Decline in gold declaration cost Guyana US$100M in foreign exchange earnings

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Chairman[www.inewsguyana.com] – During a recent panel discussion, Chairman of the Guyana Gold Board, Gobind Ganga said that with the decline in gold declaration Guyana has lost about US$100M in foreign exchange and approximately $1.5B less in royalty and taxes.

This, he said, is for the period January to May month end 2014, with 20 percent less gold declared for the same period last year. According to Ganga, the Guyana Gold Board was expecting between, 40,000 to 50,000 ounces of gold thus far for the year, but this has not materialised.

Meanwhile also on the discussion to address the issue of the crisis in the gold industry were, President of the Guyana Gold and Diamond Miners Association (GGDMA), Patrick Harding and Consultant, Edward Shields.

This current situation Ganga said is threatening to Guyana’s economy as gold has been helping the country’s fiscal policy to provide for economic sustainability.Gold1

“So with this decline it’s going to have an adverse effect, not with respect to the exchange rate per say in the immediate future, but later down the road it will have the effect.”

Ganga said, in his opinion and with findings it is easy to conclude that the main causes for the decline are the continuous decline in the price for gold, some amount of hoarding and the possibility of illegal export.

Supporting his claims of possible hoarding of the mineral, Ganga said, “If you are looking at the export earnings from this sector you would find that the foreign exchange is not there, if you would have mined gold and sold gold, you would have expected to foreign exchange to come back in, that is not there.”

He added that miners are producing more, declaring less, assuming that the declaration is not being sold, which makes it obvious that the there is no foreign exchange earnings.

“There is a strong indication that indeed there is some level of hoarding.”

Ganga went on to explain that within the Gold Board Act miners have 28 days to make their declaration and if this isn’t done then the gold is illegal.

On the same issue, Shields said he would rather use the words ‘holding on’ as opposed to hoarding.

Shields said he is of the belief that the gold crisis has been brought on primarily by the low price of gold, and it caught everyone off guard. “We have to accept there is a crisis, and we have to look to see how best one can survive this. It will not go away until such time the price of gold increases and until we start to get good return. It is high risk business and this is because if you’re successful you get good return, at the present moment you are not getting good return.”

[Extracted and Modified from GINA]

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