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Small, medium scale miners responsible for decline in gold declarations – Mid-Year Report
Kaieteur News – Despite the mining sector receiving billions in tax breaks and other incentives from the Government of Guyana, there has been a decrease in gold declarations for the first half of 2023.
The Ministry of Finance Mid-Year Report 2023 attributes the decline to low declarations made by small and medium scale miners. It was stated that at the end of June, gold declarations stood at 209,756 ounces, compared with 236,728 ounces during the same period last year, an 11.4% decrease.
Similarly, in Bank of Guyana’s Third Quarter Report for 2022, it was stated that gold subsector output declined due to lower declarations by small and medium scale miners.
The 2023 Mid-Year Report, stated that declarations from the lone large producer expanded by 6.1% year-on-year. However, it was underscored that this was outweighed by lower declarations from the small- and medium-scale producers. Declarations from the latter fell from 188,956 ounces in the first half of 2022 to 159,084 ounces at the end of June this year.
According to the report, improvements observed in early third quarter, alongside strengthened enforcement efforts by the regulatory authorities, are expected to result in a rebound in the second half.
It was stated too that the gold mining subsector is now projected to grow by 5.3% in 2023. In August 2022, the National Assembly approved Fiscal Enactment Amendment Bill No. 2 of 2022, which was enacted to bring tax relief to miner. The Bill was piloted by Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh and followed a commitment made by Vice President (VP) Bharrat Jagdeo to mining community some months earlier.
The measures included the reduction of final tax from a maximum of 3.5 percent to 2.5 percent which would result in an estimated $1.4Billion being returned to the mining industry, and the removal of the 10 percent Tributors’ Tax that would benefit thousands of workers in the industry with $300 million expected to be returned to those who were paying this tax.
Further, Minister Singh had also presented Value-Added Tax (No.3) Order 2022, removing Value Added Tax (VAT) on lubricating oil, a key input in not only the mining industry, but almost all the productive sectors. In total, all measures allow for the return of a total of $1.9 billion to the mining industry – the Finance Ministry had reported.
Amid growing concerns about Guyana gold declarations decreasing, Vice President Jagdeo during a news conference in July confirmed that the decrease in declarations is factual, but added that a probe has been launched into alleged gold smuggling.
For the past several months, Kaieteur News had reported on several Canadian gold mining companies boasting to their investors about Guyana’s rich mining industry. Among those companies is OMAI, a company which produced over 3.7 million ounces of gold between 1993 and 2005 and is now making a comeback in Guyana’s mining industry with its gold properties: the shear-hosted Wenot Deposit and the adjacent intrusive-hosted Gilt Creek Deposit. At the end of September, Omai is expected to update its 3.7 million ounces of gold estimates (indicated and inferred), after its return in 2020.
Also, the Guyana Goldfields Inc, a China-led mining company, is among the large-scale mining companies working in Guyana. While foreign companies have been rushing to cash in on the “gold fever” in Guyana, the country has been suffering massive declines in its annual declarations since 2017 and Jagdeo is yet to honour his commitment to make all mining contracts public.
Kaieteur News had made several requests for the Government of Guyana to release the mining contracts, particularly large-scale mining contracts.
In 2019, when Guyana became a member of the Extractive Industries Transparency Initiative (EITI), the country agreed to adhere to several requirements. In this case, EITI requirement 2.4 (a) of the 2019 Standard states that Guyana should publicly disclose all mineral agreements entered into force prior to the reporting period, in this case, 2019. Although the requirements were known to the administration, it continued to make excuses to avoid the release of these contracts.
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