– miners oppose budget measures, call on government to rethink proposals

THE Guyana Gold and Diamond Miners Association (GGDMA) and the Guyana Women Miners Association (GWMO) have called on the APNU+AFC administration to rethink the 2017 budget with specific emphasis on the mining sector, as in its current form it “spells doom.”
In a statement to the media on Friday, the GGDMA and the GWMO said that the government’s failure to restore concessions, will result in the gold-mining sector experiencing a decline rather than growth.

“If the concessions are not restored, there will be a definite contraction of production. We will find it difficult to replace aging vehicles (an excavator has a life of 3-5 years in the interior). The sector will see additional downtime due to additional costs for quality equipment and fuel. The sector will see higher costs for start-up and upkeep due to additional VAT on items previously acquired at concessionary rates. This downturn will see a significant spill-over effect that will affect every sector of the Guyanese economy. There will be a fall in production and spending all around,” the bodies said, while stressing that 2017 will be a “very dismal year.”

The GGDMA and the GWMO called on the government to re-examine the measures placed in the budget, which is to be debated next week so as to ensure that the gold and diamond mining industries do not collapse.
“The 2017 budget along with the previously proposed 3% reduction in the Gold Board price for gold and the removal of concessions to the sector, can only lead to lower declarations and a decline in the sector that would take the economy into a negative spiral. There will be no growth in 2017 without mining.”

The mining organisations made it clear that small and medium-scale miners are without a doubt hardworking and noted that without their efforts the country would have “undoubtedly recorded negative growth.”
“Despite the removal of our concessions, gold kept Guyana moving when all other sectors have slowed down,” the statement said, while indicating that the sector is saddened that “the 2017 Budget has no good news for miners.
“Despite championing the valiant efforts of miners, the Minister of Finance in the 2017 Budget has brought proposed measures that will hasten the sector’s decline.” According to the miners’ representatives, there are clear signs of a decline in declaration figures, noting that the declarations this year were propped up by the two international mining companies which contributed to one-third of the gold won.

“Our figures indicate that local mining was down. The minister himself has recognised that there has been a significant slowdown in investment in the mining sector.” It was noted that in his budget speech, Finance Minister Winston Jordan acknowledged the threats the industry will face next year and noted that declining oil prices, coupled with rising oil prices and global issues such as de-risking and climate change, will pose a major risk to the local economy.
“We are shocked that despite this statement, no measures have been placed to help the industry regain its footing,” the miners’ representatives stated.
Accordingly, the bodies said the 2017 Budget affects the sector in several ways and pointed to the punitive measures to be enforced against those who fail to maintain records. “For about 30 years, miners have paid their taxes at the source; there was no need to file additional taxes, now we are given the few remaining days of 2016 to completely realign the sector.”

The associations said that by nature, the mining sector has a “cash culture,” while noting that the sector is dominated by non-accountants and people who are “more familiar with machines than books.”
“We cannot see how the Government of Guyana expects compliance in such a short time. The cultural norms of the sector prevent us from adjusting to this new measure overnight. We cannot be placed on the same level of compliance with coastal-based businesses, which have ready access to non-cash financial instruments,” the mining bodies argued.
It is believed that the move will target compliant larger miners and force small miners who contribute to the bulk of the country’s gold production to go underground.

“Guyana will lose in the long term and our associations will be powerless to convince them to become compliant outside of their capacity. We urge the minister to rethink this strategy. We remind the minister of his statement “one, one dutty build dam.” The men who are supplying the one, one dutty cannot, overnight, comply with your requirements,” the associations stated.
Additionally, the removal of concessions from the sector is of major concern to miners who operate in the small and medium-scale operations.
“The sector in 2015 did not have to pay VAT on heavy-duty equipment, matting, spares and other material used directly in the gold-mining sector. In 2016, VAT was required on heavy-duty vehicles and a phased removal of all other concessions was implemented. We cannot do more with less,” the statement said.

Access to fuel concessions was unrealistic as miners were faced with several hurdles which prevented them from benefitting from the fuel concessions. According to the associations, the Guyana Energy Agency made the agreement impossible to be realised.
“This offer was subsequently taken away from miners. We currently have no fuel concessions. The 2017 budget offers us no hope for any either.”
Moreover, the increase in tributors’ tax from 10 per cent to 20 per cent is of major concern to the sector, as operators are faced with strong objections from miners and in some cases personal violence and harassment from employees who do not wish to have deductions made from their salaries.

“To ask for double is exposing operators to even more aggression. We do not welcome the burden of collecting tax for Guyana Revenue authority (GRA),” the two bodies stated, while calling on the GRA to mount a public awareness campaign to ensure that workers understand that the increase is a GRA requirement. “This would prevent many of the altercations in the interior over this matter. It would also help legitimate miners to convince staff not to leave and work with companies who prefer to pay off the books.”

Additionally, the mining bodies believe that Minister Jordan is ill-advised about the sector and as such, extended an invitation to him along with GRA’s head Godfrey Statia to accompany them on a familiarisation visit to mining areas.
“We are calling on our sector Minister, The Hon. Raphael Trotman to make urgent and strong representation for the sector and to vehemently object to any measure that would lead to contraction of the sector. This is the opportunity for the minister to demonstrate that he truly understands mining and the culture and pressures miners face.”