Govt defends Mining Sector following APNU’s criticism

Hours after iNews published the APNU story; the Ministry issued a statement, noting that Guyana’s gold mining sector has a sound footing and continues to grow.

The Ministry noted however that the sector is vulnerable to international market conditions; therefore the government through the Ministry of Natural Resources and the Environment will continue to engage all stakeholders to cushion these impacts.

The APNU at its weekly press conference yesterday proposed a turnaround plan for the sector.

See below the press release in full from the Ministry of Natural Resources and Environment:

Guyana is building a world class sustainable and responsible mining sector

Guyana’s gold mining sector has a sound footing and continues to grow, however it is vulnerable to international market conditions, therefore the government through the Ministry of Natural Resources and the Environment will continue to engage all stakeholders to cushion these impacts.

The gold mining sector of our economy has been the catalyst for economic growth and has improved the economic well-being of citizens of Guyana. This has been achieved because of the consistently rising levels of gold declaration over the last decade. The importance of the gold mining sector to our economy cannot be over emphasized since gold has been the largest earner of foreign revenue for the last seven years. It is in this light that given the low gold prices on the international markets and the resulting impact on the mining operations and the mining sector, the Government of Guyana (GoG), through the Ministry of Natural Resources and the Environment (MNRE) and the Guyana Geology and Mines Commission (GGMC), engaged the Guyana Gold and Diamond Miners Association (GGDMA) and identified areas of concern and implemented measures aimed at ensuring that the sector remains viable. In this regard, specific interventions were made and are continuing, to support the sector and ensure its survival, continued growth and contribution to national development.

Significant progress has been made through constructive dialogue at the level of the Inter-Ministerial Task Force that was formed to undertake specific interventions aimed at supporting and streamlining the sector.

To date, the Government of Guyana and the Ministry of Natural Resources and the Environment have succeeded in completing the following interventions in support of the sector:

Duty Free Waivers on Spares and Equipment

The Ministry supported the request for the waiver of tariffs and duties on equipment and spares and this was granted by the Government and implemented by the Guyana Revenue Authority.

A list of nineteen (19) suppliers of mining equipment and spares was approved for tax waivers on the importation of said equipment. This will reduce the cost of spares and critical supplies for miners and is an addition to the items that are currently imported duty free, such as Pumps, Flexes, and Matting etc.

Fuel Licence

Given the request and appeals of the Guyana Gold and Diamond Miners’ Association regarding the high cost of fuel as a main input into the production process, a fuel importation Licence was granted to allow for the cheaper importation of fuel.

Mercury Free Mining Development Fund

The Government, Ministry and stakeholders of the sector, most importantly GGDMA, are aware of the need to increase gold recoveries and eliminate the use of mercury in the gold extraction process. The adoption and use of mercury free and improved recovery technologies is even more critical now given the low gold prices experienced by the sector. In this regard, the Government and GGDMA agreed and established a Mercury Free Mining Development Fund of GYD1B aimed at promoting the use of mercury free and improved recovery technologies.

Collaborative work between GGDMA and GGMC are ongoing to identify and test the various technology available so that these processes can be adopted by mining operations and thus ensure greater recoveries, reduced costs, increased revenues and ultimately a sustainable gold mining sector.

Hinterland Infrastructure Development and Maintenance

The Ministry of Natural Resources and the Environment and the Guyana Geology and Mines Commission continues to undertake the rehabilitation of hinterland roads and infrastructure to ensure that mining lands are easily accessible.

Discussions are continuously ongoing as it regards the maintenance of hinterland infrastructure and ensuring that value for money expended is achieved. In pursuit of this, a combination of approaches were undertaken. GGMC is currently reviewing feasible road designs and construction methods that can be adopted bearing the constraint of financial resources in mind. Simultaneously, efforts are being made to implement Road Users’ Agreement for specific heavily traversed roads that are prone to destruction, since it is recognized that heavy usage of the road in wet conditions lead to damage and require continuous rehabilitation at significant cost.

More importantly, the expenditure of funds on hinterland infrastructure is as a result of a collaborative effort with the relevant Ministries and the key stakeholder, GGDMA. In 2014, GGDMA provided a list of hinterland infrastructure for rehabilitation that it deemed critical. These roads/bridges were rehabilitated and the same approach will be undertaken in 2015 whereby GGDMA will provide its considerable insight on areas for special focus.

