By Bibi Khatoon
The Guyana Gold and Diamond Miners Association (GGDMA) will be holding the new People’s Progressive Party Government to its elections promises which include the removal of Value Added Tax (VAT) on mining machinery.
“I think a good start will be for them to deliver on those promises to us,” President of the GGDMA Andron Alphonso said in an interview with the News Room on Thursday.
He reminded of the Government’s promise to reverse the 14% Value Added Tax (VAT) on machinery and equipment and revert to the 2% royalty noting that this commitment is very important.
“The cost for acquiring a machine has gone up quite a bit over the last years…we definitely look forward to the removal of vat from the equipment, that will go a long way to help the sector,” Alphonso said.
He explained that miners cannot claim back for the VAT as is done in some sectors.
“That’s 14 percent on the cost of the machine that we can save that could go back towards prospecting, can go back towards buying spears for than machinery and so on,” the GGDMA President added.
Alphonso also spoke about the upgrade of access roads to mining areas and noted that some areas also need new access roads as miners trek deeper into the interior for gold and diamond mining.
“A lot of the [land] that we currently operate on…those areas have been mined over and over and over, over the last 30-50 years so there are many other areas that have good potential to mine but it is very arduous to get in there and very expensive so a miner has to put his own road to get into there,” Alphonso explained.
Gold price is currently at an all-time high of over US$2000.
On August 06, the price was at US$2031 per ounce and according to CNN Business there is good reason to believe that the price will keep climbing.
Alphonso said gold is known to shine when there is a crisis. He noted that the increase in gold price is coming at a good time when the country is dealing with a pandemic and need other ways to increase disposable income.
“It came at a time when the Coronavirus is affecting the whole world and obviously affecting our country in a really bad way, and we need to keep people employed, keep disposable income generating from the country, so people have the ability to spend and spending power to be spread throughout the different sectors entire country,” the GGDMA President said as he pointed out that the money coming from the sector will benefit other sectors.
The mining sector is one of the largest in Guyana, accounting for 14% of the country’s GDP.
In 2011 price for gold also hit a record high of US$1900 per ounce. Over the past couple of years, the price did not increase above US$1300.
Gold declaration for 2019 stood at 634,905 ounces. The declaration was 18,682 ounces above what was declared in 2018. The revenue earned by the Guyana Gold Board also increased for 2019, of over US 111 million.
However, despite its improved performance, the COVID-19 pandemic is also having a negative impact on the mining sector and some mining areas in Region Seven and Nine were closed off to mining due to the disease.
Alphonso urged miners to take precautions to protect themselves and others.
The Minister of Natural Resources was appointed on Wednesday afternoon in the person of former Parliamentarian Vickram Bharrat.
Alphonso said the GGDMA is looking forward to working with the new Minister and Government for the benefit of all workers.
The PPP in its elections manifesto promised to work with the miners and their organisations to remove obstacles to their development; establish a fairer, more transparent system for allocating mining concessions with more equitable access for small miners, extend and upgrade roads in mining communities, protect the rights and improve conditions of service for workers in large mining companies and provide apprenticeship and education opportunities for miners.
Additionally, the party also promised to accelerate the implementation of projects in the bauxite and non-traditional mineral sectors.