Mining Sector Licenses: Understanding Acquisition and Inherent Challenges

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The Land Management Division LMD) within the Guyana Geology and Mines Commission (GGMC) is responsible for the administration of mineral properties as outlined in Guyana’s Mining Act 1989. The Mineral properties overseen are categorized in size as large and medium scales, and from an operational view: prospecting, mining

and reconnaissance.

These are sub-divided as follows; Prospecting (PL) and Mining/Quarry Licences (ML/QL) as large scale tenure, and Prospecting Permits Medium Scale (PPMS), Mining Permits (MP) and Special Mining Permits (SMP) being medium scale tenure.

The majority of the Division’s work, due to the amount of properties, is centred on the medium scale category, while the large scale tends to be more complicated and requires input from stakeholders outside of the division.

Reconnaissance or Permission for Geological and Geophysical Surveys (PGGS) is a sub-category of large prospecting properties that extend over huge areas, but due to the nature of mostly aerial investigations, the footprint on the ground is minimal. Administration of small scale mining properties (Claim Licence) is the responsibility of the Mines Division, with the LMD playing a major role in verifying the status of the area applied for when granting such Licences.

The LMD is ISO Certified for its property management systems. In January 2015, the Commission would have undergone its fourth annual audit for recertification. The ISO 2008:9001 Management Standard is customer centric and based on four quality objectives; high customer satisfaction, timely processing, zero errors and continual improvement. Certification is premised on these quality objectives being satisfied. Unfortunately, the inaccessibility of

 

files during the investigation period made it impossible to evaluate causative factors when unprecedented delays were occasioned.

Processing new applications can be broken down into two main areas; clerical and verification. Clerical refers to administrative matters relating to granting, while verification is related to the determination of the availability of the area for granting. Should the area be available, the application is recommended, while a refund is recommended if it isn’t. The entire process is premised on various levels approvals, from the Cartographic Supervisor to the final approval of the Commissioner, Chairman representing the Commission and Minister as dictated by the Mining Act.

Except for the PGGS, granting of permits and licences are premised on a public approval by way of publishing notices in the Official Gazette. This requires the LMD to prepare various notices of; Intention to Grant, Transfer,

Amendments, Rescissions and Cancellation of all transactions related to Properties. The effective preparation, checking and validating the accuracy of such publications, especially the cartographic description, is extremely time consuming. In addition, the preparation, filing before and after publication and updating the plethora of batches requires a coordinated and well managed effort. The majority of these processes are expected to be automated in the ongoing computerization Property Management System project.

Processing large scale applications require multiple approvals from the various divisions within GGMC. PLs are only granted by the Commission only after the Geoservices Division has approved the Work Program and Exploration Budget. Renewals of PL are also subject to the scrutiny before they can be approved by the Commission.

Mining and Quarry Licences, due

to their nature, require in addition to work programs and budgets, technical mine or quarry plans along with estimated production figures. The Environment Protection Agency (EPA) is also engaged by the applicant to provide an Environmental Permit prior to the granting of the Licence. The submitted documents are routed to the Mines Division for review and approval.

The approval of the Commission is sought once the engineers are satisfied that the plans are in manner and therefore discussion relating to the licence occurs at various levels in government that are outside the domain of the Commission. Decisions taken at these levels are communicated through the Commission’s office and effected by the LMD, where applicable.

Processing of requests for Tax Remissions is coordinated through the LMD. Often, such remissions are based on Investment Development Agreements (IDA) or Mineral Agreements for large scale property holders. However, medium-scale property holders may qualify for remission provided that they meet stipulated requirements as set out by GRA and MNRE. In cases where remissions are requested on the basis of an IDA, the request is compared to the items approved for that IDA. The IDA itself is endorsed by the GeoServices Division on an annual basis and is directly related to the applicant’s work program. Once all conditions are met, the Commissioner recommends the waiver of Tax for endorsement by the MNRE.

The division provides a variety of customer desk services for miners, property holders and the general public. These services include tenure information in the form of maps, stock sheets and descriptions. Customers may approach the LMD and are able to receive individual attention if their uery is not readily addressed by

the standard map services. The latter situation forms the majority of the cases, and customers often require some form of attention to address queries and complaints.

Specific officers are then assigned to deal with different matters.

