Miners look to expand operations with high gold prices

Small and medium-scale gold miners will meet in the coming week to discuss ways of expanding their operations as the price for gold continues to climb. This and other issues are on the agenda for Monday’s Annual General Meeting of the Guyana Gold and Diamond Miners Association (GGDMA). The association’s President, Patrick Harding, said that the meeting would be attended by the Minister of Natural Resources and Environment, Robert Persaud.

The GGDMA has congratulated all miners who helped to ensure that the Association surpassed its gold declaration target for last year. The declaration of 360,000 ounces of gold last year was a record for the GGDMA. In 2010, the gold declaration was 308,438 ounces. Of major concern to the Association is the amount of undeclared gold that is smuggled out of Guyana, particularly to neighbouring Suriname and Venezuela. Mining officials explain that royalties paid on gold in neighbouring Suriname amount to far less than in Guyana, and so miners prefer to sell to buyers in Suriname. This results in a much greater net profit for miners, middlemen or anyone involved in the trade. In Guyana, royalty on declarations equals five percent on production or gross revenues. Suriname takes one percent royalty and an additional 6.5 percent if the price goes beyond US$425 per ounce.

President Donald Ramotar has called for a much more coordinated, harmonized and integrated approach to natural resources management given the sector’s potential for growth. Minister Persaud has expressed hope that all hitches to advance the sector can be ironed out in a way that benefits and meets the needs of investors, operators and other stakeholders. Meanwhile, Guyana’s gold rush is proving to be a headache for local authorities as there are several reports of illegal mining by foreigners, especially Brazilians. This in turn attracts more robberies and gun related activities.

The price for gold has climbed to $323,955 per ounce. “The dramatic increase in the price of gold from US$250 per ounce a few years to over US$1,800 per ounce a few days ago, has resulted in a ‘mad’ rush by persons into the interior,” Home Affairs Minister Clement Rohee said at the start of September last year. “Most of those persons have good intentions but a few of them seem to be bent on depriving others of their hard earned assets.” He said that the result of this development is that persons of “dubious character have infiltrated the interior and have been engaging in robberies and murders, thus requiring the diversion of more attention by the police to the mining districts in the interior. The Interior Police Division last year recorded some 40 murders, with most of them occurring in mining communities.