Haiti seeks new law to ensure benefits from $20billion mineral wealth

NEW YORK, USA, Wednesday October 3, 2012 — The government of Haiti wants to introduce a new mining law that could set royalty rates up to 12 percent to ensure that the country benefits from its mineral wealth, which is potentially worth US$20 billion, according to Prime Minister Laurent Lamothe.

The country is seeking to update its nearly 40-year-old mining laws in an attempt to reap benefits from the hitherto little known-industry.

The Associated Press reported in May that two mining companies have begun drilling for gold, copper and silver in Haiti’s north-eastern mountains. Testing indicates that the minerals could be worth US$20 billion, a potential godsend for a country whose annual budget is US$1billion and where most people survive on less than US$2 a day.

Actual mining is still years away.

“The stakes are high,” Prime Minister Lamothe said in an interview on the sidelines of the United Nations General Assembly meeting in New York. “Haiti needs its own resources.”

The prime minister said Haiti is seeking advice from several countries with important mining industries, including South Africa, Chile and Peru, on policies that would both encourage foreign investment and secure fair profits for Haitians.

He said the government hopes to introduce a draft law to parliament within six months and said the government is contemplating setting royalty rates of between 9 and 12 percent. He called the current rate of about 2 percent per ounce way too low.

Disaster-ravaged Haiti, the poorest country in the Western Hemisphere, is trying to strike a delicate balance. Royalty rates that are too high could drive badly needed foreign investment elsewhere. One of the world’s largest gold mining operations is opening in neighbouring Dominican Republican, and the company will pay 3.2 percent per ounce royalty on net sales, along with other taxes.

Haiti’s mining potential has been known for decades, but foreign investors have been unwilling to risk exploring in a country plagued with corruption and chronic instability.

Dan Hachey, the president of Majescor Resources, a Canadian exploration firm now investing in Haiti, said earlier this year that he hopes the billions of dollars in foreign assistance promised for recovery from the 2010 earthquake will make the country more accountable.

Prime Minister Lamothe expressed optimism that the new mining law, once introduced, will find support in a parliament that has not always been friendly to President Michel Martelly since he took office in 2011.

The Haitian government is now focused on trying to hold long overdue local and legislative elections. Ten seats in the 30-member Senate are empty because their terms expired in May after elections weren’t held in time.

UN Secretary-General Ban Ki-moon discussed the need to hold the overdue local and parliamentary election during a meeting with Martelly last Wednesday, the UN said in a press statement. Click here to receive free news bulletins via email from Caribbean360. (View sample)