A view of the gold-mining operation from the hillside.- -Ian Allen photoEarl Moxam, Senior Gleaner Writer
ONE WEEK after the Ausjam gold mine in Kraal, Clarendon, was reportedly shut down, there is still no news of a resumption of normality at the plant.
On Monday, December 1, Ausjam's management announced that they had decided to close the gold mining operation and lay off the 18 employees, citing a decline in high quality gold reserves at the current mining site and what it described as the frustrating labour relations climate at the plant.
The company charged that the United Union of Jamaica (UUJ) had persisted in making "unreasonable" wage and fringe benefits demands, making it impossible to continue what had become a losing enterprise.
NAIVE OPTIMISM
Paul Sailah, the 51-year-old Australian investor, told a tale of naive optimism, giving way to the reality of a sobering challenge and ultimately frustrating resignation, as he retraced his journey from Melbourne to Jamaica in search of his dream project.
With a self-deprecating grin, Mr. Sailah described himself as the lone remaining adventurer/ investor in the project, which was sold to him by his accountant in Melbourne as a viable prospect.
It all started, he said, when his accountant friend told him about the opportunity to invest in a gold mining venture in far off Jamaica. He was introduced to the principals in Ausdrill, another company with experience in gold mining, which saw the figures on this Jamaican project and thought it was viable.
Mr. Sailah at the time was operating a scrap metal recycling business.
But having learnt the gold mining business from his father, he decided to throw in his lot with the other investors, putting a significant amount of his own funds into the project. The prospects were good initially, he said, with gold fetching US$400 per ounce. Then came the first major setback when, in 2001, his Ausdrill partners sold 20,000 ounces of gold from the mine on the futures market before pulling out of the project.
But determined nonetheless to carry on, Mr. Sailah put US$4 million of his own funds into the project. By then, however, the price of gold on the world market had plummeted to US$250 per ounce, making it even more of a challenge.
STARTED OUT WELL
This year had started out well for the company, according to Mr. Sailah. "Early in the year we were keeping our heads above the water, but in the last six months we have been set back by over $400,000," he said.
The two parties were in negotiations at the Ministry of Labour in an attempt to bridge the gap, when the company suddenly announced its decision to close the operation.
While James Francis, President of the UUJ, has described this action as union busting, Mr. Sailah contends that it was the only option open to a company that was consistently losing money, aided and abetted, he claimed, by the actions of some of the workers. The company's operational costs, which stood at US$40,000 per month earlier in the year, escalated by at least 25 per cent over the last three months, he reported.
When The Sunday Gleaner visited the Ausjam mine last week, a skeleton staff was on hand, processing the last of the ore mined before the layoffs were announced.
But Mr. Sailah said before he gets to the point of having a stable workforce, he would have to be convinced that there are enough deposits of high quality ore elsewhere along the six kilometres of land for which the company has been given a prospecting licence.
It was a significant challenge, he acknowledged, but not an impossible task, especially with the price of gold now back up to over US$400 per ounce.
He emphasised however, the importance of being able to get at the gold as quickly as possible, without any work stoppage, to take advantage of the price, which he believes is set to go slightly higher in the new year. But Mr. Sailah, looking wistfully at the surrounding country, showed no sign of wanting to get out of Jamaica.
"I love this country; I even have an 18-month-old Jamaican pickney," he said with a grin, in his best imitation of the local accent, betrayed by a trace of that Australian drawl.
