SITUATION ANALYSIS OF THE SMALL-SCALE GOLD ... - WWF

Chapter VI
THE GOLD TRADE
In this chapter we follow the gold marketing chain, from the miner to its possible
final destinations: a jeweler, a foreign gold refinery, or an unclear foreign
recipient. After a discussion of the CBvS, licensed gold buyers, and the relations
between these two stakeholders, we discuss jewelry and export trade. We
conclude with comments on illicit trade, which continues to plague the sector and
reduce state revenues.
6.1 The CBvS
The Central Bank began buying gold in 1994. One of the reasons for buying gold was to
make the sector more transparent. Until the Central Bank started buying gold, it was very
difficult to even estimate gold production. The first two to three years were difficult. The
Central Bank had problems with the amount of impurities in the unrefined gold that was
bought. In 1996 gold purchasing agents were licensed to buy gold. Most of these
companies contracted expertise from abroad and between 1997 and 2004 an average of
seven tons of gold was bought per year. Of course, these figures are not an accurate
reflection of the amount of gold actually produced in Suriname. It is certain that gold is
smuggled from Guyana to Suriname in order to avoid higher government royalties and
levies (7% versus 1%). It is likely that illegal miners in French Guiana also smuggle gold
into Suriname. Still, the gold buying figures are important because they give the
government figures to work with. By combining information from Guyana, Suriname and
French Guiana, it will be possible to generate much more accurate estimates of gold
production in the Guianas and in the various countries. This is one of the objectives of the
WWF program.
The CBvS is responsible for the final collection of royalties from gold miners, and for the
administration of the weight, quality, and value of gold produced. Since September 2002,
this institution itself no longer buys gold. Instead it relies on legal dealers to purchase
gold from miners. These dealers sell the gold to licensed exporters, who register it at the
Central Bank before exporting. Since the introduction of this system, the volume of gold
passing through the Central Bank has increased (Table VI.1). It is impossible to say if the
change in purchasing policy caused this increase. Nevertheless, the trend is positive
because it has resulted in increased state royalties, both in absolute terms and as a
percentage of the Gross Domestic Product.
It is difficult to estimate what share of local production eventually ends up at the CBvS.
Some sources believe that the CBvS only buys about 25% of gold produced, but others
believe the share is much higher. Almost none of the gold that is valued at the CBvS
stays in Suriname. The CBvS keeps a small volume of gold behind as samples to crosscheck
the quality and weight of gold production reported by the exporter. In addition, the
Bank reserves a small amount for local jewelry producers, based on their self-reported
needs.
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