Feb 10, 2016 News
As Government continues its reforms of the gold mining sector, one of the major issues it is dealing with is how to halt the leakages in relation to declarations.
Gold declarations, from projections, are targeted at an unprecedented 550,000 ounces this year. More than 150,000 ounces is expected to come from two foreign-owned companies – Guyana Goldfield Inc. and Troy Resources – which started operations last year.
The rest will come from the other smaller operators who are expected to contribute at least 430,000 ounces.
The issue of leakages and smuggling reared its head last year with Government insisting that it was losing out significant revenues from the seven percent in royalty and tax it loses every time an ounce of gold is not declared.
In his recent budget presentation, Finance Minister Winston Jordan echoed what senior Government officials have been saying – that at least 15,000 ounces of gold is being smuggled out weekly.
The smuggling reports had sparked a multi-agency probe that later saw the involvement of the Federal Bureau of Investigation in the US.
From indications, it appeared that much of that smuggled gold was making its way overland to Suriname and then onwards to the US, Europe and even Asia.
But it also seemed as if a significant amount is making its way to Brazil, one of the three countries that border Guyana.
Although there is little data released over the years, it is a known fact that hundreds of Brazilians live and work especially in the gold mining areas of Guyana. It is not known how many have been granted citizenship or work permits.
According to officials, Brazilians have been making declarations, with even Brazilian dealers licensed to do business. The declarations are significant, but still nothing compared to what is not being declared.
With Guyana’s gold mining areas located between Regions Seven and Eight, mines officers are stretched thin to patrol and monitor the numerous camps that dot the areas. This, coupled with corruption with mines officers and other officials, has been posing problems for authorities like the Guyana Geology and Mines Commission (GGMC), to determine how much is lost.
According to knowledgeable insiders, with the informal setting of the gold camps and water landings, Brazilians especially have been trading gold with third parties and others for fuel and ration.
“So there may not necessarily be smuggling, but this gold being exchanged for services and fuel and food and spares and things like that, is not showing up in the system. So you will have many cases of people (Brazilians) collecting cash from selling gold and with poor record keeping, it is difficult to estimate what is slipping through.”
Brazilians, too, may not be too interested in smuggling gold directly to Brazil. With exchange rates, it is better to sell the gold in Guyana than taking a chance and smuggling it overland, where robbers and police checkpoints may prove a deterrent.
It is what happens to the gold that is traded for fuel and other goods that worry authorities. Most of this gold, it is strongly believed, makes it way to persons in the smuggling business. With Suriname’s taxes lower than Guyana, persons have been making significant profits taking the chance of getting it there.
The David Granger-led administration has been attempting to put a clamp on it, with the US keeping a close eye on the traders and others.
A list of the persons believed to be involved has been handed to the Government with a special department established to address issues of compliance.
Over the weekend, Natural Resources Minister Raphael Trotman, said that the finishing touches on a Compliance and Inspectorate Division of the Ministry of Natural Resources are being applied, with the body to become operational shortly.
The division, he said, will monitor the work of Guyana Geology and Mines Commission (GGMC), Guyana Gold Board, Guyana Forestry Commission, and miners and loggers, to ensure strict compliance with the laws and regulations.
It will be headed by Minister within the Ministry of Natural Resources, Simona Broomes.
In recent weeks, the issue of non-declaration was again raised after it was disclosed that Chinese-owned logging company, BaiShanLin, was involved in gold mining, but has yet to declare an ounce despite getting hundreds of ounces each week from its operations in the Ekereku area, Region Seven.
The situation has raised questions about GGMC’s capacity.
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