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Falling gold price: Time for bigger agri push; more efficient gold production- Deputy Central Bank Governor

Last Updated on Saturday, 26 December 2015, 20:59 by GxMedia

Left to Right: President of the Guyana Gold and Diamond Miners Association, Patrick Harding; Commissioner of the Guyana Geology and Mines Commission, Rickford Vieria; Chairman of the GGGMC Board, Clinton Williams; Chairman of the Guyana Gold Board and Deputy Governor of the Central Bank, Dr. Gobin Ganga; Minister of Natural Resources, Robert Persaud; Permanent Secretary of the Ministry of Natural Resources, Josylyn Mc Kenzie and the General Manager of the Guyana Gold Board.

Deputy Governor of the Bank of Guyana, Dr. Gobin Ganga on Saturday recommended that the country further diversify its agriculture sector and lower the cost of gold production to cushion the impact of the sliding price for the yellow metal.

Ganga made the recommendations against the background that gold exports accounted for 50 percent of Guyana’s foreign revenue in 2013.

With gold now selling at just over US$1,200 per ounce compared to about US$1,700 during early last year, Ganga said efforts would have to be made to earn more foreign exchange from the agriculture sector. “We need to do far more. We need to be very much more efficient in terms of agriculture because our potential really lies in agriculture and we do have the capacity to ensure not only rice and sugar but from non-traditional exports and we can also do very much in forestry to ensure that we have an increased enhanced export earnings and will be a tremendous good to the economy,” he told Demerara Waves Online News (

Noting that gold was at one time selling as low as US$600 per ounce, he said miners would have to invest in technologies and find other means of lowering cost of production while increasing output. “The miners are involved in technology to increase production and productivity and that will benefit tremendously. It is not so much the high price but it’s your ability to compete and your ability to produce at a lower cost that will provide for enhanced export earnings and profitability for the miners to encourage them to be in the sector,” he said.

Gold price plummeted from US$1,673.75 in January to US$1,204 at the end of December 2013, resulting in a loss of almost US$452 per ounce. He reported that there were also118 price increase for gold ranging from 25 US cents to US$64.50 but 131 reductions from 25 US cents to US$140.50 cents during 2013.

With fuel being a major input in the mining sector, the Deputy Central Bank Governor said there was no need to worry if the price of oil remained in the range of US$75 to US$95 per barrel. He forecast that shifts towards green energy would impact significantly in the medium to long term. He said Guyana’s foreign reserves were equivalent to about 4.2 months of imports.

Citing latest available figures, Ganga told an appreciation event for new appointments at the Guyana Geology and Mines Commission (GGMC) and record gold declarations that gold exports 482,500 ounces raked in UDS$848 million or about 50 percent of the country’s export revenue for 2013. “It was a very, very good stabilising factor in the Guyanese economy providing the wherewithal for relatively stable exchange rate and also for lower inflation in the economy,” said Ganga who spoke at the event in his capacity as Chairman of the Guyana Gold Board. Gold exports of 455,000 ounces earned US$717 million in 2012.

The GGB Chairman said that gold declaration last year increased by about 10 percent to 481,000 ounces in 2013 up from 438,000 in 2012.

In brief remarks, Minister of Natural Resources Robert Persaud sounded an appeal for all gold produced to be declared rather than smuggled. “I want to challenge everyone as we get into full production that we seek to declare every single ounce of gold that is produced in this country because we continue to receive reports within the Guyanese community and even our allies outside of Guyana about reports and allegations of smuggling,” he said.

More than one year ago, a huge quantity of gold was stolen from aboard a Guyanese cargo ship that had been docked in Curacao. Guyanese authorities had said that there was no credible evidence that the gold had come from this country.

There are also unconfirmed but repeated reports that huge quantities of Guyanese gold are smuggled to neighbouring Suriname where the total taxes are lower compared to those levied by Guyana.