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Report reveals…Abuse of GGMC’s allocation of licences and permits costs Guyana millions$$$$
By Kiana Wilburg
Guyana’s first report to the Extractive Industries Transparency Initiative (EITI) has exposed the rampant abuse of systems at the Guyana Geology and Mines Commission (GGMC) which govern the allocation of licenses and permits.
The report notes that in a number of instances, an operator is able to acquire several medium scale mining permits. But a closer look at the location of the permits revealed that they were granted in the same area and run one after the other. If they were added, the plots would have exceeded the 1,200 acre threshold and would therefore be required to be categorized as being “large scale tenures.” The report notes that large scale tenures involve paying higher rental fees. Such a licence award also has a different procedure that requires further approvals from other Government Agencies.
By cheating the system, the report notes that the nation is losing significant revenue since the annual rental fees due by large scale operators is USD$3 per acre as opposed to USD$1 per acre for medium scale mining operators.
In light of this, the report recommended that GGMC considers taking into account the combined acreage of the permits when awarding them to the same applicant and when the plots are continuous. A call was also made for GGMC to conduct a review and an update of the list of current active mining permits in order to comply with the definition of the large scale mining licence given that several of them cover neighbouring plots for the same extractive entity and exceed 1,200 acre when combined.
Furthermore, the report notes that the Mining Act (1989) allows GGMC to conclude agreements with applicants through direct negotiation without any requirement to follow any tendering procedures.
In light of this, it was recommended that GGMC considers the amendment of the awarding procedures in order to include the clear definition and distinction between large scale licences and medium scale permits. It states that this is necessary in order to comply with the legal awarding process of mining permits and large-scale mining licences set by the Mining Act (1989).
In order to address under-exploitation of mining licences covering large plots by investors that might not have the required technical and financial capacities, the report recommended that GGMC applies the tendering process for the awarding of mineral agreements.
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