GGMC allows Bosai to deny potential state revenue

Feb 18, 2018 News

The Guyana Geology and Mines Commission (GGMC) has reportedly been allowing Bosai Minerals Group (Guyana) Inc. to stand in the way of potential State revenues.
The agreement that Omai Bauxite Mining Inc, had with the Government gave the company the right to “first refusal.” This provision in the contract gives the holding company the right to have first preference on any area of bauxite deposit. Bosai inherited that agreement from Omai.
Kaieteur News understands that over the last few years, applications were made by local and foreign companies to access bauxite deposits located in areas at Wismar, Region Ten. The response given to all these companies is that Bosai has the right to first refusal and has chosen to keep the area.
The way “right to first refusal” is supposed to work is, whoever owns the right to first refusal, when exercising that right, is supposed to propose to develop the area it chooses to keep.
One source told Kaieteur News, “Bosai is supposed to say, I have the right to first refusal so I am going to develop the area. But this has not been happening. Bosai is holding on to deposits and is not developing the area.”
“They are holding on to this agreement that says they have right to first refusal and so the deposits are there but are not being developed. Other companies can develop but it is not happening because GGMC is not doing what it is supposed to. ”
Kaieteur News understands that once interest is expressed in an area, the right to first refusal can only be exercised if the company that holds that right is willing to develop the area of interest in a reasonable timeframe.
“A company does not have obligation to develop an area that is on the list unless there is interest by another company to develop the said area,” the source explained.
The source continued, “GGMC is supposed to ask Bosai if it wants to develop a mine in the area. If the company says yes, GGMC is supposed to hold the company to a reasonable timeframe. But, invariably Bosai has been saying yes, yes, we want to but they never do develop the area. And, GGMC has been allowing the company to get away with this.”
This newspaper understands that another application was turned down as recent as two months ago.
This newspaper would have preferred to have a comment from Commissioner of GGMC, Newell Dennison. However, the public official has made it clear that he is not willing to speak to Kaieteur News.

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