Guyana miners seek relief amid drop in gold prices

Friday, July 05, 2013

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GEORGETOWN, Guyana - GUYANA'S mining industry is asking the government of the Caribbean country to take emergency measures amid falling gold prices.

Miners Association spokesman Colin Sparman said Saturday the group is seeking government subsidies and a cut in import taxes on items such as machinery and fuel. He said members were scheduled to meet with state mining officials yesterday.

Gold surpassed sugar as Guyana's top export last year, generating more than $1 billion in annual revenue.

But the price of gold has been dropping, falling below US$1,200 an ounce for the first time this week in almost two years.

Local miners sold 415,000 ounces of gold to the state board last year.

Guyana is among the world's top 30 gold producers, with the metal being one of the country's top exports.

The Guyanese government signed a US$1-billion agreement with Canadian company Guyana Goldfields Inc (GGI) in 2011 for what it says is the largest private mining investment in the South America country.

The project in the Aurora region is the first large-scale gold mining licence that Guyana has issued since 1991. The government said it is expected to create more than 1,900 temporary and permanent jobs and Guyana Goldfields said it is expected to generate US$1.6 billion in government revenues at a time of record gold prices.

GGI will pay a mining royalty of five per cent when gold sells for US$1,000 an ounce and eight per cent when the price is higher. It will also pay a corporate income tax of 30 per cent, reported the Associated Press.

The agreement is for 20 years, with provisions for extension.

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