linmine) may be on the line.
The firm is reportedly moving to trigger a mechanism for it to claim for political risk insurance with the Multilateral Investment Guarantee Agency, the insurance arm of the World Bank to recover for losses in the premature shutdown of its operation. Once this is done, the investment climate rating for the country will suffer.
Omai had effected a partial closure of its operations on April 10 after Lindeners protesting over the collapsing water and electricity supply shut off access to the Wisroc Road leading to Omai’s mine site. No fuel could therefore be supplied.
However, the firm with police protection, moved five tankers with 50,000 gallons of fuel to its site on April 12 but the protestors dug a ditch across the Wisroc road later, cutting off access to the site again.
As a result, Omai was forced to shut down its operation at about noon on Saturday and has since taken a decision to suspend its operations indefinitely and send home 600 workers of whom 50% are Lindeners.
Omai informed the President of its decision yesterday, noting that it had withheld sending off all of its employees and had conducted maintenance operations in the hope that fuel shipments would have resumed. However, the firm said it has given up on reaching a solution between itself and Lindeners on accessing its site, hence its decision to prematurely close its operation. Omai had proposed that it could supply Lindeners with 9 MW of power in a matter of months if they allowed the company unfettered access to the road.
On Sunday, the latest reason given by the residents for obstructing the road again was that it had posed a long-standing dust nuisance and this must be settled first.
A source said Omai is estimating the losses to investors, shareholders and others as a result of this action to be “immeasurable”. The source said 800 ounces of gold per day is lost as a result of the closure as well as wages to six hundred workers. The government will lose US$20,000 per day in taxes and royalties.
On Thursday, President Jagdeo had visited Linden and outlined to protesters the plans that the government has put in place to ease the power and water problems.
Three generators had been sent up by Guyana Power and Light (GPL) and two more had been ordered from the US. In addition, talks had been held with Omai on expediting the 9 MW plan.
However, the protesters refused to budge and said they wanted to see concrete results first.
The President indicated that he would return to the town today.
Yesterday, the power and water supply in the town continued to be unstable.
At least one of the GPL engines seemed to have been affected by dirty oil and its filters had to be cleaned while some remedial work had to be done on the third GPL set sent up. At 6.30 pm yesterday afternoon, power was on but being rotated from area to area. Residents said the unreliable supply of electricity is taking a heavy toll on them. To date, the Wismar Hospital Complex has not been able to recommence its services and patients on the western bank of the Demerara River find it difficult to access medical care as they are forced to cross the river and travel all the way to the Mackenzie Hospital. Water continues to be a problem in many parts as the erratic power supply is affecting pumping stations.
Protesters yesterday continued to block the Mackenzie-Wismar Bridge and the roads leading to the interior.