Guyana gold exports decline by US$38 Million in six months

Oct 02, 2023 News

Kaieteur News– Gold export receipts in Guyana have seen a significant dip, totaling US$396.7 million, marking an 8.7 percent decrease of US$38 million when compared to the figures recorded at the end of June 2022 stood at US$434.6 million.

The primary driver of this decline has been a reduction in the volume of gold exported, although prices have seen an improvement during this period. These findings were disclosed in the Bank of Guyana’s Half-Year Report.

The volume of gold exported witnessed an 11.1 percent decrease, equivalent to 27,020 ounces, resulting in a total of 215,979 ounces. This drop in volume was primarily due to lower declarations by miners.

The report highlights that the average export price per ounce of gold increased by 2.7 percent or US$47.96, reaching US$1,836.59 per ounce, compared to US$1,788.63 per ounce a year ago.

Gold

Decreased declarations made by small and medium-scale miners was also highlighted in the Ministry of Finance Mid-Year Report 2023 and the report stated that this was contributing to the decline in gold exports for the first half of 2023. By the end of June, gold declarations stood at 209,756 ounces, marking an 11.4 percent decrease from the same period the previous year when it reached 236,728 ounces.

The Mid-Year Report for 2023 also points out that declaration from the largest gold producers increased by 6.1 percent year-on-year. However, this growth was offset by lower declarations from small and medium-scale producers, dropping from 188,956 ounces in the first half of 2022 to 159,084 ounces at the end of June in 2023.

Looking ahead, the report suggests that improvements observed in the early third quarter, along with strengthened enforcement efforts by regulatory authorities, are expected to lead to a rebound in the second half of the year.

Furthermore, the gold mining sub-sector is now projected to grow by 5.3 percent in 2023. This growth can be attributed to legislative changes, including the Fiscal Enactment Amendment Bill No. 2 of 2022, approved by the National Assembly in August 2022. These measures have provided tax relief to miners, such as the reduction of the final tax rate from a maximum of 3.5 percent to 2.5 percent, which is estimated to return approximately $1.4 billion to the mining industry. Additionally, the removal of the 10 percent Tributors’ Tax is expected to benefit thousands of industry workers, with around $300 million expected to be returned to those who were paying this tax.

In a bid to further support the mining industry, Value-Added Tax (VAT) was removed on lubricating oil, a crucial input not only for the mining sector but also for various productive industries. In total, these measures are anticipated to inject a total of $1.9 billion back into the mining industry, as reported by the Finance Ministry.

Amid concerns about declining gold declarations, Vice President Bharrat Jagdeo confirmed during a news conference in July that there has indeed been a decrease in declarations, and an investigation into alleged gold smuggling is underway.

In recent months, several Canadian gold mining companies have expressed interest in Guyana’s thriving mining industry. Notably, OMAI, a company responsible for producing over 3.7 million ounces of gold between 1993 and 2005, is making a comeback in Guyana’s mining sector with its gold properties, including the shear-hosted Wenot Deposit and the adjacent intrusive-hosted Gilt Creek Deposit. Omai was expected to provide an update on its 3.7 million ounces of gold estimates at the end of September.

Furthermore, the Guyana Goldfields Inc., a China-led mining company, is one of the large-scale mining companies actively operating in Guyana. Despite the influx of foreign companies eager to capitalize on Guyana’s mining opportunities, the country has witnessed a significant decline in annual declarations since 2017. Vice President Jagdeo’s commitment to making all mining contracts public remains unfulfilled.

Kaieteur News has repeatedly requested the Government of Guyana to release mining contracts, especially those involving large-scale mining operations. It’s important to note that when Guyana became a member of the Extractive Industries Transparency Initiative (EITI) in 2019, it committed to adhering to certain requirements, including the public disclosure of all mineral agreements entered into force before 2019. Despite these obligations, the administration has consistently delayed the release of these contracts, causing concern among stakeholders.