Payments by Mining Sector to Ministry of Finance

Payments by Mining Sector to Ministry of Finance

The following payments are done directly to MOF

a. Dividend payments by Mining

Dividends from state owned companies, which in the case of Suriname are Grassalco, are paid directly to the MOF. This payment can be settled with outstanding balances with the Government and as such it is occasionally considered a non-cash settlement.

Dividend is also paid by RGM based on the 5% interest of the Republic of Suriname in RGM.

Dividend in stock, when applicable, is considered a non-cash payment. It will be disclosed as such.

b. Royalties in cash

Royalty payments to the Government are either based on the Mineral Agreement between the Republic of Suriname and the large companies or on the Mining Decree 1986 for small and medium size companies. Royalties payments to the Government by small and medium size mining companies are based on their production quantities.

Royalty rates are fixed as follows:

Mining material Amount/ percentage of royalty
Gold/silver large scale mining based on Mineral Agreements:
RGM royalty fee to be paid in cash 6.5% when gold price is in excess USD 425 per troy ounce
RGM royalty fee to be paid in-kind 2.25% monthly refined production
NS royalty fee to be paid in cash 6% over the net smelter return
Small and medium scale mining companies based on Mining Decree
2.75% of production value of the small and medium scale mining companies (SB1989/40 and its amendment SB 2015/51)
Gold/silver small and medium scale mining companies
Diamond
No specific royalty rates known yet for large companies. For Small and medium scale mining companies no other royalty fee known yet other than the fee known for Gold.

Table 4.3 Royalty fee rates

Royalty fee RGM

Based on the Mineral Agreement (1994), between the Republic of Suriname, Grassalco and Golden Star, RGM pays monthly:

  • Royalty fee in cash: a royalty fee of 6.5% in excess of gold price of USD 425 per troy ounce. Payment is made on a quarterly basis.
  • Royalty fee in-kind (special royalty): 2% royalties in-kind of its refined production to Grassalco and the remaining 0.25% to SEMiF. Transfers are completed on a monthly basis.

Based on an arrangement, originating from early 2005, an 80/20% ratio has been applied for allocation of the royalties paid by RGM. Royalty paid in cash is being deposited in the account of Grassalco at CBoS, who credits the account of MOF for 80% and of Grassalco for 20% based on this arrangement. Up to 2007, the share of Grassalco was used to pay off its debts with 2 financial institutions.

There is no written arrangement available of this ratio and the purpose.

With reference to a letter of the director of Grassalco seeking for a validation of the 80/20% ratio after 2007 the Minister of MONR put in writing in May 2018 that the 80/20% ratio regards the validation of the royalty payments and is retrospectively effective per January 1, 2014.

Royalty fee in-kind paid by RGM is being deposited at Royal Canadian Mint on the pooling account of Grassalco for 2% and 0.25% in an account of SEMiF. Grassalco keeps records in its financial accounting of the deposits in-kind at Royal Canadian Mint. In cooperation with the Government Grassalco can order the Canadian mint house to sell gold at the expense of their pooling account.

2019-12-16T11:47:31-03:00Monday 16 December 2019|EITI Suriname Report 2016|