Miners’ body squares off with Govt. over low declaration

Jun 18, 2014 News

---

– insists reduced production is the reason

The country’s largest miners’ association has insisted that falling gold declaration is to be blamed on reduced production.
In a statement yesterday, the Guyana Gold and Diamond Miners Association (GGDMA) also accused Government and the Guyana Gold Board (GGB) of attempting to criminalize the entire mining industry with a number of statements and threats issued recently.
The statement came days after reports that poor declaration for this year was because of a huge smuggling racket involving a dealer and Suriname.
However, yesterday the association said that the Government and its various arms seem to be more intent on vilifying the industry rather than producing helpful solutions to help increase production.
“The Ministry of Natural Resources and the Environment has resuscitated an archaic piece of legislation and is using it to threaten legitimate miners and other stakeholders with jail times of up to five years for failing to sell gold within a specified period of time. The ministry has also accused miners of hoarding gold, a charge the Association strongly denies.”
GGDMA said that it “believes” that the real problem lies in reduced production for the first half of 2014.
“As a result, the GGDMA has commissioned a study to investigate the reasons for lower production figures for the first half of 2014 with an intention to demonstrate that it is a reduction in production rather than deliberate low declarations.”
The results of this study, the association says, will be made publicly available once completed and should demonstrate beyond any doubt the real reason for the shortfall in the Government’s budgeted gold expectation.
“Production and declaration must go hand in hand and miners cannot declare gold they have not won.”
The association said despite an earlier position that the gold declaration was below production, miners have now seen documentation that proves contrary and hence the decision to conduct a more in-depth study of production figures.
“The GGDMA says that while it empathizes with the government’s position of reduced revenue earnings, which are now below budgetary expectations, the miners cannot be made the “fall guys” for this situation. The Association has previously stressed to its membership the importance of declaration on the national economy and has been actively advocating for increased declarations.”
GGDMA said that meetings have been ongoing with the Ministry and it is shocking that these have resulted in the application of threats and coercion.
“This does not sit well with the industry. The association maintains its position that gold remains the most important economic earner for Guyana and miners remain the country’s best hope for economic growth. The GGDMA, however, wishes to state, clearly, that any attempt to criminalize and bully legitimate mining operations cannot and will not be accepted, and calls on the government to offer solutions and incentives for increased production rather than threats.”
GGDMA said that in light of the “controversy”, it is convening a special emergency meeting for all miners next week Thursday to discuss the implications of the resuscitated measures and to determine a position on how the industry will move forward “in this climate of criminalization”.
Meanwhile, the Guyana Gold Board in a response yesterday, said it has noted the accusations made by the association surrounding the current ongoing outreach activities.
“The Guyana Gold Board wishes to point out that the current outreach follows representation by the GGDMA and other stakeholders for the need to ensure that the GGB Act and other related legal provisions are complied with by those involve in the gold trading and the wider mining sectors.”
GGB said that it must be recalled that on June 4 at a meeting with stakeholders of the gold mining sector, the GGDMA emphasized that there must be more monitoring and enforcement of the mining regulations by both the Guyana Geology and Mines Commission (GGMC) and GGB. “In addition, the executive members of the GGDMA, including the President of the Association stated that the GGB must undertake more monitoring of all stakeholders of the gold mining sector, which is in accordance with the Guyana Gold Board Act of 1981.”
Gold Board said it must be noted that the GGDMA itself had emphatically made the call for the mining industry to improve their level of declarations.
“The activities being carried out by the GGB includes the verification of all licenced gold dealers for 2014 and the details of the records by dealers corresponding to the GGB records. Moreover, all licenced dealers are subject to conditions which states that (a) for each dealer, the Board shall undertake periodic reconciliation between purchases made, holdings, and sales to the Board and (b) every dealer shall permit a duly authorized officer to enter the premises of the authorized dealer at reasonable times to inspect records.”
GGB said that the activities are being done in accordance of the GGB Act which has never been questioned as to its relevance in governing the modern gold mining sector.
“The GGB has been mandated by the Board of Directors and the Ministry of Natural Resources and the Environment to ensure full stakeholders collaboration in fulfilling its obligations for the betterment of the gold trading sector and the wider mining community. The GGB reiterates the recognition of miners, dealers and other stakeholder of the gold sector to the national economy and denounces any effort to impute motives that these ongoing examinations are a matter of criminalization.”
Last week, miners called for a full blown investigation into reports that a prominent North Georgetown gold dealer was believed to have been involved in smuggling large quantities of the shiny metal to Suriname. With that country charging a mere one per cent compared to seven per cent in Guyana, the lure of better prices there has been a risk worth taking.
Insiders estimated that almost 150,000 ounces were smuggled between January and May, leaving the country with over $2.5B in revenue losses.
Just over a week ago, the Government expressed alarm over poor declaration for the year, which it says were far below projections.
For the first half, ending June 30, Guyana had been projecting a target of 242,281 ounces, which leaves the sector struggling to play catch up. As of May month-end, only 165,000 ounces would have been declared.
The poor declaration if it continues will have implications for projected revenue earnings for this country at the end of 2014. Gold has become the largest foreign currency earner and a significant revenue earner for Guyana, in recent years.
Government initially suspected hoarding as a reason for poor declaration.
This year, Guyana has set a target of 484,562 ounces. Last year’s gold declaration was the largest ever at 481,087 ounces.

---

---