With gold plunging to a five-year low on Monday of US$1,094.5 per ounce, miners are again seeking the help of government and warning of a downturn in communities that have been dependent on the precious metal.
The Guyana Gold and Diamond Miners Association (GGDMA) said it will be asking the new government for concessions for small and medium scale miners, similar to those enjoyed by the large scale mining companies.
In a press release issued yesterday, the GGDMA said it would hold a high-level meeting with the government towards this end and expressed the hope that it would more than a “talk shop.”
The GGDMA has been engaging the previous government on the issue since 2013.
Arguing that small and medium scale miners have for the last few years “been producing more gold than is currently projected to be produced by the large scale companies” the GGDMA warns that the new world market price could “spell doom for many smaller operations” if long outstanding issues and concessions are not pursued as an aid in cushioning the gold price drop.
According to the press release issued yesterday, the association said that there has already been a noticeable downturn in the economy of the hinterland mining communities such as Bartica, Port Kaituma, Mahdia among others, while many communities such as Linden, Diamond, Beehive, Ann’s Grove, Essequibo Coast where miners reside have also seen a reduction in economic spending power.
These effects have been particularly felt because the cost of production, for the small and medium scale miners of gold and diamonds, has remained largely unchanged while the price of gold continues to fall. Since many of the small and medium scale operations are operated through self-financing miners are finding it extremely difficult to meet their obligations; thus the sector is now plagued with repossessions off mining equipment and property as well as defaulting bank payments, the release said.
The GGDMA said that analysts are projecting that price of gold will fall to US$1,000 an ounce in the near future and the miners are calling for these concessions so that the can have an opportunity to prosper and the sector will not in future require a bailout.
