GGMC trying to close loophole costing Guyana hundreds of millions for decades now —Commissioner

Jul 09, 2019 News

While he admits there is need for a solution, Head of the Guyana Geology and Mines Commission, (GGMC) Newell Dennison says that the Commission has been trying for decades now, to plug the loophole which exists in the Mining Act.

GGMC Commissioner Newell Dennison

“This is nothing new; we are aware of the problem and we have been trying to come up with a solution for quite some time now….” Dennison said.
He added that the issue has been a part of an ongoing debate. Dennison was at the time responding to queries surrounding the loophole, which exists in the Mining Act of 1989.
The loophole has resulted in hundreds of millions in losses to the State, each year. The issue was highlighted in the 2017 report of the Extractive Industries Transparency Initiative (EITI).
The transparency body pointed out that large scale miners have cashed in on the loophole, which allows them to hold permits for multiple mining claims yet pay significantly less in land rental fees. According to the report, large-scale operators who hold in excess of 1,200 acres threshold are allowed to pay US$1 per acre on the annual rental fees as opposed to US$3 per acre yearly. The practice has contributed to the total shortfall to the government at considerable amounts per annum.
In its report, the EITI, therefore, recommended that GGMC take steps to close the gap. However, Dennison said while GGMC notes the observation of Report, it has encountered difficulty addressing the problem.
“The solution has not yet been arrived at because this issue is not as straightforward as it appears. There are a number of things to take into consideration. Firstly, this is not a matter to be addressed by the Commission alone; other stakeholders must be involved in the process.”
Dennison claimed that while the Commission is concerned about the loss of millions from the Government’s purse, there are a number of viewpoints to consider.
“We just don’t decide that an operator is a large scale based on the size of his claim alone; we look at whether the claims are adjacent to each other to make that determination.”
According to the GGMC official, a number of mechanisms have been proposed as part of a solution. He noted that while an amendment in the Mining Act might be plausible, there are other proposals to be considered.
“We have considered that perhaps an amendment in the law may help with the problem or imposing higher fees on medium scale acreage or even converting the claims to large scale. However, the fact remains that nothing will change unless the parties involved, determine what course of action will be best suited to address the issue.”
The EITI report of 2017 on Guyana noted that some 457 permits were awarded to companies operating under the category of medium scale mining operators. Medium scale operators are those considered as having between 150 and 1,200 acres of land on a single mining permit. Large-scale operators exceed the 1,200-acre threshold.
However, the EITI highlighted a trend in operators having multiple medium scale permits with total acreage exceeding the medium scale threshold.
“The total combined acreage of several mining permits awarded during 2017 to the same applicant exceeded 1,200 acres, which is the maximum surface for a medium scale mining permit. If these plots had been combined, exceeded the 1,200-acre threshold, [they should] have been categorised as being “large scale tenures”, which would involve paying higher rental fees and the licence award procedure requiring further approvals from other Government Agencies.”

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