By Leonard Gildarie
The gold sector is continuing its downward spiral, reflecting almost a 17 percent drop in declarations for the first six months of this year as compared to the same period of 2014.
According to figures provided yesterday by miners, as of June 25th, the industry has seen a measly 164,419 ounces being declared for the year.
For the first half of 2014, the declarations were reportedly just over 198,000 ounces.
Poor world prices, high operating costs and a rainy season are being blamed.
Yesterday, President of the Guyana Gold and Diamond Miners Association (GGDMA), Patrick Harding, admitted that quite a number of miners have halted operations. This coupled with low prices and the rainy season has not been helping the situation much.
Miners want a number of interventions immediately. These include a reduction of the fuel tax which is as much as 45 percent. Several roads in the hinterlands leading to the mining camps are also in a deplorable state. These include the Omai, Issano, Puruni and the Bartica/Sherima roads.
Over recent weeks, miners have been agitating for some kind of action from the new coalition Government.
On Friday, the new Government vowed to work closer with gold miners to ensure the industry continues to play its vital role to the country.
The commitment was made after Minister of Governance, Raphael Trotman, met with members of the GGDMA over the state of the industry.
According to the Ministry, the new administration is committed to working closely with all stakeholders
in the mining sector to ensure its continued contribution to the local economy is sustained.
The minister also promised a range of measures so as to ensure the continued growth of the sector.
Minister Trotman was at the time meeting with Executives of the GGDMA and the Guyana Geology and Mines Commission, a key regulatory agency for the sector.
“The meeting specifically focused on a range of issues raised by the GGDMA on how the sector can be improved in light of the prevailing world market prices and the association expressed its willingness of with the administration in addressing issues…,” the ministry said.
Some of the issues included security; compliance and enforcement of the Mining Act and Regulations; implementation of waivers for double cab pickups for miners; implementation of waivers for fuel for the mining sector and rehabilitation and use of hinterland roads.
According to the ministry, the meeting agreed on a number of actions which will be unfolding in the coming days with Minister Trotman assuring members of GGDMA that the government intends to take a collaborative approach towards addressing the challenges within the sector to ensure the sustainable growth and development of mining in Guyana.
This year’s performance would mirror the situation of last year- but it is getting worse.
According to the country’s 2014 first half report on its performance, the sector had
recorded a decline of 17.2 percent in gold declaration.
While the previous Government had revised downwards the gold declarations to 450,000 ounces or a 6.5 percent decline, the yearend figures were 387,508 ounces, way below the adjusted target.
The first half of 2014 also witnessed a 24.6 percent contraction in gold exports earnings to US$226.7 million, associated with a 10.1 percent decline in export volume to 182,411 ounces, coupled with a 16.1 percent contraction in average export prices to US$1,243 per ounce.
As a result, overall receipts from exports fell by 10.3 percent to US$534.2 million in the first half of 2014 compared to the corresponding period in 2013.
As of yesterday, world gold prices were just below US$1,180 per ounce. It went up to US$1,300 in January but nowhere near the US$1,900 had hit a few years ago when the industry saw significant growth.
Gold had been one of the biggest drivers of the economy before poor world prices caused the sector to fall behind rice and sugar in terms of foreign currency earned for the country.
The situation had left miners holding mortgages and owing suppliers for parts and heavy machinery.
While there have been moves to have miners explore the possibilities of used, less costly gold recovery systems, there have not been much success because of the initial capital costs.
The gold fields have been attracting a large number of workers who have migrated from logging and from the coastlands, but the situation is slowly contracting.
The situation would be further bad news for the new administration which is facing problems in both the rice and sugar sectors.
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