Bid rounds Mining Allocation of licensing and contracts and contract disclosure Mining

Bid rounds Mining Allocation of licensing and contracts and contract disclosure Mining

Mining Companies

According to an overview of GMD, dated October 24, 2019, regarding the mining rights / licenses for the category gold, diamond and other ores there have been 58 cases of movements in 2017. A summary is presented in the table below:

Table 5.9 Movements of licenses in 2017

Note: At MONR / GMD there is no or hardly, a fully-fledged visual mining license register available for, among other things, applications and issued licenses for mining rights. An overview was derived from the license database as was the case in 2016. However, since no investigation was performed within the scope of this engagement regarding the reliability of the database and the IT-environment, nor about the methodology of the data extracted from the database we could not rely on or express any opinion about the completeness and accuracy of the data base and the overview derived from it.

Application, approval and disapproval

In 2017, the same organizational set-up and gaps exist as described in 2016. We therefore, refer to our SR-EITI 2016 report on the SR-EITI website: https://eitisuriname.org/en.

There is no register present at GMD, nor at MONR, that systematically displays the incoming and outgoing flow of applications, the status, the outcome of the application, nor acknowledgment by the parties of the receipt of applications respectively the provision of the ministerial order to the beneficiary/ applicant.

In November 2019, MONR has started with an online application process, which is a huge step forward in monitoring the progress of an application by the applicant as well by MONR.

Contract disclosure Mining

The content of a mining license is not publicly disclosed by MONR.

Generally, the minister of MONR, based on the advice of GMD, approves the requested Mining rights with references to and conditioned by the:

  1. “Mining Decree” E-58 (S.B. 1986 no. 28), containing general regulations concerning the exploration and extraction of minerals;
  2. State Decree of May 11, 1989 (S.B 1989 No. 39);
  3. “Mining Decree” E-58 (S.B. 1986 No. 28), Article 63, paragraph 1, amended by S.B. 1997 No. 44 and with S.B. 2014 No. 59, and as last amended by S.B. 2014 No. 176; 4;
  4. Brokopondo Agreement and with reference to the law of January 25, 1958 (G.B. 1958/No. 4) and to the law of August 3, 1977, No.8821 (Bulletin of Acts and Decrees No.45);
  5. “Economic Felonies Act of January 9, 1986” (S B. 1986 No.2, as last amended by S.B. 2008 No. 55). And furthermore, by specifying the right, the concession area framed by area coordinates, the duration of the right, the yearly surface payments and other conditions listed to be taken in consideration (See appendices for content of the Ministerial order for an approved license for the extension of the right of exploitation for mining);
  6. Mineral Agreement of 1994 and its 1st and 2nd amendment (2003 and 2013) where and when applicable; or
  7. Mineral Agreement (Merian Gold Project) 2013;
  8. World Bank’s environmental standards; compliance with these standards are required;
  9. Consideration of the local circumstances.

The licenses for minerals, gold and other minerals, are generally edited in a standard format and are made specific were necessary, for among others, the type of mining right, the location, the coordinates and the commissioner of the district where the mining right will be executed.

For further notification we refer to the appendix 11 of our SR-EITI 2016 on the SR-EITI website https://eitisuriname.org/en

Licences issued to RGM, NS/Surgold and Grassalco

As per December 31, 2017 the following licenses were granted to the 3 large mining companies.

RGM

Table 5.10 Overview of licenses granted to RGM. Source: RGM

Notes
  • The term of validity of the Gross Rosebel concession is, based on Article 15 of the Second Amendment to the Mineral Agreement of 1994, extended for a period of 15 (fifteen) years as of the current expiry date, mentioned in GMD-Decree 468/02. Since the expiry date as of the date of signing of the Second Amendment was 16 December 2027, the new expiry date is 16 December 2042.
  • In 2016 the Right of Exploration issued under number GMD 516/16 to NV1 has been transferred by NV1 to RGM, which is embodied in GMD 706/16.

All the licenses of RGM issued up to and including 2017 are registered at GLIS, the keeper of mortgages.

NS

Table 5.11 Overview of licenses granted to NS. Source: NS

All the licenses of Newmont /Surinam Gold Company issued up to and including 2017 are registered at GLIS, the keeper of mortgages.

GRASSALCO

Table 5.12 Overview of licenses granted to Grassalco. Source: Grassalco

The licenses of Grassalco issued up to and including 2017 are registered at GLIS.

With reference to the overview above we note that in 2017 the Brokolonko concession has been withdrawn and in 2019, 4 licenses granted to Grassalco for the right of exploration of gold in 2016 and in 2017 have been withdrawn by MONR.

Contract disclosure gold exporters non-large gold companies

This group of exporters belonging to a special category of entrepreneurs derive their authority to export from a special order issued by the Foreign Exchange Commission. Copies of this decision made by name / company and are sent to various authorities, including MOF, CBoS, MTI & T and the custom department.

These contracts are not publicly available. Similarly, the operational information about exports and transfers or licenses and royalties is not publicly available other than on an aggregated level.

To our general knowledge each special order:

  • Is tailor made;
  • Has a limited duration which can be extended;
  • Has a monthly performance export condition. If no export has taken place in the established affiliated period, the foreign exchange committee may withdraw it;
  • Describes that royalty fee on the gold produced must be withheld at time of purchase and deposited at the CBoS in favor of the state of Suriname;
  • Gold intended for export must first be submitted for processing at Kaloti Mint House Suriname (KMHS). One exporter of gold litigated against the state regarding the compulsory processing of the gold to be exported by KMHS. Based on the judgment of the judge in this case, the exporter may have his gold processed at the CBoS prior to export;
  • Has the condition that the exporter is obliged to offer 5% of its gold to be exported to the CBoS, who is not obliged to accept this bid.

During our testing of the reported royalty income from that gold exporters non-large gold companies we have concluded that 9 companies have contributed to the royalty income 2017 as reported by MOF.

According to a letter of the Foreign Exchange Commission one new export order has been issued in 2017.

None of the Government agencies/institutions we have contacted for information have given us permission to disclose detailed information about the export data per exporter of gold or about the contents of these special orders granted to the exporters.

2020-02-12T00:29:34-03:00Thursday 23 January 2020|EITI Suriname Report 2017|