In the face of the fluctuating international price for gold, the Guyana government is considering a proposal by the Guyana Gold and Diamond Miners Association (GGDMA) to import cheaper fuel.
Minister of Natural Resources, Robert Persaud announced that government was exploring that proposal to cushion the impact of the rising cost of fuel, regarded as “the major operational cost faced by miners.”
“In this regard, the direct importation by the GGDMA and/or its designated representative of fuel and distribution of fuel to the mining community in accordance with national guidelines is being positively being considered,” Persaud said in addressing Mining Week 2013-Opening and Award Ceremony at the Guyana International Conference Centre (GICC).
GGDMA Vice President Charlie Da Silva confirmed that “we had a very good response” from government for the cost-saving measure. “The whole idea is to cushion the low gold price that we are experiencing and once we get the license to bring in the fuel, then we’ll put all the mechanisms in place, having done a lot of preliminary work,” he told Demerara Waves Online News (www.demwaves.com).
Da Silva said while Venezuela and Curacao were ready sources, the GGDMA would most likely buy its diesel supplies from Trinidad at much lower price. “We’ll be saving a lot of money on fuel so instead of asking the government to give us a break on duty on the fuel, we are willing to even pay the duty just to give us the opportunity to bring in the fuel and this would cushion our low gold price at the moment,” he said.
The GGDMA official said if all goes well, the fuel could be sourced at GUY$650 per gallon and sold at GUY$5,000 per drum less. Authorities said fuel accounts for 35 percent of operational costs.
The London Fix last Friday closed at US$1,377.50 per ounce, not far from the US$1,200 when local miners begin to worry. Gold is purchased by the Guyana Gold Board or its authorised dealers at slightly different prices based on purity levels.
President Donald Ramotar, in his remarks, urged miners to pay their taxes and cease bribing public officials. “I always say for every bribe taker, there’s a briber and I ask those of you who are in the position to offer bribes not do so, to stop it and let us try to work on it from both ends so that we can clean up the image of the industry and the image of our country,” he said.
Other concessions that the Ministry of Finance is examining include a waiver of duties and taxes on new Double Cab vehicles for use in the mining sector. “It is proposed that the concession would be available to miners based on their gold declarations to the Gold Board in the previous year and miners would be eligible for consideration once they have declared minimum quantities. This will serve as another measure to prevent leakages,” said Persaud. The GGDMA has revised a proposal for the waivers because they can only be accessed via an via an Investment Development Agreement (IDA).
The Natural Resources Minister also announced that the Finance Ministry and the Bank of Guyana are studying the GGDMA’s proposal for the Gold Board to pay miners in foreign exchange to invest in mercury free-technology. Guyana hopes to meet the 2020 deadline for a ban on mercury that has polluted several mining areas and has been found in the blood streams of miners.
Latest statistics show that gold mining accounts for 78.2 percent of the total value of mine output. The value of gold produced was (G$137,454.8 million) increased by 28.9 percent over 2011. The quantity of gold declared from January to July for 2013 increased by 23.23% more than the quantity reported for the comparative period in 2012. Up to Saturday, more than 310,000 ounces of the precious metal were produced compared to 270,000 ounces for the same period.