As a standard, all applications must be accompanied by payment after applications have been submitted to the LMD. Payments are made within the Finance Division and files with corresponding updates in the form of stamp and payment details are routed to the Division via the central registry.

The Commissioner’s Office and Legal Division would, from time to time, request different files for information and evidence of transactions. The Commissioner’s Office, however, would regularly receive a plethora of files, correspondences and notices for approval and signatures.

Large Scale Prospecting and PGGS

– The Land Management Division would coordinate all applications and renewals with the Geoservices Division, whose input with respect to. work programs, budgets, financial and technical capacity form a key part of the approval and granting of PLs.

Mining Licence – The Mines Division plays a central part in the approval of the Mine Plan. However, the Commissioner may request different managers for input/review for the granting and approval of such licences. Equipment and items identified for the remission of taxes are vetted and endorsed by the GeoServices Division.

Quarry Licences – The Mines Division plays a central role in the approval process for Quarry Licences. However, the Commissioner may request input from relevant officers with expertise specific to the said application. However, similar to the Large Scale, equipment and items requested for duty free are endorsed by the GeoServices Division.

Mining Permits – The Mines Division would be requested by the LMD to verify that a property is in good standing in cases where Environmental Bonds refunds are requested.

Claim Licence – Files need to be routed back and forth between Mines and LMD for the Recommendation of Claim Verification Report.

All processes within the LMD are transacted from an IT basis. The IT infrastructure is a critical component of the Division’s performance. IT would be involved in the maintenance of the network of computer hardware.

CHALLENGES

A significant challenge of the Division, and Commission in general, is the perception of corruption and applications being treated in an unfair manner. This lack of trust in processing procedures can be attributed to several factors, some of which are discussed below. However, it is important to note that the current system of “First come, First served” has stood the test of scrutiny. The dual approach, independent payment and administration of files, provide a solid basis for a deterrent against malpractice and allow breaches, if they do occur, to be easily identified.

1. Unclear policy decisions with respect to Prospecting Licences. These relate specifically to expired PLs for which the licensees seek to have a renewal, consistent with the terms of their PLs, but in contravention of the regulations which would render the lands subject to the expired PL as state lands and open for location by anyone. This regulation dictates that all PL’s revert to state lands after expiration. Companies, for justifiable reasons, request further time on these PLs. Such requests, if submitted, are the subject of much back and forth, while the areas are deemed legally vacant. Note that the PL document appears to be in conflict with the regulations as it suggests that the Minister may allow an extension beyond the mandatory 5 year limit. There is a further complication in relation to Art. 35.2 of the Mining Act, which would maintain the life of the licence even after its mandatory expiry in the circumstances of appeals to the GGMC. The licence remains in full force and effect until a formal decision is made by the GGMC. Some of these decisions have taken years to be delivered, thus forcing the licence

well beyond its mandatory limit, but with great uncertainty! As a consequence, the areas have been applied for and granted, in some cases, to Medium Scale applicants. This situation has resulted in a lack of confidence in GGMC’s procedures by the said PL holders and allegations of data breaches by the commission staff. To ensure a transparent and level playing field, no areas should be allowed to revert to State Land without a public notice. They should enjoy a closed status until officially declared open in a transparent way by publication in the Official Gazette. There are several options available to ensure that those serious about doing work acquire the area. If there is strong interest in the said area and the minerals can be optimally worked outside of a unitized framework, the Commission should split the area and make same available only via auction and lottery.

2. Little or no prime areas available for mining.

Given the high interest in the mining sector, there are very little prime areas available for prospective applicants. In addition, the majority of properties are held by a few persons who hold prospective miners at ransom. The current laws do not allow a cap on ownership but does allow properties to be challenged. However, challenging a property is onerous and time consuming, and may not be worth the effort. In any case, this is not the modus operandi of the current community.

3. There are currently no provisions in the law to transform Small Scale or Medium Scale permits to a larger scale permit class. Many local actors have said that this should be encouraged to ensure better management of adjacent permits. Note that, in some cases, changes of class have been made by simultaneously dropping and applying for areas.

4. There is no cap on individual ownership of a specific title type, as such, “landlordism” has taken over the mining industry.

Article Categories:
Business · Business Industries · Business Tips · Minning

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