SURINAME MINING COMMENTARY
Suriname, officially the Republic of Suriname, is located in South America on the north-eastern coast of the continent. The country is bordered by the Atlantic Ocean to the north, French Guiana to the east, Brazil to the south and Guyana to the west. Suriname is a former colony of the Netherlands; following Spanish and English exploration and settlement it became a Dutch colony in 1667 and remained so until independence was achieved in 1975. From 1975 to 1991 a period of political unrest ensued with a military coup in 1980 and numerous ‘counter-coups’. In 1986, a civil war broke out in Suriname. In 2010, the former dictator Desire Bouterse was elected to power and was subsequently re-elected in 2015.
Suriname is a mineral rich country and the economy is heavily reliant on natural resources, with the mineral and energy sectors contributing around 30% of Suriname’s GDP (World Bank). The country is one of the world’s top ten bauxite producers. Alumina, oil and gold are the primary mineral exports; in fact collectively these resources account for 85% of all exports and 27% of government revenue (CIA Factbook). Agriculture is also a key industry, with rice, shrimp, fish and bananas amongst main exports. The USA is the country’s largest consumer. Unsurprisingly Suriname’s economy is greatly influenced by changes in commodity prices; as a result the government, with support of the World Bank, has begun to develop plans to diversify the economy.
Suriname is not included in the latest Fraser Institute PPI (2016).
PRINCIPAL LEGISLATION AND REGULATOR
Suriname’s mining industry is primarily regulated by the Mining Decree 1986 (Mining Decree), which was last amended in 1997. That said, exploitation and exploration rights may also be negotiated with the government in the form of Mineral Agreements, which are approved and enacted as law by the National Assembly. The country does not have any developed environmental legislation applicable to the industry, though the guidelines published by NIMOS provide helpful insight into the environmental assessment requirements applicable to projects. A draft mining law and draft environmental legislation has been released, though progress with promulgation is proving slow.
Pursuant to Article 2 of the Mining Decree all minerals in and on the ground are considered as separate property from the land, with the State possessing sovereign rights over the country’s natural resources. The mining industry in Suriname is overseen by the Ministry of Natural Resources (Ministry). Pursuant to the Mining Decree, the Minister of Natural Resources (Minister) is responsible for developing policies to govern the industry (Art. 3, Mining Decree). The Minister is responsible for granting mining rights under the Mining Decree (Art. 9, Mining Decree), though as noted above Mineral Agreements are to be negotiated with the Minister and the Suriname government and must be approved and enacted by the National Assembly (De Nationale Assemblée (DNA)).
GRANTS AND FORMS OF MINERAL TITLE
Applicants for mining rights in Suriname must be a resident of the country or, in the case of a corporation have an established office in Suriname (Art. 8, Mining Decree). All applications for rights granted under the Mining Decree must be made in conformity with Article 10. Rights may only be granted if the applicant proves to the satisfaction of the Minsiter their financial position, technical capacity, organisational capability and experience with regard to the mineral(s) for which mining rights are requested (Art. 9, Mining Decree).
- Reconnaissance Licence: Grants the holder the exclusive right to carry out reconnaissance activities in or on the terrain for the mineral(s) for which the rights have been granted (Art. 23(1), Mining Decree). Rights are granted for a period of no more than two years, which can be extended once for a further one-year period (Art. 22(1), Mining Decree). Rights are granted for an area not greater than 200,000 hectares (Art. 22(2), Mining Decree). Rights holders are obligated to carry out reconnaissance activities according to the agreed work program and time schedule; to inform the Minister about discovery of mineral indications within 30 days; submit quarterly reports; and present annual reports of scientific and technical results, amongst other things (Art. 24, Mining Decree). Rights are non-transferable (Art. 11(1), Mining Decree).
