Steps being taken to assist miners amid fallen gold price

Stakeholders in the gold sector on Monday agreed to set up a working group to monitor the drop in gold price, which has unnerved miners in Guyana.
The Natural Resources and the Environment Minister Robert Persaud met with various stakeholders of the gold sector on issues pertaining to the drop in the global gold price which has been occurring since last Friday. The meeting, according to release from the ministry, was attended by participants from the Guyana Gold and Diamond Miners’ Association (GGDMA) and the licensed gold dealers, as well as the ministry’s Guyana Geology and Mines Commission (GGMC) and the Guyana Gold Board (GGB).

Chairing the session, Minister Persaud highlighted that the price of gold has now hit below the US$1,400 level, which is now the bear market era. The price of gold has now hit a new two-year low. However, it was noted that since the beginning of 2013, prices have been marginally declining. Some of the factors which have caused this continuous decline in the price of gold are: the effects of the Cyprus bailout in the European Union (EU) and the selling of reserve gold by the central bank of that country, as well the possibility of more gold reserves from other members of the EU being sold to cover the larger bailout of countries. The slowing down of the Chinese economy and the decision by the United States to move away from quantitative easing, as well as lower consumer confidence are some of the additional factors that are impacting on the downward trend of gold prices.
The various stakeholders at the meeting highlighted that the price of gold is sometimes very unpredictable and the quantity of gold declared in and exported by Guyana will not influence the global market, since Guyana is a ‘price taker’ in this situation. However, the global price of gold will affect the level of output, investment and earnings of Guyana.
As such, in order to ensure that the national impact of the price change is not significantly felt by Guyana, a few short-term measures were highlighted, which will require both private and public cooperation.
These include the use of better technology for recovery and production, more effective tax breaks and duty-free concessions for miners, improved method of building local machinery for miners; the need for diversification of mineral extraction activities; the use of a revolving fund for new technologies, whereby both the public and private sectors will contribute. The GGDMA recommended that various tax incentives be reconsidered for the mining sector and stakeholders indicated that the inefficiencies in the processing of permits for various levels of operations, often affect the cost of production. Thus, as prices continue to lower for this precious metal, production cost will have to be reduced at each stage of development for the mineral.
Additionally, it was noted that the GGMC should consider the option of allowing persons who have applied for the prospecting permits medium-scale, to be converted to mining permits to work without having to wait for the full process of the permit to be completed. However, this will be subject to verification of the type of mining operations.