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Govt may reduce purchasing price for gold

The headquarters of the Guyana Gold Board, Brickdam, Georgetown.

The headquarters of the Guyana Gold Board, Brickdam, Georgetown.

Medium and small scale gold miners may soon be paid three percent less than the world market price, a consideration that was Thursday condemned by Guyana’s two miners’ organisations.

Minister of Natural Resources, Raphael Trotman confirmed that the idea is being considered but no decision has been taken. “The discussion on asking gold miners to pay a percentage below the “London Fix” price has been ongoing for many years. There are advantages and disadvantages to it. No decisions have been taken on this as the matter is before the Cabinet,” he told Demerara Waves Online News.

He declined to respond to questions about whether the purchasing of gold at a price less than the world market price would result in smuggling to countries such as Suriname where the royalty and duty are lower than Guyana’s.

The Guyana Gold and Diamond Miners Association (GGDMA) and the Guyana Women Miner’s Organisation (GWMO) on Thursday called on government to “immediately remove from consideration the idiotic proposal to force local gold miners to accept 3% less than the world market price for gold produced.”

“No miner, under any circumstance will support this proposal. Our two associations are united in this position,” the miners’ organisations said in a joint statement.

The GDDMA and GWMO said if small and medium scale gold miners to sell their gold for 3% less than the world market price to the Guyana Gold Board they would lose GYD$8,000 for every ounce of gold sold.

The GGDMA and GWMO claimed that it is a fact that the Gold Board, due to mismanagement, lost over GYD $10 billion of tax payer dollars during the period of 2012 to 2014 and now the government want miners to subsidise this failing institution.

The GDDMA and GWMO contended that that move seeks to ensure that the incompetent and mismanaged Guyana Gold Board stays afloat at the expensr of the miners. “We the miners, see this as another move designed to cripple local small and medium scale miners in a continued move by the current administration to miniaturize the local sector,” the GGDMA and GWMO said

The foreign companies, who mainly export their gold won, will be exempt from this proposal, the organisations said.

They said if the Guyana Gold Board has to bring an end to the purchase of gold at world market price, then that entity should shut its doors. “If the Guyana Gold Board cannot run their operations and be profitable, in contrast to the privately licensed dealers, then they cease operations immediately,” the miners’ representatives said.

The GGDMA and GWMO noted that government has already proposed to remove all assistance to the industry, including VAT relief, fuel relief, duty-free vehicle concessions and tax relief on spares and mining equipment. “This along with potential hikes in rentals, more stringent regulations and additional taxation will certainly kill the already struggling local mining industry.”

The miners’ organisations calculated that “the new burden” will see miners now paying out almost 10% (GYD$25,700 for every ounce ) of the gold they earn to the Government of Guyana.

Contrary to claims by GGDMA and GWMO that there were no consultations, the Minister of Natural Resources said they were consulted as late as last month and those interactions would continue.

“In so far as the absence of consultation goes, the MNR believes that would be an unfair statement. We met with the executive of the GGDMA on Monday and this was one of the matters discussed. It was agreed to exchange documents and to meet again before any decisions are made. It seems as though the GGDMA prefers to consult through press releases. The Ministry will still meet with the GGDMA again,” Trotman said.

GGDMA and the GWMO charged that government has so far made only empty promises and has made life harder for the small and medium scale miners.

“Despite all the rhetoric about consultations, this proposal was secretly developed and put into motion. We are now suspicious of all our previous consultations and ask the government: Can we now trust your word?”.

The GGDMA and the GWMO say they will from next week be meeting with miners across Guyana to inform them about the impending changes and to discuss how it will affect their livelihood.

The GGDMA and GWMO warned that to purchase gold at three percent less than the world market price would worsen social and economic conditions in Guyana. “We are fully opposed to this proposal, which is under active consideration at the cabinet level and we urge the Government of Guyana not to take this foolish measure. This measure will not create jobs; it will kill employment and spending. It will plunge the already stagnant economy further down the spiral.”

“Mining is the leading economic driver of the Guyanese economy and this proposal will kill “the goose that lays the golden eggs”. No other private sector industry currently provides more employment than mining. Crime is tied to unemployment, and in an already slow economic situation, killing off the mining sector will not solve the current problems Guyana faces, but it will magnify them,” the GGDMA and GWMO added.

Gold is Guyana’s single largest private sector foreign exchange earner.

  • Col123

    The royalty for the Royals… tax the crap out of them…. these miners can make more money stealing and hustling those folks with money ..with less work….and don’t have to worry about taxes…

  • Gtloyal

    Give me one reason why miners should sell their gold to the Gold Board at a cut price when there are orher buyers who monitor kitco 24 seven and pay accordingly. Because the ministers have pretty faces?
    This is as stupid as stupid can get. Dredge owners will simply discount the percentage from the workers salary as though they sell to GB and then sell somewhere else. Who will lose? The government and the workers of course.
    Does Mr Trotman think that miners will travel all the way to the towns to sell their production to the GB? People sell where they can get the most money. Miners sell a small portion to the GB for the sake of their records, just “to be on the safe side”. Capiche?
    Its surprising that those who are “up there” can be so dense. Or is this another set up for a rip off?

    • Col123

      Its a tax as much as much as you can get economy… and the subventions will soon be gone in the next budget…watch what your neighbor owns and let your eyes and heart burn ..,,the good life soon come!

      • Gtloyal

        So they are trying to raise the funds which their predecessors got by running their freebased parallel economy? Its remarkable that that was never criticized. Many still love them for that.

        • Col123

          Yea , and that free based economy is now dead… it is time to rejoice as the good times are here again..salud!…see who can run for cover and deal with reality, as the fan goes full blast hitting the stuff!

          • Gtloyal

            Why are you so pessimistic? This is progress. At least they are telling you what they plan to do and give you a chance to adjust. In the past we used to know about it when we see the mansions going up.

          • Col123

            You nailed it!… now I am pessimistic about your level of optimism!..because those who benefit now do not have the ability or the temperament to show off or leave any mansion or anything after they squander their ill gotten gains….at least those mansions will become Heritage sites in the future! attract tourists!

          • Gtloyal

            Those who benefit now do not do so by stealing and have no reason to show off.
            That the mansions at pradoville, built by stealing the peoples’ money will become ” World Heritage sites’ is your opinion? Its a shame that a person can entertain such thoughts. I’d prefer to keep far.