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Ten companies shortlisted to supply fuel to small, medium scale miners
- as six-month fuel/equipment concession period kicks off
Mining operations are slated to benefit as an impediment, high fuel tax, is expected to be removed
Small and medium scale miners now have the opportunity to benefit from long awaited fuel and equipment concessions as registration was opened as of last week Thursday for qualifying mining operators.
Among the companies selected to source the fuel are Adamantium Holdings, owned by mining magnate Alfro Alphonso. Alphonso’s son, Andron Alphonso sits on the Guyana Gold and Diamond Miners Association (GGDMA) Board as the Vice President. Also included among the suppliers was GGDMA Trading Inc.
Large scale mining establishments have always paid a ten percent tax on fuel versus the 50 percent paid by small/medium miners. After calls for similar reductions from the GGDMA, the Government recently moved to facilitate a lower tax rate. As a consequence, a total of 10 companies received this mandate, with the option to add seven more
During a special meeting at the GGDMA offices on North Road, Bourda on Thursday, the mining operators were presented with the forms to provide the relevant information for determining whether they qualify.
These forms are then to be submitted to the GGDMA, the Guyana Geology and Mines Commission (GGMC) and the Guyana Revenue Authority (GRA), to determine the operator’s qualifications.
The concession agreement listed several prerequisites before the 10 percent excise tax rate (down from 50 percent) on diesel fuel acquisition can be granted to registered medium and small scale miners.
Among the conditions was that the tax exemption would run for an initial period of six months. Miners are also mandated to maintain accurate records of receipt, distribution and usage of the diesel fuel.
The agreement also mandated that the diesel fuel must be used solely in the mining sector and that all miners must be tax compliant in order to benefit.
The 8 other chosen fuel suppliers are Associated Industries Ltd.; MACORP; Chunilall Baboolall, Correia’s Mining Co.; Farm supplies Ltd/General Equipment; JAPARTS; Azeem Baksh; JOHIL; Winston Percival Rambarran; Crown Mining Supplies.
According to Patrick Harding, former President of the GGDMA, the suppliers are regulars who have the required storage structures and transportation in place for the fuel. He noted that once the operators qualify, they can go to the facilities of these suppliers and purchase in bulk.
Meanwhile, the mining equipment listed for tax exemption are ATVs; rock-drilling or earth-boring tools inclusive of jack hammers; tubes; pipes and hoses of vulcanized rubber fittings; other carpet and textile floor coverings; articulated link chain and parts; pumps; impellers; pump housings; shafts; marine propulsion engines and other engines.
Three categories of vehicle have also received exemptions: Under category A operators who declare 5,000 ounces of gold and above annually are granted two double-cab pickups every five years, with no engine capacity, year or model limitations and one motor car for every five years, with a maximum cylinder capacity of 2500.
Category B declarants (2000 to 4999 ounces of gold annually) are granted one double-cab pickup every five years with no limitations regarding engine capacity, year or model, while Category C declarants (between 500 and 1999 ounces annually) are offered one single-cab pickup every five years, with no limitation regarding engine capacity, year or model.
However, declarants of less than 500 ounces annually do not qualify for tax exemptions on motor vehicles for use in the mining sector.
Gold was once considered Guyana’s biggest foreign currency earner, breaking declaration records each year. That was until the world market prices fell two years ago.
For this year, declarations have been down by at least 20 percent. As local commercial banks, which supplied start up financing for some miners to purchase their equipment, began to clamp down on operators, many miners were forced to leave the industry.
Just over a week ago, the agreements for the fuel waivers and other concessions were signed in the Ministry of Finance boardroom, between the Guyana Energy Agency (GEA), the Finance Ministry and the GGDMA.
Present were recently elected GGDMA President Terrence Adams; Harding; GEA Head; Mahender Sharma; and Guyana Geology and Mines Commissioner Rickford Vieira.
Junior Finance Minister, Jaipaul Sharma and a representative from the Guyana Revenue Authority (GRA) were also there.
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