Saying it has been “blindsided” by recent policy changes in the regulation of the mining industry, the Guyana Gold and Diamond Miners Association (GGDMA) on Saturday voiced its objections to a lack of consultations, while announcing that it is seeking an audience with President David Granger to address its concerns.
In a statement issued on Saturday, the GGDMA demanded answers while it questioned the motives for the changes, including the withdrawal of Value-Added Tax (VAT) waivers on heavy-duty machinery for medium-scale miners, a requirement for an annual financial report on the operations of each permit, and a ban on river mining.
Dubbing the decisions as “sudden, rushed and high handed,” the GGDMA said that it was never informed that any of these decisions were being considered and was only made aware of them at the same time as the general public, “long after the decisions had been made and actioned.”
It questioned why, as the lobbying organisation representing the interests of all miners in the gold and diamond mining industry for over 30 years, it was not asked for its views, even as a “token courtesy,” by the regulatory body and the Ministry, which are pressing ahead with implementing the decisions.
“This is not the relationship we envisioned would exist with the current Administration. We thought that an open door partnership and transparent relationship existed between the public and the private sectors in the mining industry. At the very least, the views of the private sector should be taken into account before such drastic action is taken. Rather, it would appear that there was just a perception of a partnership. The reality is that the perceived partnerships has been replaced with a heavy handed, hasty and authoritarian approach,” the GGDMA said, while adding that the “dire scenario of non-consultation and disregard” presently has the stakeholders in the industry worried and stressed as they are uncertain over the future.
‘Retrograde steps for sinister motives’
On the issue of the cancellation of the VAT waiver, the GGDMA has said that despite all the promises and commitments from the current government to waivers, tax concessions and other mechanisms designed to boost production in the industry, miners have been unable to get anything “beyond lip service.” “Now we are told even the conditions we historically enjoyed are to be taken away and we will have to pay even more to work in the industry. The traditional waiver of taxes is now being taken away and we did not even get the courtesy of a consultation,” it said.
The GGDMA explained that while full duties and taxes have always been paid on spare parts for such machines, as long as they have been utilised in the local mining industry, the removal of all duties and taxes on the new machine itself was enjoyed by legitimate miners.
“In the 1990s, the use of heavy duty equipment, particularly excavators, were added as an important tool to aid quantity and efficiency of mineral extraction. Even before the VAT, the Consumption Tax, which the VAT replaced, was waived for heavy duty earth moving equipment to be utilized in the mining industry at all scales of production,” it pointed out.
It further argued that with the removal of the VAT waiver on all heavy-duty equipment in the industry, the additional cost that a miner will have to bear on each new excavator will be between $4.5 million and $7 million, with bulldozers being significantly higher. “Given that these machines typically have a working life in the interior of 3 years, this is an added cost per excavator of approximately GUY $13 million to $21 million over a 10 year period. Such large sums will definitely pose a heavy burden that will be difficult for medium scale miners to bear and may lead to an increase in the number of operators exiting the industry,” it noted.
Additionally, the GGDMA claimed that to date not a single miner has benefited from any of the promised concessions on fuel and other items that were granted last year October for a period of six months to tax compliant miners.
“Despite many tax compliant miners submitting all the requested paperwork and the GGDMA following up and meeting with the representatives of the agencies responsible for administering the concessions, namely GGMC, GRA and GEA, nothing ever materialised during the stipulated time. In the past we had publicly thanked the government for keeping their election promise of granting this concession to miners, however we wish to now publicly state that although a document was executed, no benefits were ever realised by any operator in the industry.
These are retrograde steps, and we believe they are designed with suspiciously sinister motives,” the release said.
Also of concern to the GGDMA is the enforcement of a requirement that financial reports on the operations of mining permits be provided. In this regard, the association is calling for urgent meetings and has sent out a request to meet with President Granger to discuss this and other issues since it objects strenuously to the implementation of any policy without consultation.
It also described the decision to rescind permits for river bank mining as “harsh and unreasonable.”
“The only way that the GGDMA can fathom that such a move is a sensible and justifiable one is if all the operations previously given permission were scrutinised and were all found to be in violation of the mining permission. Otherwise the ‘Peter pays for Paul and Paul pays for all’ approach is very worrying and irregular,” it said.
The GGMC [Guyana Geology and Mines Commission] announced the rescinding of the permits a week prior to the GGDMA statement.
It said that miners who are mining within the limits of the agreements should not be penalised for the actions of those who are in breach of the agreements. It further said that while it understands the GGMC’s desire to enforce the mining permissions/ agreements and to have compliance in the sector, this process should be done via “a genuine private and public partnership,” where there is consultation and education before action. “Transitioning the way the industry works and the manner in which miners operate cannot be done overnight, but it is a process that will take some time. If there is no genuine partnership, an unnecessary burden is placed on all the operators in the industry.
It is only natural that this will result in a growing distrust as operators continue to live in a state of fear and worry with the pressure of not knowing what will happen next and what input they have in serious decisions affecting their living,” it added.
