THE Ministry of Natural Resources recently disclosed that the total declaration for gold as at December 20, 2014 showed a decrease by 22.61%, over the corresponding period in 2013, as gold purchased by the Guyana Gold Board (GGB) fell by 41.24%. 

This came as a result of the decrease in the demand for gold on the international market, which led to the global gold price decreasing by 22% in 2014.
A local analyst told the Guyana Chronicle that dealers’ quantity of gold exported increased by 10.16%, whereas the GGB’s quantity of gold exported fell by 40.26% within the period 2013-2014; hence the overall quantity of gold exported is down by 22.73%.
Additionally, the value of gold exported by dealers increased by 10.86%, while the revenue garnered by the GGB decreased by 43.48% during the comparative periods (2013-2014); implying that the total revenue for the comparative period fell by 23.45%.

‘Experts have indicated that every 10 years there would be a significant drop in gold prices and therefore miners should gear and prepare themselves during the good times to meet the challenges of this price cycle’

DECLINE IN PRICES
The source told the Guyana Chronicle that the fall in gold output has been credited to the decline in prices during 2014, whereas at the start of that year hopes were high that the gold market could recover from the drop in 2013, where prices ended the year in negative territory for the first time in 12 years.
However, despite strong optimism by major investors within the sector, gold has once again closed the year in negative territory at US$1,182.90 per ounce.

TREMENDOUS DIFFICULTIES
The falling price of gold on the world market is creating tremendous difficulties for the mining industry across the globe. Consequently, players in the industry are requesting help from their respective governments. Mine workers in Ghana (a country heavily dependent on mining) have called on government to sustain the mining sector in the wake of the falling price of gold on the world market.
According to them, the falling price of gold on the world market was affecting the sustainability of the mining companies and over 3,000 mine workers have been laid off by mining companies in the country due to the decline in the price of gold on the world market. Four hundred workers are also expected to be laid off early this year.
After peaking at US$1,921.15 an ounce on the world market in September 2011, the price of gold fell to as low as US$1,180.50 in June 2013, the lowest price since 2010.
Analysts have predicted that the price of gold will average US$1,000 in 2014 and US$840 in 2015, because a stronger U.S. economy will limit the appeal of gold.
Guyana’s mining industry, which in recent years has seen a significant growth due to massive foreign and local investments in gold mining, is also experiencing serious challenges. Unfortunately, even though last year’s gold declaration which was the highest ever, (458,000 ounces), it will not benefit the mining industry much because of falling prices on the global market.

GGDMA’S APPEAL in 2014
The Guyana Gold and Diamond Miners Association (GGDMA) at its first meeting in 2014 noted the challenges which gold miners were facing as a result of the falling prices of gold and appealed to President Donald Ramotar for the government to implement relief measures to the mining sector.
The President’s response was most positive and heartening as he assured miners that his government will be analysing the situation with a view to implementing appropriate relief measures.
The President promised to ensure that the relevant ministries forge closer relations with the association’s executive body to deal more effectively with issues, and to determine what assistance the government could render.
With regard to miners who are experiencing difficulties in terms of having their equipment re-possessed by the banks, the President said government would try to intervene to bring some relief to affected miners.

HIRE PURCHASE LEGISLATION
He pointed out that situations such as these highlight the need for hire purchase legislation in Guyana and assured that his government will be taking steps in this regard.
In terms of the cost for reclamation, the President reiterated the importance of environmental issues, and said there are enormous benefits to accrue from sustainable mining practices and protection of the environment.
However, this issue is not a one-way street and miners should also explore ways and means of cutting costs of production by investing in modern technologies which are more efficient and which increase productivity.
Experts have indicated that every 10 years there would be a significant drop in gold prices and therefore miners should gear and prepare themselves during the good times to meet the challenges of this price cycle.

(Navendra Seoraj)