Home Mining Gold miners reject ‘idiotic proposal’ by Govt to accept below-market prices
In addition to removing a range of concessions afforded to the mining industry and increased taxation and regulation that will certainly kill the already struggling local mining industry, the Government is now mulling giving miners below-world-market prices for their declared gold.
The move has since seen the Guyana Gold and Diamond Miners Association (GGDMA) and the Guyana Women Miners Organisation (GWMO) coming together in swift condemnation and calling on the Government to immediately remove “from consideration the idiotic proposal to force local gold miners to accept three per cent less than the world market price for gold produced”.
The bodies in a joint communiqué issued publicly on Thursday said, “No miner, under any circumstance, will support this proposal…Our two associations are united in this position.”
The GGDMA and the GWMO in their joint missive sounded the alarm, saying they wish to “inform all miners that the Government of Guyana is seriously considering a scheme, which would force small- and medium-scale gold miners to sell their gold for three per cent less than the world market price to the Guyana Gold Board.
According to the stakeholders, at current market prices, miners will lose $8000 for every ounce of gold sold.
The Natural Resources Ministry has since responded, making it clear that “the discussion on asking gold miners to pay a percentage below the London Fix price for gold has been ongoing for many years”, but “no decisions have been taken on this as the matter is before the Cabinet”.
The GGDMA and the GWMO lamented that the move was in fact geared at ensuring that the Guyana Gold Board stayed afloat.
“We, the miners, see this as another move designed to cripple local small- and medium-scale miners in a continued move by the current Administration to miniaturise the local sector.”
It was observed too that under the proposed pricing arrangement foreign companies that mainly export their gold would have won, since they would be exempt.
“It is a fact that the Gold Board, due to mismanagement, lost over 10 billion of taxpayer dollars during the period of 2012 to 2014 and now the Government want miners to subsidise this failing institution,” the missive to stakeholders said.
According to the miners’ representatives, “buying gold from local miners at the fixed world market prices has been the norm for the Guyana Gold Board and gold dealers in Guyana for over 20 years.”
The two bodies have since suggested that if the Guyana Gold Board—which has been plagued by corruption allegations in recent years—cannot run its operations and be profitable, in contrast to the privately licensed dealers, it should cease operations immediately.
The GGDMA and the GWMO used the opportunity to recall that Government has already proposed to remove all assistance to the industry, including VAT relief, fuel relief, duty-free vehicle concessions and tax relief on spares and mining equipment.
They said, “This, along with potential hikes in rentals, more stringent regulations and additional taxation will certainly kill the already struggling local mining industry.”
It was deduced that this new burden will see miners now paying out almost 10 per cent or $25,700 for every ounce of the gold they produce to the Government of Guyana.
The proposal, according to the two mining representative bodies, has been tabled without any consultation with miners or the mining associations.
“The GGDMA and the GWMO are deeply concerned with these developments from an Administration, who, thus far, has made only empty promises and has made life harder for the small and medium-scale miners.”
It was pointed out too that despite all the rhetoric about consultations, “this proposal was secretly developed”.
The two entities have since adopted a position of suspicion regarding all previous consultations and asked the Government, “Can we now trust your word?”
The GGDMA and the GWMO in their statement has since demanded an immediate end to the proposal and “a commitment from the Government of Guyana that they are serious about meaningful consultations”.
The GGDMA and the GWMO said they would be meeting with miners across Guyana to inform them about the impending changes and to discuss how they would affect their livelihood, with an outreach programme planned for the coming week.
Reiterating their position, the GGDMA and the GWMO said: “We are fully opposed to this proposal, which is under active consideration at the Cabinet level and we urge the Government of Guyana not to take this foolish measure.”
The representative bodies added that the measure would not create jobs and would, in fact, kill employment and spending.
“It will plunge the already stagnant economy further down the spiral. Mining is the leading economic driver of the Guyanese economy and this proposal will kill the goose that lays the golden eggs.”
The mining representatives used the occasion to observe that no other Private Sector industry currently provides more employment than mining, adding that “crime is tied to unemployment, and in an already slow economic situation, killing off the mining sector will not solve the current problems Guyana faces, but it will magnify them”.
They lamented that the Government, through the Guyana Gold Board, is planning to squeeze blood out of the miners.
It was also recalled that the Ministry of the Presidency has indicated that it would be applying more stringent measures to the industry and Minister of State, Joseph Harmon is on record saying they will put measures in place to ensure the survival of the Guyana Gold Board.
According to the GGDMA and the GWMO, “we did not anticipate that miners would be robbed of an additional three per cent to maintain the Guyana Gold Board’s incompetence…We will not be burdened with the bill for the Guyana Gold Board.”