Incensed at what it said were attempts by government officials to criminalize the entire mining industry over the 20% drop in gold declarations, the miners association has summoned an emergency meeting for June 26th to address the way forward.
In a statement yesterday the Guyana Gold and Diamond Miners Association (GGDMA) also pilloried the Ministry of Natural Resources and the Environment over the resuscitation of an “archaic” law which it says threatens miners and other stakeholders with jail terms of up to five years for failing to sell gold within a specified period.
Sources say this law is the Gold Board Act of 1981 which had contained stringent provisions meant to stamp out smuggling and illicit foreign currency transactions during the economic decline of the 1980s. Application of the Act led to searches of homes for gold.
This Act and its repercussions are what miners are now very concerned about.
Over the last month, concerns have grown over the slide in gold declarations as the precious metal has been a driver of the economy over the last five years and a pivotal source of foreign exchange. Govern-ment officials in recent weeks have sounded an alarm at the situation and President Donald Ramotar and others have said that miners are hoarding gold.
However, miners and industry insiders have argued that the lower declaration is a result of a drop in production and other factors such as mined out lands. This point was stressed by the miners association yesterday and it denied that miners were hoarding gold.
“The GGDMA believes that the real problem lies in reduced production for the first half of 2014. As a result the GGDMA has commissioned a study to investigate the reasons for lower production figures for the first half of 2014 with an intention to demonstrate that it is a reduction in production rather than deliberate low declarations”, the association said.
It added that the results of this study will be made public once completed and should demonstrate beyond any doubt the real cause for the shortfall in the Government’s budgeted gold figure.
“Production and declaration must go hand in hand and miners cannot declare gold they have not won. Despite an earlier position that the gold declaration was below production miners have now seen documentation that proves contrary and hence the decision to conduct a more in depth study of production figures”, the statement added.
The GGDMA said while it acknowledged government concerns over reduced revenue from gold “the miners cannot be made the “fall guys” for this situation”. The Association said it has stressed to its membership the importance of declarations to the economy and has been actively pressing for increased declarations.
“Meetings have been ongoing with the Ministry and it is shocking that these have resulted in the application of threats and coercion; this does not sit well with the industry”, the GGDMA lamented.
While recognizing the importance of mining and gold to the economy, the GGDMA declared that “any attempt to criminalize and bully legitimate mining operations cannot and will not be accepted.
GGDMA is calling on all miners to attend this meeting which will be held at the Association’s headquarters at Lot 29 North Road, Bourda on June 26th. Responding to a question from Stabroek News during a news conference at State House on June 7th, Ramotar said “There has been a drastic reduction in declaration which means that there seems to be a lot of hoarding taking place.” He added “That’s a very worrying situation at this point in time.” he said. The President said it was a serious issue that can have an impact on the economy and “I hope that we don’t have to use any coercion…that by persuasion they will make their declaration.” However, industry insiders have pointed to a production drop.
“There is a crisis in the industry which started since last year,” GGDMA consultant Edward Shields told Stabroek News on Saturday, citing the drop in gold prices. “I am aware of many people who closed their operation,” he said adding that some closed their operations voluntarily while others were forced to do so.
Shields, in a previous interview, had dismissed hoarding by miners as the reason for the drop in declarations.
While saying that there is no one reason for the drop in declarations, he said no miner hoards gold particularly with the drop in gold prices and many are struggling to stay afloat. “The average miner cannot afford to keep gold,” he said.
The official stressed that the price drop has affected miners significantly. He recalled that the GGDMA in the wake of the drop in gold prices has been lobbying government for concessions and government agreed to give certain incentives but nothing has happened.
He pointed to a current campaign by the Ministry of Natural Resources for miners to declare their gold and said that the GGDMA supports the position that miners must declare their gold to the legitimate bodies. However, with the decline of 20% being a significant amount,
Shields noted that last year only five miners declared over 5,000 ounces of gold and a few hundred declared over 100 ounces of gold, and said that the authorities are “barking up the wrong tree.”