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More tax breaks mulled for gold miners as prices fall
Government says that it is considering a number of tax breaks and faster processing of work permits as part of the measures to deal with a worrying drop in gold prices.
Yesterday, Minister of Natural Resources and the Environment, Robert Persaud met with various stakeholders of the gold sector to discuss the issue. The meeting was attended by representatives from the Guyana Gold and Diamond Miners’ Association (GGDMA), licensed gold dealers, the Guyana Geology and Mines Commission 
(GGMC) and the Guyana Gold Board (GGB).
According to Minister Persaud, the price of gold has hit a two-year low, falling below US$1,400 per ounce.
He noted that since the beginning of 2013, prices have been marginally declining. Some of the factors which have caused this continuous decline in the price of gold are the effects of the Cyprus bail out in the European Union and the selling of reserve gold by the central bank of that country, as well the possibility of more gold reserves from other members of the EU being sold to cover the larger bail out of countries.
“The slowing down of the Chinese economy and the decision by the United States to move away from quantitative easing as well as lower consumer confidence are some of the additional factors that are impacting on the downward trend of gold prices,” the Ministry said in a statement yesterday.
“The various stakeholders at the meeting said that the price of gold is sometimes very unpredictable and the quantity of gold declared in and exported by Guyana will not influence the global market since we are a price taker in this situation. However, the global price of gold will affect the level of output, investment and earnings of Guyana.”
The Ministry said that a number of short term measures were discussed…measures that will require both private and public cooperation.
These include the use of better technology for recovery and production, more effective tax breaks and duty free concessions for miners and improved method of building local machinery for miners.
Also discussed was the need for diversification of mineral extraction activities. A revolving fund for new technologies whereby both the public and private sector will contribute and various tax incentives are also being considered.
“The stakeholders indicated that the inefficiencies in the processing of permits for various levels of operations, often affect the cost of production. Thus, as prices continue to lower for this precious metal, production costs will have to be reduced at each stage of development for the mineral.
“The Ministry’s Guyana Geology and Mines Commission should consider the option of allowing persons who have applied for the Prospecting Permits Medium Scale to be converted to Mining Permits to work without having to wait for the full process of the permit to be completed.”
However, this will be subject to verification of the type of mining operations.
The miners, according to the statement, noted that short term reductions in operational cost could include better roads and infrastructure in the various mining districts.
Also raised is the impact of foreign currency usages and its availability.
The meeting agreed that a working group consisting of representatives of the Ministry and its agencies and representatives of the GGDMA and licensed dealers will continue to monitor the situation.
Gold is the biggest foreign currency earner for Guyana with a significant chunk of the country’s workforce rushing to the hinterland in recent years.
Hundreds of millions of dollars have been invested by locals and foreigners as the gold sector boomed in face of the high world prices.
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