- Exploration Licence: Grants the holder the exclusive right to carry out exploration activities in the area for the mineral(s) for which exploration rights are granted (Art. 28(1), Mining Decree; see also Art. 28(2), Mining Decree). Where the applicant is the holder of reconnaissance rights, the Minister will take steps to arrive at an agreement with the applicant in a short period of time (Art. 26, Mining Decree). Applications must: specify the mineral(s) for which the application is made; include a general work program as well as a detailed work program relating to the first 12 months of exploration which includes information on time schedules, costs, personnel and materials; and include a statement in which the applicant commits to spending a certain minimum sum, with proof of a bank deposit or guarantee where requested by the Minister (see Art. 25, Mining Decree). Rights are granted for a period of no more than three years, with two further extensions, each of two years possible, providing the holder has carried out activities to the satisfaction of the Minister in accordance with the agreed program and met the expenditure requirements (Art. 27(1), Mining Decree). Rights are granted for an area no larger than 40,000 hectares; 25% of the area must be relinquished upon renewal (Art. 27(2), Mining Decree). Applicants for exploration rights may choose to negotiate a Mineral Agreement with the Minister to establish the terms applicable to exploration (Art. 27(4), Mining Decree). Rights holders are obligated to: begin exploration activities within three months and to continue activities without interruption of more than four months, unless the Minister approves otherwise; carry out exploration activities in compliance with the agreed work program and consult annually on a detailed program for the following year; inform the Minister about each finding of minerals within 30 days; meet the minimum expenditure requirements; maintain technical lists; refrain from commercial production; submit quarterly reports and annual reports on scientific and technical details; and pay the relevant fees, amongst other things (Art. 29, Mining Decree). Exploration licences may be transferred, in whole or in part, providing the written consent of the Minister is obtained and the transferee meets the application requirements (Art. 11(2), Mining Decree).
- Exploitation Licence: Grants the holder the exclusive right to exploit mineral(s) for which the right has been granted (Art. 34(1), Mining Decree; see also Art 34(2), Mining Decree). Where the applicant is the holder of exploration rights who has discovered a mineral deposit of possible commercial value and has fulfilled all other obligations, the Minister will take steps to come to an agreement with the applicant in a short period of time (Art. 31(1), Mining Decree). Applications must be made no later than six months before the termination of exploration rights (Art. 30(1), Mining Decree). In practice exploitation rights are granted via Mineral Agreements, which are negotiated with the Minister and government and subsequently enacted as law by the DNA. Applications must: state the mineral(s) to be mined; provide details of the mineral deposit with extensive reports on reserves and a technological report; contain a program of exploitation activities with a timeline; detail the production capacity to be installed and estimated total proceeds from the deposit; provide a prediction of capital to be invested and details of exploitation costs, sale proceeds and the intended method of financing; provide a plan for the training and transfer of know-how to Surinamese; and include a plan for activities relating to making the mined land usable again (Art. 30(2), Mining Decree). Exploitation rights are granted for a period of no more than 25 years and can be extended pursuant to the terms of the Mineral Agreement (Art. 33(1), Mining Decree). The rights are granted for an area no greater than 10,000 hectares (Art. 33(2), Mining Decree). Rights holders are obligated to: promptly start exploitation activities and continue without interruption unless the Minister approves otherwise; provide annual reports on the quantities of production and export for the year, as well details of imported goods, estimated export values, levies to be paid and sum of money to be financed; keep accurate lists of technical and financial data; report annually on reserves; submit quarterly technical reports; submit annual reports with details of investment, export, employment etc.; and pay the relevant fees (Art. 35, Mining Decree). Exploitation licences may be transferred, in whole or in part, providing the written consent of the Minister is obtained and the transferee meets the application requirements (Art. 11(2)-(4), Mining Decree).
The Mining Decree also provides for small-scale mining rights and rights for the exploration and exploitation of building materials (see Ch. VII & VIII, Mining Decree).
The State has the option to participate in exploitation (Art. 32(1), Mining Decree). The specific terms of this participation will be negotiated and specified under the Mineral Agreement granting exploitation rights. Annual land fees must be paid in accordance with Article 63. Royalties will also be owed to the State; rates are to be determined by State Decree as well as payment terms, though again in practice these terms will form part of the Mineral Agreement.
In relation to surface rights, mining rights holders must give advance notice to land rights holders prior to starting activities. Compensation, based on damages and the value of the land, must be agreed between the relevant parties. Where agreement cannot be reached an application for a judicial determination may be made. Land rights holders may also request land be purchased where occupation is for more than seven years or the damage caused leaves the land unfit for purpose. The factors to be considered in the determination of compensation by the judiciary are provided. Where land rights holders refuse to allow access following the payment of compensation the State may intervene. (See Mining Decree, Ch. IX, Rights of Third Party).
The Mining Decree also includes general obligations including that all mining activities be conducted in the most efficient way, taking into account the higher interests of the nation and keeping in mind most modern international techniques, health and safety and the community in general, as well as the norms for protection of ecological systems (Art. 4(1), Mining Decree) and the requirement to give preference to Surinamese goods and services (though notably only if conditions relating to price, quality etc. are favourable) (Art. 4(2), Mining Decree).
See Suriname- Environmental Regulation.