Foreign-funded Guyana company granted right to Eighteen Prospecting Licences – in 2,200,000 acres of pristine territory

Introduction
Whatever the Minister of Natural Resources and the Environment Mr. Robert Persaud MBA may or may not have said to the Natural Resources Committee of Parliament, one fact is clear: MURI BRASIL VENTURES INC. has been granted “the right to apply to the Guyana Geology and Mines Commission for, and shall be granted (emphasis added) a maximum of eighteen Prospecting Licences for Rare Earth Elements, Bauxite, Limestone, Nephelene Syenite, Gold, Diamonds and Granite Stones.”

This is the unambiguous language of Clause 3 of the recently disclosed Permission dated November 7, 2012 granted by Mr. Persaud to the Company under the Mining Act of Guyana. The only proviso to the clause is that the grant is subject to compliance with the Work Programme and satisfactory proof of financial resources and technical capability for each of the potential eighteen Prospecting Licences which the Government is compelled to issue.

There are several and dangerous implications arising from the actions of Minister Persaud, whatever he and his Stakeholder Support Officer namesake may try to spin. Much has been made about whether or not Mr. Persaud lied, or as his counterpart in the National Assembly Mr. Joseph Harmon euphemistically put it, was economical with the truth. Of course, lying by politicians and, particularly this current crop, is not a barrier to upward mobility, often goes hand-in-hand with the accumulation of private wealth, and proudly worn as a badge of honour among peers rather than condemned by the citizenry.

Big Deal
The area involved in this Permission cannot be expressed in units of hundreds or even thousands. Rather the rights granted by the Minister cover an area of 2,200,000 acres of Guyana. That is over 4% of the land mass of Guyana. The Permission does require the holder to give up at least 25% of the area after the first year and the Permission itself is for a three year period. But those periods do not in any way restrict the size of any one licence which the Government is compelled to issue, or the period over which the 2012 Permission can develop into prospecting, and finally into mining licences.

Before delving into the Permission, let us briefly consider that the revenue which the Government of Guyana will collect over the three year period is a paltry US$85,000. In the first year the permission fee works out at 1.14 US cent per acre, and for the second and third years the fee is 1.82 US cent per acre per year. Clearly the Minister places very little value on the resources of this country.

Unlike several permissions granted under the same Act, the MURI permission is not limited to one mineral such as gold or petroleum. This is for at least seven distinct types of mineral. The opportunities and financial incentives for the permission holder to explore for these are commensurately greater. With the GGMC controlled by the Minister as if it is a Unit of his loosely defined ministry, any expectation that the GGMC would or could competently oversee the execution of the Permission seems hopelessly misplaced.

Security threat
Among my most serious concerns is the location of the Permission Area. It is located at the confluence of the Kuyuwini and Essequibo Rivers and is right on the border. Indeed, Annex A to the permission states that Point C of the area is “located approximately three hundred yards from the Brazil Guyana border”. Had the Minister done the kind of background research which one associates with such major decisions, he would have recognised that the national policy was against any commercial activity in the area. And had he applied his mind to his action he would have recognised that a potential consequence of his decision is a practical erosion of Guyana’s border since the issue of the eighteen Prospecting Licences leading to mining in the area will render the border exposed and vulnerable.

In other words, national security and territorial integrity could be compromised over a huge swathe of Guyana. The Guyana Defence Force (GDF) raised their voices in opposition in an earlier attempt under the Cheddi Jagan Administration. Has its policy changed or is it simply a function of personnel at the top?

It is to ensure that we are not exposed to such threats – as Robert Persaud’s action now does – that the GDF is given a place on the Board of the Geology and Mines Commission. The tragedy is that the law allows Persaud to bypass the GGMC and engage in the kind of recklessness starkly demonstrated by the MURI Permission.

The question of the implications for the country’s Low Carbon Development Strategy and our commitments to Norway and the international community that fell for Jagdeo’s blandishments and embrace of the environment is also an issue here. But that too was a mere façade, a charade in the name of responsible and clean government.

Money, influence and power
Of concern too is the capacity of the persons involved. The company, MURI BRASIL VENTURES INC. was incorporated in Guyana just months before the issue of the Permission, with a very modest authorised share capital of one hundred thousand shares with a minimum issue price of $1 each. It is unclear how the surveys will be financed but what we do know is that one of the directors is Yucatan Reis, believed to be a Brazilian national. The other director is Mr. Dean Hassan formerly of North American Resources Incorporated Limited, with which he parted company in less than amicable circumstances. The Secretary of the company is Mr. David Bacchus, a name that has long been associated with the GGMC and mining.

You would expect that the Minister would have caused to be carried out a thorough due diligence of the application and applicants, including all statutory compliance and money-laundering clearance, of all the persons behind MURI. Dean Hassan has friends in high places. At a Christmas party he hosted on Friday night at the New Thriving Restaurant, the Minister and the Prime Minister were prominent by their presence.

Conclusion
President Ramotar has only one option in this matter: scrap the Permission and relieve Robert Persaud of any ministerial duties. Mr. Persaud’s ministerial performance has been characterised by grave lapses and his commitment to responsible governance and accountability is even poorer than Guyana’s Transparency International Corruption Perception Index rating. He has proved how oxymoronic it is to have a ministry called Natural Resources and the Environment and how dangerous it is to have irresponsible ministerial interference and involvement over a well-resourced agency.

The news of the MURI Permission has drawn a not particularly friendly reaction from Suriname where the Deputy Speaker of Parliament is calling for her country to lodge a formal complaint with Guyana. That will certainly complicate issues even as the bigger question remains the border with Brazil.

Guyanese will now wait to see if Ramotar will define himself and protect the integrity of the borders of this country. Decisive action on this issue will give some credibility to his presidency. If he fails to act now, nothing ever will.

One thought on “Foreign-funded Guyana company granted right to Eighteen Prospecting Licences – in 2,200,000 acres of pristine territory”

  1. Hi Chris Ram,

    I’ve read your blog about this matter. What I do not understand is: how can Guyana give the rights to mine in that area to another party, when that area does not belong to Guyana, but to Suriname, the neighbouring country?

    There is a big political stir up in Suriname about this matter. Do the Guyanese people know about the ongoing talks c.q. battle about this area between Guyana and Suriname?

    I really want to know, because both our governments are not giving much insight.

    Regards, Usha
    http://www.ushamarhe.com

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