– concerned State losing revenue to inaccurately categorised miners
The Extractive Industries Transparency Initiative (EITI) has recommended in its first report on Guyana’s extractive sector that a wholesale review be done to weed out wrongly categorized miners.
According to the organization in its recently released report, this is because thousands of acres of mining permits have been awarded to claimants on a scale that should be considered large scale. Large scale permits involve higher rental fees and more revenue to the state. But the report states that in some cases this is not happening.
“We note that several mining permits, covering plots in the same location as per GGMC list of permits, had been awarded on the same date to the same applicant following the award process of medium scale mining permits instead of following the award process for large-scale mining licenses.”
“The total combined acreage of several mining permits awarded during FY 2017 to a same applicant exceeded 1,200 acres which is the maximum surface for a medium scale mining permit. If these plots had been combined, they would have exceeded 1,200-acre threshold and would have been categorized as being “large scale tenures,” it also states.
Besides paying higher rental fees, EITI pointed out that large scale permit holders also have to go through more stringent license award procedures. These procedures include requiring further approvals from other Government Agencies. According to EITI, this oversight may cost the state a large sum of money per year.
“Additionally, the list of active mining permits shows that several plots were held by the same extractive entity and within the same location. The combined surfaces of these mining permits exceed 1,200-acre threshold in several instances.”
“Such mining permit holders may need to be categorized as large-scale extractive operators as defined by the current legislation whenever it is established that the relating plots run consecutively one after the other. The annual rental fees due by large scale operators is USD 3 per acre as opposed to USD 1 per acre for medium scale mining operators.”
The EITI therefore recommended a review and an update of the list of current active mining permits in order to ensure all are in compliance with the definition of the large scale mining license.
In a press release after the EITI report was completed, however, the Guyana Gold and Diamond Miners Association (GGDMA) had staunchly refuted the finding of the report. According to the association, only a small percentage of the mining lands have been mined.
“From reviewing the report, the author of the report apparently thought that the entire 1200 acres are mineralized and has gold and as such, by separating the permits the government and people of Guyana (are) being short-changed.”
“This is far from the case. The large-scale companies receive Investment Development Agreement (IDA) where duty free is granted for equipment, fuel, spares etc. which more than compensate for the extra fees. Medium scale permit holders are paying for most of the land and of which only 5 per cent is mined,” GGDMA had claimed.
As of December 31, 2018, total gold declarations from all sources amount to 613,073 ounces, which was 6.22 per cent lower than the figures from 2017.
Additionally, the foreign exchange value of exports processed on behalf of dealers and the Guyana Gold Board (GGB) came to US$443,961,666.
The Guyana Gold Board has meanwhile projected that for 2019, declarations and exportations will be at 651,000 ounces.