The Mining Sector

Guyana is rich in mineral resources. The major part of Guyana’s known mineral potential lies in the northern half of the country. Mineral resources include bauxite, laterite, manganese, kaolin, sand resources, gold, diamonds, radio active minerals, copper, molybdenum, tungsten, iron, nickel etc. There are prospects for oil and gas, particularly in the Takutu Basin, some 300 miles South West of Georgetown.

High Growth Sector

Gold production in 1999 totaled 469,089 ounces down from 472,867 ounces in 1998.

The Guyana Geology & Mines Commission (GGMC)

In Guyana, subsurface rights - Minerals and Petroleum - are vested in the state. The GGMC is responsible for managing the Mineral and Petroleum sectors within the law and the policies of the Government.

The interests of operators in the sector are represented by the Guyana Gold and Diamond Miners Association (GGDMA).

Mineral Policy and Fiscal Regime

Government, in developing its policy for the Exploration and Development of Mineral and Petroleum Resources in Guyana took into account past experiences and utilised additional assistance and advice as necessary. Two fundamental objectives form the core of these decisions:

• a sufficiently attractive rate of return to the investor;
• a reasonable split of the net benefits between the investor and the Government.

Government, in line with its overall preference for standard agreements with the minimum discretionary exercise, opted for a standard fiscal regime (subject to long-term review) with a minimum of discretionary features (see below).

Scale of Operations

There are three scales of operations:

• Small-scale properties (27 acre, typically 1500 ft x 800 ft) are established on the ground by cutting lines and mounting claim boards at corners.
• Medium - up to 1,200 acres.
• Large - 12,800 acres (approximately).

For medium and large-scale properties, the applicant having identified his area(s) of interest, draws the area(s) on the designated maps and submit these to GGMC. Areas are granted in order of the date of application and subject to availability, providing the applicant satisfies technical and financial capability. Continuity is subject to payment of all land rentals and adequate progress in exploration. Only Guyanese can hold small and medium scale properties. Large-scale properties may be held in entirety by foreigners, by Guyanese or in any joint venture partnership combinations.

Standard Fiscal Regime

• Prospecting/Mining on a Large Scale:
  • Gold and Precious Metals, Diamonds and Precious Stones.
  • Royalty: 5% of production or of gross revenues;
  • Income Tax: 35%
  • Depreciation: 20%
  • Duty and Consumption Tax Concessions: Zero rating of duties and consumption tax on all equipment, process materials and spares to be used during and in the course of surveys, prospecting and mining, by the licence holder and his contractors; except food and beverages.
  • Fuel attracts a 10% (CIF) consumption tax.
  • No free equity to State, but the State shall have the right to nominate a member of the Board;
  • Withholding tax set at 6.25% of dividends.
  • Stability clause - for each mine developed, all conditions maintained for the duration of 15 years from the commencement of commercial production or the life of the deposit whichever is shorter, then general rules for duties, income tax and withholding tax apply.
• Bauxite and other Minerals (except sand and stone)
  • Royalty: 1.5% of product or of gross revenues or of production costs leaving plant, whichever is greater.
  • All other conditions are the same as for gold.
• Medium and Small Scale
  • Royalty: 5% of gross revenue for gold; 3% of gross revenue for diamond
  • Income tax: 2% of gross revenue, in lieu of Income Tax. However, if the permit holder is a body corporate, corporation tax is payable at the rate of 35% of taxable income.
  • Duty and Consumption Tax Duty and consumption tax exemptions on a range of items.