Gold declarations continue to slump and to date are 19 per cent lower than they were for the corresponding period last year.
The slide in declarations began since earlier this year and overall production for the year is likely to be lower than last year as miners withdraw from the sector or scale down production for a variety of reasons, including a drop in gold prices. Gold is priced in the US dollar and tends to fall when the US currency strengthens, and a rally in the dollar index earlier this month knocked gold to a 4½ year low at US$1,131. However, Reuters reported on Friday that gold climbed back above $1,200 an ounce on Friday after a surprise rate cut by China fuelled expectations that demand could rise in the world’s biggest gold consumer.
For the past few years, gold has been a mainstay of Guyana’s economy but this year, miners, confronted with a variety of factors, have exited the sector. Minister of Finance Dr Ashni Singh has revised projected end-of-year gold declarations downwards to 450,000 ounces. The gold industry achieved total declarations of 481,087 ounces last year, representing the highest level of production in the history of the industry. Yesterday, an official told Stabroek News that gold declarations to date were 19% lower than for the corresponding period last year.
Yesterday, in a statement released through the Ministry of Natural Resources and the Environment (MNRE), the Guyana Geology and Mines Commission (GGMC) outlined the assistance and concessions provided by the government to the small and medium-scale mining sector.
“The importance of the gold mining sector to our economy cannot be over emphasized since gold has been the largest earner of foreign revenue for the last seven years,” the statement said while noting that the gold mining sector has been the catalyst for economic growth and has improved the economic well-being of citizens of Guyana. “This has been achieved because of the consistently rising levels of gold declaration over the last decade,” the statement said.
According to the GGMC, given the low gold prices on the international market and the resulting impact on the mining operations and the mining sector, the Government of Guyana, through the MNRE and the GGMC, engaged the Guyana Gold and Diamond Miners Association (GGDMA) and identified areas of concern and implemented measures aimed at ensuring that the sector remains viable.
The statement listed the interventions including duty free concessions for All Terrain Vehicles (ATV), excavators, bulldozers and other machinery used in the mining industry. “These waivers on duty are available to new entrants to the sector and for current miners based on production levels,” the statement said.
It added that government recently approved the granting of waivers for double-cab pickups to miners based on their production levels which was used to determine the various categories and associated waivers that would apply. Three categories were established, namely Category A (Declarants with 5,000 ounces and above annually), Category B (Declarants between 2,000 – 4,999 ounces annually) and Category C (Declarants between 500 – 1,999 ounces annually), the statement noted.
It said too that 19 suppliers of mining equipment and spares were approved for tax waivers on the importation of said equipment. “This will reduce the cost of spares and critical supplies for miners and is in addition to the items that are currently imported duty free, such as pumps, flexes, and matting etc,” the GGMC asserted.
The agency also pointed to the fuel licence granted to the GGDMA as well as a concession for miners where they only pay 10% CIF Excise Tax on the fuel. The agency also referred to the Mercury Free Mining Development Fund as well as the fact that miners have access to 10% of their gold sales available in US dollars to assist in retooling, capital acquisition and diversification of investments.
It also pointed to improvements in hinterland infrastructure as well as the availability of new areas for mining.
The statement also noted that the GGDMA proposed to the ministry and the commission, the reduction of rental paid on mining properties and the lowering of royalty payments from the current 5%, given the low gold prices that prevailed. “In this regard, a meeting was held with the Association, GGMC and the Ministry to discuss the request of the Association and it was agreed that the Association will submit a proposal recommending the rates for royalty and rental payments which the Ministry and the Commission will review,” the statement said.
The GGMC also pointed to collaboration as it relates to work permits, hinterland security and training of human resources.
“A thriving and vibrant mining sector is the goal of the Government and all miners/stakeholders. In this regard, the Government of Guyana remains steadfast and reiterates the commitment of the Ministry and GGMC to working in partnership with GGDMA and all stakeholders in dealing with challenges of the industry. The Government and its Ministries/Agencies will continue to work to ensure that the sector achieves its full potential, while contributing significantly to the development and growth of Guyana. The Ministry and GGMC will continue to work with the GGDMA,” the statement asserted.
