Failure to implement promised sector concessions may have helped trigger the current dramatic fall in gold production, Stabroek Business has been reliably informed.
Amidst sharp differences between operators in the mining sector and government over the likely reasons for reduced gold declarations to the Guyana Gold Board, the Guyana Gold and Diamond Miners Association (GGDMA) has told Stabroek Business that it expects an ongoing survey to provide some definitive indications as to “the real reasons” for the drop in gold production. The official disclosure that gold production could have fallen by as much as twenty per cent over the same period last year has triggered a considerable measure of official brooding and reportedly deepened an already existing rift between government and the mining sector.
Last week, GGDMA Administrative Coordinator Colin Sparman confirmed that the industry and government
were still at odds over what the latter says has been the hoarding of gold by miners though the GGDMA official pointed to what he said were other likely reasons why production levels have been reduced.
Government has said that based on calculations made up to May this year, declarations have dropped by a staggering 20 per cent and while the GGDMA has conceded that there has been a drop in gold production during the early months of this year it says that suggestions of hoarding are tantamount to threats against miners and an attempt to criminalize the industry.
Sparman told Stabroek Business, meanwhile that failure up until now to implement concessions in the mining sector already agreed to between government and the miners could have triggered lower production levels
What now appears to be a decidedly strained relationship between the Ministry of Natural Resources and the miners is a reflection of government’s anxiety over what it says is significant loss of revenue from a sector which, given high gold prices on the world market for several years, has buttressed the country’s foreign exchange earnings in circumstances where the other traditional foreign exchange earners continue to under-perform.
The GGDMA has not commented on official estimates putting foreign exchange losses at around US$100 million as a result of less than officially anticipated levels of gold sales to the Gold Board.
Sparman says that the accusation had given rise to a measure of resentment in the mining community.
This week, the GGDMA official said that there were indications that there had been a decline in gold production and that the Association had already warned that the sector was now unlikely to reach its 500,000-ounce, 2014 projected production target.
But far from embracing the official hoarding theory the GGDMA official told Stabroek Business that the slow pace in the implementation of measures which it said had been approved by President Donald Ramotar in an effort to reduce costs and improve operating conditions in the sector may well have been a factor influencing gold production levels this year.
Last week Sparman alluded to bottlenecks at the level of the Guyana Revenue Authority (GRA) with regard to agreed duty-free concessions on terrain-friendly vehicles for miners. At the same time he told this newspaper that government-approved arrangements for the mining sector to be allowed to legally import its own fuel supplies also appeared to have been stalled. He said that issues pertaining to the rental of properties still remained to be settled between government and the mining sector.
Three miners who agreed to speak with this newspaper last week confirmed that there had been a scaling down of operations in “most mining areas” though they insisted that the sector remained vibrant and potentially profitable. One of the three miners who told this newspaper that he had been “in gold” for almost twenty years told Stabroek Business that the full, and effective implementation of all of the agreements reached between the miners and government regarding concessions to the sector was likely to witness an increase in mining operations and, as a consequence, increased declarations to the Gold Board.
Sparman meanwhile told Stabroek Business that it was “highly desirable” that government and the mining sector continue to work for “collective solutions” to such challenges as may arise in the mining sector; and in the wake of assertions that falling gold prices may be triggering an exodus from the mining sector.
Several weeks ago the GGDMA told this newspaper that while the interests of the miners and the Guyana economy were best served by the highest possible prices, prevailing prices still allowed for a profitable mining sector. Last week, Sparman restated that view though he said that it was in the interest of the sector that in the current circumstance of less than stable prices, that it continued to benefit from the most favourable conditions.
Meanwhile, the GGDMA official told Stabroek News that its survey which will focus on mining communities around Bartica, Port Kaituma and Lethem is probing the likely causes of current reduced gold production during the first half of 2014.
