Guyana’s recent foreign currency shortage appears to have caused government to consider adopting Suriname’s model to ensure that more earnings from gold sales goes directly to the national treasury.
“Suriname has a model which we are looking to incorporate in whole or part here so we want to facilitate trade but the function of the licensed dealers, as agents of the Gold Board, is to ensure that foreign currency is earned for the country so that is why they are licensed,” ,” Minister of Natural Resources, Raphael Trotman told Demerara Waves Online News.
Demerara Waves Online News was told that Suriname’s gold producers are required to take their raw gold to the partly government-owned refinery where it is refined, made into gold bars and certified as 99.9 percent pure. Exporters are required to pay a refining fee and taxes and royalties to the Suriname government. Suriname’s tax department has an office at the refinery which seals the gold and receives the taxes before the metal is exported.
Suriname’s government recently decided that gold exporters must sell a percentage of the gold to the Central Bank to ensure the country rebuild its depleted foreign reserves.
Ministry of Finance sources say figures show that the Guyana Gold Board’s direct exports amounted to US$200 million and US$375 million by dealers who purchased gold from small and large scale producers.
Of that amount, estimates are that two-thirds or less actually trickled into the national economy, with a lot being held overseas or in local foreign exchange retention accounts. That situation, the sources said, played a major role in the severe foreign exchange shortage experienced earlier this year.
Overall, Guyana exported 712,714 ounces of the precious yellow metal last year, with small and medium scale miners accounting for an estimated 475,000 ounces.
Earnings from Guyana’s two major large scale gold producers, Troy Resources and Aurora Gold Mines/ Guyana Goldfields go directly to the companies with only the royalties being paid to government. Figures show that Guyana Goldfields exported 156,000 to 160,000 ounces of gold last year on which it paid US$16 million in royalties, while Troy Resources paid US$7 million in royalties on the 77,000 ounces it exported.
Official figures released on Sunday, April 9, 2017 by Guyana Goldfields show that in 2016 the company paid over US$12 million wages, bought US$250 million in local supplies and contributed 8 percent of 150, 000 ounces of gold to Guyana’s economy.
Demerara Waves Online News was told the large scale producers are being permitted to export their gold directly and only pay royalties is in keeping with their investment agreement.
Trotman said government was re-examining its position that the Guyana Gold Board should cease purchasing gold as part of an overall regime that ensures that most of Guyana’s gold sales are injected into the country’s economy. “We were looking to get out of it but I believe the Gold Board will always have to have a place there and how do we ensure the repatriation of an acceptable percentage of the proceeds of the gold,” he said.
Back in 1986, the Guyana Gold Board was established to be the sole gold purchaser with the main aim to secure foreign exchange. He said the Ministry of Natural Resources and the Ministry of Finance were examining ways of perfecting the system “because ultimately the dealers are agents of the State to sell and to garner foreign exchange.”
The Guyana dollar last month slipped to as much as GYD$250.00 = US$1.00 on some transactions.