Gold exports: inspection delays harm legal trade in Brazil

The work-to-rule action promoted by the Brazilian Federal Revenue inspectors has been causing long queues of export-bound gold at São Paulo’s Guarulhos International Airport for over two months, resulting in losses for numerous miners operating under the law. This assertion comes from Mauricio Gaioti, a gold trade expert and a Brazilian Association of Mineral Research Companies (ABPM) council member.

Gaioti states, “fiscalization is essential, but we need more efficient processes to prevent delays in exports because this causes an artificial drop in the metal’s price, driven by an increase in product supply in the domestic market.”

Gaioti argues that the losses are impacting the production chains of various states in the country and leading to widespread layoffs. “In Mato Grosso, I personally witnessed the price of gold being traded five times worse than anywhere else in the world.”

“There is a logic behind [inspections] because combating illegality is necessary. However, at the same time, there is a need to come up with standards to identify what the Revenue requires so that there wouldn’t be an impact precisely on those [producers] who advocate ‘pro-market,’ ‘pro-legality,’ and, unfortunately, that’s not what is happening,” he laments.

“The government needs to separate the wheat from the chaff to avoid unjustly harming those who operate within the legal framework and act in the market in a legalized manner,” advocates Gaioti, who, until last month, presided over Omex, a reference in Brazil for the export of minerals and precious metals.

Technical issues

“There is a need for supervision, but also technical issues: Guarulhos is the only airport that exports gold from Brazil, so there is a natural bottleneck, even without the Revenue’s action,” notes Gaioti.

According to the expert, a “significant rigidity” was created with the operation initiated by the Revenue several months ago (with no end date in sight).

“The problem with this is that it impacted the liquidity of the entire market, meaning it is also severely harming the legalized market. In Mato Grosso, I saw prices there that are unimaginable, prices that are five times worse than anywhere else in the world,” he reports.

Maurício Gaioti reveals that the slowdown in the export of Brazilian gold is causing mass layoffs: “There are well-established mining companies in the legalized gold market, responsible for generating hundreds of direct jobs and thousands of indirect jobs, being forced to lay off employees.”

Asked to provide a comment, the National Mining Agency (ANM) declined to provide an opinion. The Brazilian Mining Institute (Ibram) stated that it has no information or assessments on the matter.

Source: Sinforme online

Click here to read the original news text: https://cinformonline.com.br/exportacao-de-ouro-atrasos-na-fiscalizacao-prejudicam-comercio-legal-e-podem-provocar-demissoes-em-massa/

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