Mining Association concerned about hints of removal of concessions

Jun 22, 2024 News

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Kaieteur News – The Guyana Gold and Diamond Miners Association (GGDMA) on Friday raised concerns about statements made by Vice President (VP) Bharrat Jagdeo relative to the removal of mining incentives.

The Vice President told reporters at his last press conference that in a move to combat rampant gold smuggling, the government will be conducting a comprehensive legal overhaul of the system aimed at imposing stringent penalties on large-scale gold smugglers.

He had expressed disappointment that despite all the incentives government implemented for the mining industry, smuggling is still rampant.

“We have lowered the taxes so that they can have a better environment but still no compliance because the rewards of smuggling seem to be greater, the foregone tax revenue seems to be a big incentive,” Jagdeo said. He continued, “We have to take away that incentive now by putting a regime of penalties and sanctions if you get caught smuggling the large quantity of gold…I’m talking about these smugglers who have been smuggling at this magnitude,” Jagdeo said.

The Vice President had made the statement while speaking on the sanctions imposed by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed on Guyanese billionaire Nazar Mohamed and his son Azruddin Mohamed for allege corruption – including gold smuggling and evading taxes. The OFAC sanctions were announced on June 11.

However, in its statement, the Mining Association said, “The GGDMA notes with much consternation hints of the removal of certain incentives and concessions that the GGDMA has fought for on behalf of the industry. We urge the authorities not to give in to this knee jerk reaction and to “throw out the baby with the bathwater” as this would be unacceptable.”

The Association said too that its position has always been anti-smuggling and welcomes this disclosure and the Government of Guyana’s commitment to pursue a full investigation into the matter and prosecute those involved.

The body stated too that it has always urged members to sell only to licensed dealers or the Guyana Gold Board (GGB). It said that the gold mining industry has a long history in Guyana and has been a pillar for the economy long before oil was discovered, underscoring that miners have stood with Guyana and the industry has persevered through all the ups and downs of Guyana’s economic growth.

To this end, the GGDMA urged the government not to use the recent disclosure by the United States as a “broad brush” to paint all miners as smugglers.

“The majority of miners are not engaged in smuggling. They are in the business of mining and have worked hard for their place in society,” the body said.  Notably, the Mining Association said that there are smugglers in the midst of the industry, and vowed to continue to support the government to root them out.

Notwithstanding, the GGDMA said, “The GGDMA notes with much consternation hints of the removal of certain incentives and concessions that the GGDMA has fought for on behalf of the industry. We urge the authorities not to give in to this knee jerk reaction and to “throw out the baby with the bathwater” as this would be unacceptable.”

According to the OFAC, the Mohameds allegedly evaded tax on gold exports and defrauded the Guyanese government of tax revenues by under declaring their gold exports to Guyanese authorities.

“Between 2019 and 2023, Mohamed’s Enterprise omitted more than 10 thousand kilograms of gold from import and export declarations and avoided paying more than US$50 million in duty taxes to the Government of Guyana,” the US Treasury alleged.

Additionally, according to the GGDMA, there was a great fight to get concessions which have helped bolster the industry through the many tough times.

“It would be grossly irresponsible to hold the actions of a few against the majority of miners,” GGDMA said.

Moreover, the Association noted that due to the massive labour shortages at all levels in the sector, legitimate operators are also suffering from low production due to their inability to run as many operations. Consequently, it was stated that the total production of gold from the miners who are selling to legitimate channels has also been greatly diminished.

“Benefits to these compliant organizations should not be taken away,” GGDMA added.

To this end, the Association reiterated its call for the government to address frontally the issue of smuggling and to take the U.S. report as a launching pad to prosecute the bad actors in the industry.

GGDMA also encouraged all miners to sell their gold to the GGB or to Licensed Gold Dealers. Miners were also reminded that they should ensure that proper documentation and a periodic statement of their transactions are received from the Licensed Gold Dealer to be presented to the GGB. It was underscored that the verification is important since it will ensure that gold is properly accounted for and that taxes are being correctly paid to the Government.

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• concessions, Government, Guyana Gold and Diamond Miners Association (GGDMA), removal, smugglers

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