Royalty paid on gold stuck for two decades at 5-8% – VP Bharrat Jagdeo

Jul 28, 2023 News

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Kaieteur News – For the past 20 years, Guyana has been receiving either 5 or 8% royalties from the large-scale mining companies operating here.

This was revealed on Thursday by Vice President (VP) Bharrat Jagdeo, during his weekly press conference held at Freedom House, Robb Street, Georgetown.

The Vice President was asked whether Guyana’s mining laws are favourable to foreign companies based on a story published in the Thursday, July 27, 2023 edition of the Kaieteur News titled, “Guyana has favorable mining laws, with govt. support…Canadian Gold Company tells investors.”

In his response, the Vice President stated that in the 1990’s the People’s Progressive Party Civic (PPP/C) administration contracted PricewaterhouseCoopers (PwC) International Limited, to review the country’s mining regime, and where the country was globally in terms of gold production and competitiveness.

“They (PwC) did a report and based on that report we established the mining regime, since then we have had stability in that regime, we have not changed it much with the exception of 2010-2011 I think just before I left,” Jagdeo said.

The Vice President explained that it was implemented when the price of gold went beyond US$1000 per ounce, large-scale mining companies’ royalty would raise from 5% to 8%.

“So our regime has not changed, our fiscal regime in the gold mining sector has not changed in 20 odd years, it remains the same,” Jagdeo further stated.

On Thursday, this publication reported that Canadian mining company, Alerio Gold Mines has hailed Guyana as a country with favourable mining laws and strong support from a pro-mining government. This was relayed in a presentation on their gold mining projects in Guyana to investors recently. Alerio is the same gold company that had told its investors that there is “gold fever” in Guyana.

According to the company’s website, some reasons why Guyana is a good choice to invest are because of: the country’s established Mining Act, it’s located in a Region with a rich history of economical gold deposits, and have favorable mining laws and government support.

Notably, Alerio entered Guyana’s mining industry in June 2021, and had announced its presence in the country via multiple press statements it had posted on its website. Notably, while the company was sure to announce its presence in Guyana via its website, the Guyanese government made no formal announcement to its citizens about the arrival of Alerio Gold.

SECRECY OF CONTRACTS

While foreign companies have been rushing to cash in on the “gold fever” in Guyana, the country has been suffering massive declines in its annual declarations since 2017.

Kaieteur News has requested on several occasions the release the mining contracts, particularly large-scale mining contracts by the Government of Guyana.

In 2019 when Guyana became a member of the Extractive Industries Transparency Initiative (EITI), the country agreed to adhere to several requirements. In this case, EITI requirement 2.4 (a) of the 2019 Standard states that Guyana should publicly disclose all mineral agreements entered into force prior to the reporting period, in this case, 2019. Although the requirements were known to the administration, it continued to make excuses to avoid the release of these contracts.

In this vain, this newspaper reported in December 2022 that Vice President Jagdeo dodged the matter on four different occasions. During a press conference in April however, he publicly committed to releasing the fiscal terms for all mining agreements. This was the second time the Vice President promised to “personally intervene” for the release of the fiscal terms of all large-scale mining contracts.

The Vice President made a similar commitment in August 2022 during an appearance on ‘The Glenn Lall Show’ aired on Kaieteur Radio. While appearing on that radio programme, he told the Kaieteur News’ publisher, Glenn Lall, “I don’t see the reason why many of these are not in the public domain already. I’ll find out about it.”

When pressed further Jagdeo said, “I can undertake to find out with you there, what the GRA [Guyana Revenue Authority] is so cagey about that it doesn’t want to release… I will undertake anything that is non-propriety, that you get it. I will personally now see that this happen.”

However, despite the Vice President’s promises, the contracts remain hidden.

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• Bharrat Jagdeo, Freedom House, Georgetown, Robb Street, Vice President

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