Two umbrella mining bodies are calling on the government to reconsider a proposal which they said will result in small and medium scale gold miners losing $8000 for every ounce of gold. According to a joint release from the Guyana Gold and Diamond Miners Association (GGDMA) and the Guyana Women Miners Organisation (GWMO) on Thursday, the proposal will see local miners paying 3% less than world market prices for their gold.
“No miner, under any circumstance will support this proposal. Our two associations are united in this position”, the mining bodies noted. According to the release, at current market prices, miners will lose $8,000 for every ounce of gold sold noting that the move will adversely affect local small and medium scale miners. It said that the foreign companies, who mainly export their gold won, will be exempt from the proposal.
However, in a statement the Ministry of Natural Resources makes clear that the discussion on asking gold miners to pay a percentage below the “London Fix” price for gold has been ongoing for many years. There are advantages and disadvantages to it. No decisions have been taken on this as the matter is before the Cabinet, the release added. According to the ministry in so far as the absence of consultation goes, the MNR believes that would be an unfair statement by the GGDMA/GWMO. “We met with the executive of the GGDMA/GWMO on Monday November 14, 2016 and this was one of the matters discussed. It was agreed to exchange documents related to the matter and to meet again before any decisions are made. Government of Guyana has to lessen losses arising from bad decisions made by the previous administration and is examining all the ways of doing so. Despite GGDMA’s and GWMO’s publicizing of this matter, the Ministry of Natural Resources remains committed to finding solutions and building meaningful partnerships through consultations with these organisations.”
Meanwhile, the two bodies noted that the Guyana Gold Board, lost over $10 billion during the period of 2012 to 2014 which it blamed on mismanagement. “Buying gold from local miners at the fixed world market prices has been the norm for the Guyana Gold Board and Gold Dealers in Guyana for over 20 years”, the miner’s bodies said.
According to the miners, the proposal will add to intended moves by the government to remove all assistance to the industry, including Value added tax (VAT) relief, fuel relief, duty-free vehicle concessions and tax relief on spares and mining equipment. They said that the move is likely to impact heavily on the industry which they noted is struggling.
It was explained that the proposal will see miners being made to pay almost $25,700 for every ounce of gold. In addition it was noted that the move is being tabled without any consultation with miners or the mining associations. They said that despite all the rhetoric about consultations, the proposal was developed and put into motion adding that they are no unsure of previous consultations made with the government. “We demand an immediate halt to this proposal and a commitment from the Government of Guyana that they are serious about meaningful consultations”, the GGDMA and GWMO said.
They noted that they will be meeting with miners across the country to inform them about the impending changes and to discuss how it will affect their livelihood. An outreach programme is planned and will commence next week, the two bodies said.
The two bodies noted that mining currently ranks high in terms of providing employment to the population as they cited the industry’s importance to the economy. Guyana’s gold mining sector has been performing well and this year the target is set to create history as it edges closer to the 600,000 ounces production mark, the highest ever recorded. At the end of September, gold declarations were 94 per cent more than it was at this time last year, and remains on track to surpass the 555,000 ounces projection set at the start of 2016. The Government Information Agency (GINA) quoted Minister of Natural Resources, Raphael Trotman, as saying, “In mining, we are doing relatively well,” in that gold declaration for the first quarter of the year stood at 161,942 ounces, and that the figure could pass the 600,000 ounces. Trotman said that the sector has been making positive developments in reducing the incidence of gold smuggling, an issue which has hampered declarations over the years.