Miners want foreign exchange for gold board sales

The Guyana Gold and Diamond Miners Association (GGDMA) is lobbying the government to allow miners to retain up to 50% of the value of gold they sell in foreign exchange.

The miners association made the request at a meeting with President Donald Ramotar and two of his ministers on Wednesday.

A statement by the GGDMA following the meeting said that the foreign exchange facility had been in place for over 25 years and that miners were allowed up to a 100% facility on foreign exchange. It added that there was a change in November of 2011, when the Guyana Gold Board (GGB) advised miners that foreign exchange was not available. This had been the month of the 2011 general elections and events of this type usually precipitate capital flight and tightness in the market. Sections of the business community complained this year of a shortage in the availability of foreign currency and the rate of the US$ against the local currency has appreciated. Analysts say reduced foreign currency inflows from sugar and the barter arrangement for rice over the last few years have reduced the availability of foreign currency.

With Finance Minister, Dr Ashni Singh and Minister of Natural Resources, Robert Persaud also in attendance at the meeting, the GGDMA urgently requested that foreign exchange be made available to small and medium scale miners “during this crisis of falling gold prices, for them to import much needed spares and machinery, since some companies are taking advantage of the miners”. The association also noted that the availability of foreign exchange encourages miners to sell their gold to the GGB. Analysts point out that if the foreign exchange is not available, miners will resort to the parallel gold market with all of the attendant implications.

Miners also pressed the government on crime and said that they were very concerned about the hike in murders, violence, illegal firearms, narcotics, trafficking in persons and other activities in mining communities. The miners said that they have previously lobbied on ways to address these problems: reducing the delay in treating with firearms licence applications, permits for miners to set up their own security service and work permits for non-Guyanese.

Support was also expressed for the appointment of Rickford Vieira as the substantive Commissioner of the Guyana Geology and Mines Commission (GGMC), the statement added. “GGMC needs a confirmed Commissioner to manage and give direction to the mining industry, especially in the gold and diamond sector, in this critical time of falling gold prices, rampant illegal mining and the upsurge of criminal activities in the hinterlands of Guyana. GGDMA supports the appointment” of Vieira,” the statement said.

Also restated at the meeting was the miners’ call for a subsidy on fuel for the mining industry. The GGDMA has also proposed that they be allowed to import their own fuel. The association stated that fuel accounts for 25% to 30% of the cost of production.

A waiver of taxes on the importation of 4×4’s and four-door open-back vehicles was also requested at the meeting. The miners contended that while the vehicles are deemed as luxury vehicles and attract heavy import duties they are “necessary for safe travel, over sometimes impassable roads.” The GGDMA said that the four-door vehicles also provide an additional form of security.

Prior to listing their needs in the statement, the GGDMA stated that gold production for the year so far was 300,000 ounces against a target of 460,000 ounces. This target if met would surpass the 456,000 ounces of gold produced by Omai Gold Mines Limited and other miners in 2001.

The GGDMA also argued that the mining industry provides around 15,000 jobs directly and indirectly to 100,000 to 150,000.

It said that the GGDMA is committed to environmentally friendly mining and that the association is in discussion with the regulatory authorities on a reduction in the use of mercury, improvement in the recovery rate from the sluice box, alternative recovery systems and reclamation and rehabilitation systems.

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