Falling gold prices: Miners want slash in diesel duty

Last Updated on Saturday, 26 December 2015, 21:01 by GxMedia

Worried about the impact of falling international gold prices, the Guyana Gold and Diamond Miners Association (GGDMA) late Thursday said it would appeal to government to reduce duty on diesel based on individual production.

GGDMA President, Patrick Harding told the Annual General Meeting (AGM) questioned how many miners could bear the brunt of the estimated US$500 drop in the price of the yellow metal.

“We can ask the government for a reduction in the duty for fuel behind consumed by miners in the mining industry,” he told reporters after the AGM at which he was re-elected president for a second straight term.

He noted that the price has slumped from US$1,750 per ounce to around US$1,205 during the past six months. The GGDMA plans to ask Natural Resources Minister to secure lower duty on fuel to help cushion the impact of declining gold prices.

Gold closed Thursday at US$1,232.75 on the London Fix.

While the GGDMA would like all miners to benefit from duty exemptions or reductions, Harding said that would be too difficult to monitor. As such, he suggested that high-producing miners who have sold the metal to the Guyana Gold Board should be eligible for cheaper fuel.

“From those records, they can monitor your sales and monitor your contribution and you will get a reduction or a repayment based on your production level,” he said.

A possible target to benefit from 50 percent or 100 percent fuel duty exemption, he suggested, could be 250 ounces of gold.

The miners association also wants suppliers of heavy duty machinery like MACORP to extend their repayment period to give miners.

The GGDMA feared that if the tax break on fuel is not given, new miners numbering five to 10 percent could be forced to close their operations. At the same time, he said most of the small miners do not produce enough or do not sell to the Gold Board.

Another suggestion was for suppliers of heavy duty machinery to extend their repayment period from 12 months to either 24 or 36 months to allow for lower repayment costs over a longer period.