Gold slide… Mining operations drop 40 percent, equipment sales decline – GGDMA

Government representatives and miners during a critical
meeting yesterday to discuss the gold sector’s performance.

Guyana’s biggest money earner – the gold sector – is indicating a massive 30 percent drop in business in equipment sales and fuel, with operations scaled back as much as 40 percent.
This is according to preliminary results presented by miners yesterday during a critical meeting with Government on the sector.
Government and miners have been extremely worried about the implications of the slowdown of the sector which has been boosting the performance of the country in recent years, so much so that gold has surpassed both rice and sugar.  Gold brought over US$600M in foreign currency to the country last year, almost three times more than rice.
Government had expressed alarm after gold declarations fell short of projections by 20 percent for the first five months of this year. The announcements had seen accusations flying back and forth, in which miners were accused of hoarding and smuggling, a charge that they denied. Rather, they said, the poor declarations were as a result of lower productions, brought on by a steep drop in gold prices on the world market last year.
Miners were also worried about an ongoing campaign in which authorities have been carrying out increased control checks on gold dealers and mining operators to ensure that record-keeping requirements were being adhered to.
Involved in the meeting yesterday were the Ministry of Natural Resources and the Environment; its supervisory authorities – Guyana Geology and Mines Commission (GGMC) and Guyana Gold Board (GGB) – and executive members of the Guyana Gold and Diamond Miners Association (GGDMA). Also present at the Ministry were a number of licenced gold dealers.
Earlier this month, following another meeting, GGB had embarked on a number of activities which the statement said was agreed to by all stakeholders. These included visits to the gold dealers.
“These activities comprised an outreach to visit all dealers, including some of their sub-agents. Some business entities in the capital that have a GGMC trading permit were also visited. It must be emphasized that the primary concern of those activities were to ensure that there was proper accountability of the records by those licenced to trade gold,” the joint statement said.
Also present yesterday was Natural Resources Minister, Robert Persaud.
With regards to hoarding and smuggling reports, the statement yesterday said it is too early to tell.
“It was noted that there is speculation of hoarding, smuggling and the use of the gold trading business for other illegal activities. However, there is no definitive conclusion to any of those claims. The records of the supervisory authorities only indicate that there is a lower level of declaration by the mining industry in 2014 when compared to the same period in 2013.” However, the records also showed that there are improved levels of sales by miners to the licenced dealers, especially in the districts that the GGB’s offices are closed.
“It must be noted that prices on the world market for gold have increased over the last seven days and we are all hopeful of improved prices for better sales to the GGB and to the dealers.”
According to Persaud, his Ministry stands ready to help improve the levels of declaration.
However, there are still concerns over the high costs of operations, with calls being made for a speeding up of a number of incentives that were on the table.
In January, miners had asked President Donald Ramotar for a number of relief measures, including tax breaks on 4×4 vehicles, reduction in rentals, and improvement to the hinterland roads. The incentives are being handled at the levels of the various Ministries of Government and awaiting approval of the appropriate regulations, the statement said.
“However, the GGDMA has noted that whilst some incentives have been granted, we are in the sixth month of year 2014 and are still awaiting the follow through of the majority of the incentives for the general gold mining sector.  It was underlined that the GGMC has spent monies to upgrade the infrastructure of the mining districts which has continuously improved the working conditions of all miners.”
Meanwhile, miners were able to successfully push for a review of the Gold Board Act which among other things mandates the time that they can hold onto gold produced.
“A sub-committee will be established to undertake the task of reviewing the entire Act. Members of that sub-committee will include both private and public sector representatives.”
The meeting also called for a revision to some of the conditions for the licencing of gold dealers. “This matter will be explored to ensure that there is greater efficiency in this market. The meeting was also informed that the first auction by the GGMC will be done within the next four weeks and the next lottery will be done within eight weeks. In addition, the issue of crime in the mining industry will be addressed by a meeting to be held with the Guyana Police Force.”
Regarding the closure of the Bartica sub-office and operations in Charity, Essequibo, both Government and the miners agreed that the levels of declarations were not impacted.
GGB closed the Bartica office after it started investigations of staffers there for alleged fraud.
According to the joint statement, “the licenced dealers are still working in Bartica, and providing the necessary services to the gold mining sector. The GGDMA restated the call for all gold to be sold to the GGB or licenced dealers and that the licenced dealers must be accountable for the gold they are purchasing for Guyana. The GGDMA is committed to the improvement of the gold mining sector.”
The spin-offs from gold have been good for Guyana, with hundreds of excavators sold and massive loans taken from the banks. Miners have also showing an increased interest in buying vehicles and additional properties.
GGDMA is set to meet with its members tomorrow at its North Road offices to discuss the situation.