Duty Free Concessions

All-Terrain Vehicles (ATV), Excavators, Bulldozers and other machinery – Small and Medium Scale operations continue to benefit from duty free access to All Terrain Vehicles (ATV), Excavators, Bulldozers and other machinery used in the mining industry. These waivers on duty are available to new entrants to the sector and for current miners based on production levels.

Double-Cab Pickups – Government recently approved the granting of waivers for double-cab pickups to miners based on their production levels which was used to determine the various categories and associated waivers that would apply. Three categories were established, namely Category A (Declarants with 5,000 ounces and above annually), Category B (Declarants between 2,000 – 4,999 ounces annually) and Category C (Declarants between 500 – 1,999 ounces annually).

Miners also have a concession on fuel where it only attracts 10% CIF Excise Tax.

Access to Foreign Currency (USD)

The interventions of the Inter-Ministerial Task Force was successful in ensuring that miners have access to 10% of their gold sales available in US Dollars to assist in retooling, capital acquisition and diversification of investments.

Availability of New Areas for Mining

GGMC held an auction on the 11th of August, 2014 where a total of 939 properties were place for location. In addition, a Lottery was held in Georgetown and at three interior locations on the 18th of August 2014 with a total of 903 blocks were won during the exercise. The Lottery and Auction was done to ensure that mining properties are continuously available to miners to sustain current operations and production levels.

Work Permits

The Ministry and GGMC worked in tandem with the Ministry of Home Affairs (MoHA) and GGDMA to streamline the process for applications for work permits. Measures were instituted to ensure that the process is expeditious and as transparent as possible so as to ensure that mining operations are not constrained by workers not having the requisite documentation. Given the interventions of the Ministry, the application and granting process for Work Permits was reviewed and the duration for completion was reduced.

In addition, as was recommended by the GGDMA, the effective dates of the Work Permits were revised to be the date when it was granted and not the date of application.

Hinterland Security

The Ministry facilitated meetings between the Minister of Home Affairs, the Guyana Police Force (GPF) and GGDMA. This has led to the understanding of the security concerns and constraints facing the sector and established a working relationship between GGDMA and the Guyana Police Force. In addition, a comprehensive security plan was developed and presented to the GGDMA outlining the measures that would be undertaken to provide adequate security for the sector.

The Government and the Ministry remains committed to ensuring that a safe and secure environment exists for the promoting and development of the sector and will continue to provide support to other state agencies and Ministries to achieve this objective.

Firearm Licences -The Ministry was instrumental in arranging meetings with the GPF to expedite the firearm applications for bona fide miners.

Human Resources

The Mining School continues to train persons in entry level skills for the mining sector and this increases the pool of human resources available for miners.

Irrespective of the above mentioned areas for which successful discussions and interventions were made, the Government, the Ministry and key stakeholders are currently reviewing the following additional areas of support for the sector:

Reduction in Royalty and Property Rental Rates

1. The Guyana Gold and Diamond Miners Association proposed to the Ministry and the Commission, the reduction of rental paid on mining properties and lowering royalty payments from the current 5%, given the low gold prices that affected the sector.

Waiver of Tariffs on Fuel Importation

In addition to the fuel importation Licence that was granted to allow for the cheaper importation of fuel, Government is currently reviewing the possibility of providing tariff waiver on imported fuel.

Further, it must be recalled that Minister Persaud had said earlier that the sustainability of the mining sector   is critical to the long term prosperity of our nation. This sector should not be drawn into partisan politics, but remain in the domain of unified national development.

Meanwhile, a thriving and vibrant mining sector is the goal of the Government and all miners/stakeholders. In this regard, the Government of Guyana remains steadfast and reiterates the commitment of the Ministry and GGMC to work in partnership with GGDMA and all stakeholders in dealing with the challenges of the industry. The Government and its Ministries/Agencies will continue to work to ensure that the sector achieves its full potential, while contributing significantly to the growth and development of Guyana. The Ministry and GGMC will continue to work with the GGDMA and all other stakeholders for benefits of the sector.