By Petulia Clarke, Staff ReporterAUSJAM MINING Ltd., the gold-mining operation in Pennants, north central Clarendon, has sorted out initial teething pains and is ready to expand, but is being hindered by heavy Government bureaucracy that has stalled operations, investors say.
The Australians, who have invested US$16 million in the mine, said that Government's failure to renew a contract since last December is threatening to drive them out of the country.
The mine the first operation to take gold out of Jamaica since 1540 operates under a Government agreement put in place five years ago. The Government gets 4.5 per cent royalty from the amount of gold produced. Ausjam says that about $10 million has gone back to the Government in royalties.
But Brett Young, Ausjam mine manager, said that despite implementing all agreements, which included intense community improvement projects, the challenges in Jamaica continue.
Mr. Young, who visited The Gleaner's offices with Ausjam chairman Paul Sailah recently, said that the company needed the new contract signed before expanding into other parishes like St. Mary, St. Thomas and St. Catherine, where initial investigations have indicated gold deposits. But, despite trying for weeks to work with Government for a new contract, none is forthcoming, he said.
The mining portfolio was in December made the responsibility of the Ministry of Land and the Environment.
"We can only assume that they won't put the agreement back in place," Mr. Sailah said. "But we would want to know what the changes are, if any."
The contract would enable an expansion that would include acquiring a new state-of-the-art drill rig, as there is extreme geological difficulties without it. Ausjam also plans to do more exploration on the island and employ more people.
"But Jamaica's bureaucracy is unbelievable," Mr. Young said. "We hear that Jamaica is trying to attract investors to bolster resources, but there's no indication of that to us."
The company has produced 13,000 to 15,000 ounces of gold since 2001 down from an estimated 41,000 ounces that dwindled because of incorrect projections of the geology, and theft.
Complaints of bad management and labour disputes have also plagued the company.
The operations have been shut down three times to repair equipment, because of management changes and wage conflicts with the workers which ended up at the Industrial Dispute Tribunal.
But the company says it now has sound management practices in place and the mine is progressing.
Coy Roache, the Commissioner of Mines and Geology, told The Gleaner recently that the lode yield that Ausjam had anticipated was apparently not there.
Current projections are that the mines might yield a total 16,000 ounces, he said, less than half the amount of gold it had expected to extract. He said that Jamaica was also talking to other investors as, with the price of gold going up, the country was expecting more interest from investors.
