Close the Guyana Gold Board!

Apr 18, 2018 Features / Columnists, Peeping Tom

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The government has not yet seen the wisdom of fully liberalizing the sale of gold. It continues to involve itself in the purchase of gold without any justifiable rationale. The government should rethink its position.
It now has an additional reason for dissolving the Guyana Gold Board. It is said that of 130 employees of the GGMC tested for mercury poisoning, 60 of them had above normal levels of mercury in their blood. That is a frightening result, but not as much as the possible explanation for the abnormal blood readings. It is said that there could be other reasons for the elevated blood mercury levels, including the consumption of fish.
This is a very fishy explanation, because mercury is not likely to be excessively present in the food chain on coastal areas, where one supposes the majority of the staff of the GGMC come from. Most of the fish sold on the coast does not originate in waters that are likely to contain mercury. These workers need help, not the sort of downplaying of the results of their tests.
There is a scientific way to determine whether the high incidence of mercury in staff at the GGMC is due to the operations of the nearby Guyana Gold Board or is due to mercury being present in fish they consume. Take a sample of persons who use a lot of fish, but who do not live or work near to either the GGMC or the Guyana Gold Board. This sample is what is known in science as a control group. The residents who live near the offices of the Guyana Gold Board should also be tested.
If it is found that the levels of mercury in the bodies of GGMC workers are primarily due to the operations of that agency and the Guyana Gold Board, then the Guyana government had better prepare itself for a multibillion-dollar lawsuit. Mercury poisoning is serious and people are not going to take lightly this explanation about it possibly emanating from the consumption of fish.
The government has never needed a health concern to decide on the fate of the Guyana Gold Board. There is no economic rationale for keeping the Guyana Gold Board. Governments should not be in the business of buying and selling gold. Leave the risks associated with such activities to the market.
As stated before in these pages, the Guyana Gold Board should be prohibited from purchasing any more gold. It must confine itself to regulating the gold mining sector. The laws of Guyana allow for the Guyana Gold Board to be responsible for the purchase of all gold produced in Guyana and for the sale of this gold, locally and overseas.
The Guyana Gold Board is the trading and commercial arm for gold in Guyana. Those functions need to be privatized
The Guyana Gold Board will become a financial and administrative drag on the Ministry of Natural Resources. It should be dumped and replaced with a regulatory authority. There is no longer any need for a Guyana Gold Board.
Gold production is increasing. The Gold Board will therefore be exposed to higher speculative risks, since the bulk of its gold sales are international. The government should not be assuming the risk associated with the movement of international gold prices. The prices are stable now and high. But what happens if they become unstable.
The Gold Board was established at a time when there was a foreign exchange crisis in the economy and there was need for greater controls. That reason no longer exists, thus there is no need for having a Gold Board. The foreign currency market has been liberalized and, except for a few occasions, has led to an extended run of exchange rate stability, never enjoyed during the era of state-controlled foreign currency markets.
Private operators are already licensed to purchase gold on behalf of the government. So why not liberalize the entire market. One explanation may be the fear of losses in royalties. However, Guyana should have long moved away from royalties, which in itself has been a contributor to gold smuggling, as is well known. Miners have long complained that the high royalties which have to be paid represent a form of tax on the industry. Guyana should have long graduated to a broader natural resource tax, which would be more equitable than the present royalty system, since it would tax all natural resources, including agriculture.
The gold mining sector in Guyana needs stronger regulations. The environmental destruction caused by gold mining is reaching dangerous levels. And there is no strong regulatory body to enforce the mining regulations. This should become the remit of the Guyana Gold Board. It should become an agency concerned exclusively with regulating the gold industry.
The government should issue a White Paper on the Guyana Gold Board. This would provide it with a basis for determining the future of the Guyana Gold Board.

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