Tons of gold produced in Guyana are not being declared and sold to the official state system but are rather being smuggled across the river border with Suriname, where sellers make millions in cash because royalties or state taxes are cheaper than in the country of origin.
The World Wildlife Fund (WWF) has just published a study confirming what everyone in Guyana’s booming gold sector, the leading foreign exchange earning industry, knows that small boats fetching passengers and goods on the river also transport large quantities to the Dutch-speaking Caribbean neighboring country every single day.
Royalties paid into the Surinamese state system amount to only half of the five percent per troy ounce miners earn in Guyana, allowing a much greater net profit for miners, middlemen or anyone involved in the trade who is willing to skim across the Corentyne River and sell the precious metal in Suriname.
The study was presented at a recent “Guianas” gold conference involving Guyana, Suriname and French Guiana where industry players shared experiences, data and mining practices among other things.
The WWF said that “everybody recognizes that one of the problems we find happening is that we have this large difference in royalty and taxes between the three countries, you find that there is a lot of gold smuggling. There’s a lot of gold smuggling between Guyana and Suriname and French Guiana and Suriname because of the price of gold and the tax,” said WWF expert Rickford Vieira.
Runaway prices for gold in recent years have resulted in billions in investment in the sector, with revenues easily surpassing sugar and timber combined; but could also take in rice if smuggling is minimized. Gold earned nearly $400M in revenues last year.
At least a dozen Canadian and American companies are exploring huge miners in northern and western Guyana. One owned by Guyana Goldfields of Canada and conservatively billed to contain at least seven million ounces, could start actual production in another 18 months, making Guyana one of the largest producers in the Americas.
The study that was published in the weekend Stabroek News comes weeks after the umbrella Miners Association had also pointed out the fact that it is Suriname rather than Brazil where much of the undeclared gold goes as most had thought that the large Brazilian contingent in the country does unofficially smuggle gold back to Brazil.
“We did a market study and it was clearly evident that smuggling was occurring. We looked at where the gold was coming from, who are the buyers, where it goes to and things like that. People don’t ask you where you get the gold from or whatever. They are just paying you in Euros or US Dollars,” Vieira said.
Investment is skyrocketing in the industry to such an extent that an excavator operator could earn up to $5,000 per month in salary in addition to other incentives.