Illegal activities connected to gold smuggling must also be addressed

The content originally appeared on: INews Guyana
File photo: A local mining pit

See full statement from the Guyana Gold and Diamond Miners Association (GGDMA) :

The Guyana Gold and Diamond Miners Association (GGDMA) is of the firm belief that decisive action by the government of Guyana aimed at stamping out gold smuggling must start with the curbing of illegal activities that precede smuggling and create an atmosphere within the sector that is conducive for smuggling to thrive.

Illegal mining, illegal shops, and the unregulated trading of gold within the interior are the pillars upon which the illicit gold smuggling enterprises survive. The government’s regulatory agency, the Guyana Geology and Mines Commission (GGMC) and its lax enforcement in the sector has allowed illegalities to flourish. Over the years, turning a blind eye to repeat offenders and merely slapping them on the wrists has fostered a culture of unabashed lawlessness. Illegal operators openly disregard the orders of the GGMC and brazenly make violent threats against anyone trying to stand in their way; an illegal operation is shut down one day but by the very next day they return to contravening the orders of the GGMC as if nothing had ever happened.  Equipment is seized from repeat offenders and within days the said equipment is returned to them.  There is no real serious consequence for their actions.

More than 10 years ago, and almost every year since, the GGDMA has been calling on the GGMC to step up its enforcement against illegal activities in the gold sector. In the past, there were a number of gazetted areas in the interior where trade could take place, now it is common practice for persons to set up itinerant trading posts (aka, “landings”) at will.  This has resulted in a multitude of landings throughout the interior, too numerous to be properly regulated, where illegal gold buyers set up shop and buy directly from unethical miners who are willing to sell their production for higher prices, free of any paper trail, without paying any royalties or taxes.  These landings are also hubs for human trafficking, the sale of illegal drugs and weapons.  We have repeatedly called for the reduction of the vast number of these hubs and for the ones that remain to be properly regularized; to date no meaningful action has been taken.  If the avenues through which illegal miners and illegal buyers are connecting is significantly reduced, then there would undoubtedly be an increase in gold declarations.

The proportion of mining lands held by the private sector has continued to reduce year over year; many of these lands are considered abandoned due to lack of rental payments and eventually end up fully under government’s control in the “closed areas”. As of 2020, there was approximately in excess of 6,000,000 acres of mining lands in the closed area.  Since then, thousands more mining and prospecting permits, each with an average size of 1,000 acres, have gone abandoned further ballooning the number of lands to be sent to the closed area shortly or that have already been added to the closed area’s holdings.  While illegal mining taking place on lands held by the private sector is more often reported and in certain cases action is taken to stop the raiders, no one is fully aware of how much gold is being illegally mined on lands in the closed area.  A blind eye is turned by certain individuals appointed by the state to safeguard its interest in these areas to facilitate illegal mining for which they are no doubt handsomely rewarded.  How much gold is produced in these areas and go undeclared?  How many illegal operations in these areas are being funded by smugglers?  Right now, there is illegal mining taking place on closed area lands in mining districts, 3, 4 and 5, certain officers of the GGMC are well aware of these activities.  Many miners have made repeated appeals to the GGMC about illegal activities but very little gets done. Miners who report often find themselves targeted by the officers and have resorted to joining the “stay quiet gang.”

Overall gold production may be down for several factors, but reduced gold declaration is inextricably linked to the proliferation of illegal mining. To reiterate, illegal mining coupled with the establishment of illegal shops that facilitate the purchase and sale of gold without effective oversight are among the chief reasons the government fails to get its revenue. It is time the government also engages its financial agencies such as the FIU and SOCU to investigate these many shop owners and mining operators who, despite having massive operations, do not declare any significant amounts of gold. The owners of some of the operations are well known and flaunt their wealth despite, on paper, not declaring any gold.  And who is actually the real owner of these large active operations that do not declare any gold but yet regularly purchase large quantities of fuel, spares and other supplies to support their operations? Is the equipment even really owned by these operators or is the equipment in fact owned by the smuggling ring to which the gold is eventually sold?  Also, let’s not forget civil servants connected to the industry who are enjoying lifestyles beyond what their pay checks can support.  All of this must be investigated, we do believe that the aforementioned financial agencies have the relevant tools and procedures at their disposal to put all the pieces of this puzzle together and consequently take condign action against the masterminds who currently reside in the shadows.

The GGDMA calls on the government to demonstrate that it is serious about finally addressing the precursors to smuggling and other activities that currently taint Guyana’s gold and will make it undesirable internationally.  The GGDMA remains steadfast in our commitment to stamp out illegal mining and smuggling.  If the country of Guyana cannot provide confidence to legitimate international buyers as regards the transparency of the source of the mined gold in the very near future, the days of this industry, with strong historical and economic importance to the country, are numbered.

For the future survival of the mining industry, the GGDMA continues to stand with the government of Guyana to tackle these problems. This is not the first time the GGDMA has made this appeal, we remain ready to support practical solutions to this rising threat.