Remarks by Hon. Winston Dacosta Jordan at PDAC Convention

Remarks by Hon. Winston Dacosta Jordan, Minister of Finance

Minister of Natural Resources

Guyana Mining Day

March 3, 2019, Toronto, Canada

Ladies and Gentlemen,

What an absolute pleasure and honour it is to speak with the leaders, investors and stakeholders – the movers and the shakers, so to speak – of the world’s largest, most prestigious mining and exploration Convention!

This is my second time here following my debut last year, and it is a privilege to be given the opportunity to present my government’s aspirations for our country’s prospects in this exciting and still evolving industry.

One of the takeaways from my participation then was the sheer magnitude of opportunities that can be exploited at this event. However, there is an urgent need for governments to have a clear and present strategy to explore those opportunities albeit, with careful consideration for the preservation of the environment and cultures that are impacted by mining activities. Equally, such a strategy must include the improvement of governance of the sector through the development of a robust and competitive regulatory framework, the building of consensus when tackling associated social and environmental challenges, the employment of best practices, and the maintenance of industry standards.

This Convention provides an integral platform for stakeholders to pursue practicable solutions, and break new ground to meet the global challenges that are inimical to the growth and prosperity of the industry. In that regard, the foresight demonstrated by the organisers of this annual pilgrimage cannot go unacknowledged. So please join me in a round of applause for the men and women who continue to make this event the success that it is. (Pause for applause).  Thank you.

Now, as we discuss the future of the industry today, there are issues that we must contemplate and confront. For example, how do we narrow the opportunity gap between stakeholders while maintaining healthy competition; how can we efficiently and effectively harness what is available to us while seeking after new discoveries; how do we manage the partnerships between investors and governments, and investors and communities; how do we ensure that women are adequately represented; and how can we create a more enabling environment that can guarantee investors will be satisfactorily compensated; and perhaps most importantly, how do we achieve all that with minimum disruption to nature.

These are challenges and concerns that will continue to preoccupy our development practitioners and policy makers in the course of charting and executing our economic agenda. My government has invested considerable resources – both human and financial – to examine sustainable solutions to these concerns. So please allow me to re- introduce to you all the Jewel in the Caribbean’s Crown, the Caribbean’s Eldorado, ‘set gem-like and fair, between mountains and seas’ – my land, my country, the Cooperative Republic of Guyana.

Synopsis of Country Profile

Last year I explained Guyana in considerable detail. For those of you who were not present then, the geographic location of the Cooperative Republic of Guyana, which incidentally has just celebrated its 49th Republic Anniversary, is unique.

It is found on the northeast coast of Venezuela, with Suriname on its East, Venezuela to the West, Brazil to the South and the mighty Atlantic to its North. Not to be confused with Ghana, which is situated in West Africa, Guyana has the distinct advantage of being the only English speaking country in South America, and the perfect gateway for the Caribbean and North America.

Guyana is multi ethnic and multi religious with a population of just about 750 thousand people. And it is a virtual treasure trove of natural resources – boundless arable lands that are rich in mineral deposits and pristine tropical forests that are home to many endangered species.

The economy is vulnerable to the vagaries of international market conditions for critical exports such as sugar, rice, gold and bauxite. Nevertheless, it has for the last 15 years, enjoyed steady, positive growth in the economy. In its most recent review of Caribbean Economies, the Caribbean Development Bank (CDB) described Guyana as having one of the fastest growing economies with growth hovering around 3.4 percent. The economy is projected to further expand by 4.6 percent, this year, before returning a stratospheric growth rate in excess of 25 percent next year.

Our fiscal position remains strong, with growing current account surpluses; the balance of payments is projected to be in surplus this year, following deficits in 2017 and 2018; and our public debt is prudently managed, with the debt to GDP ratio being 44.4 percent, well within the internationally accepted ratio of 60 percent for countries emerging from the Highly Indebted Poor Countries (HIPC) Initiative. The country’s international reserves have been maintained at about 3.5 months of import cover, while inflation has been suppressed at an average of 2 percent over the past four years.

Our banking system is sound; it was strengthened last year with the passage of four pieces of legislation that dealt with insolvency and deposit insurance. At a time when countries such as Saudi Arabia, Nigeria, Panama, the Bahamas and Trinidad and Tobago are being added, Guyana has been officially removed from the European Commission’s Money Laundering Blacklist – a fitting reward for my government’s relentless implementation of policies and measures to combat money laundering and terrorist financing, sanitise our economy of dirty money, fight tax evasion and remove the scourge of corruption that plague transactions.

Guyana is generally considered to be a politically stable democracy, and enjoys a relatively peaceful and harmonious existence among the six races that make up this cosmopolitan country. This is quite unlike the situation in several countries in Latin America and some other regions of the world. In fact, right now we are watching democracy at play – it makes for a rather interesting lesson.

In the past 4 years, Guyana has featured repeatedly in the international press for the more than 5 billion barrels of recoverable oil discovered off-shore by ExxonMobil in partnership with Hess and CNOCC. Even if you have spent the last year in the deepest mines of the Cuyuni, I am certain that you have heard stories about these vast discoveries in the land of the fabled city of gold.

And as if to demonstrate its Midas-like touch, ExxonMobil, recently, disclosed its 11th and 12th discoveries. With 17 prospects still to be drilled in the Stabroek Block, Guyana is on target to produce 1 million barrels per day. Indeed, research analysts at Wood McKenzie have predicted that Guyana can surpass oil production in Mexico and Venezuela, thereby positioning the country to become, eventually, a power house in Latin America. Exploration of our off-shore basin will continue apace this year as several licensed operators have signalled their intention to ramp up drilling given the success of ExxonMobil and its partners.

Production of oil is on target for the first quarter of 2020, but there are good indications that this timetable could be advanced to the last quarter of this year. Guyana is expected to earn significant revenue, once production begins, which will be used to create jobs in manufacturing, industry and value added agriculture, among other sectors of the economy; improve and expand the physical and social infrastructure, to, for example, facilitate and support oil and gas activity, accelerate natural resource development such as bauxite, and connect the hinterland and the coastland; and generally bring prosperity and the Good Life to the Guyanese people.

I must admit that as a government and country, we are both excited and cautious. This is a long awaited dream of our people and we are beyond grateful that it has finally happened.

While we have focused much attention on developing the legal and regulatory framework that will govern this new resource, we have also devoted significant efforts to ensure that our other productive sectors continue to grow. We are wary of the dreaded Dutch disease and the resource curse, and are actively devising policies to ensure that our other productive sectors remain competitive even as our economy embarks on structural change.

To further safeguard our impending wealth, my government has successfully developed and passed in Parliament, a Bill that sets out the regime for Guyana’s version of a sovereign wealth fund, which in our instance, is called the Natural Resource Fund (NRF). This fund is modeled after the best practices and principles of sovereign wealth funds, and its objectives include:

  1. Stabilisation of public spending;
  2. Minimising a loss in economic competitiveness;
  3. Fairly transferring natural resource wealth across generations; and
  4. Financing national development priorities.

While the Fund will initially receive petroleum revenues only, there are provisions to allow for excess mining and forestry revenues to be deposited in the Fund. Though much of the current buzz surrounding Guyana pertains to the petroleum industry, I’d like to reassure you that wealth generated from the oil discoveries will be used to create an enabling environment for the growth of our other sectors. Withdrawals from the NRF will Finance national development priorities as outlined in my Government’s new vision for Guyana–the Green State Development Strategy: Vision 2030. This strategy prioritises investments in Guyana’s human capital, infrastructure and energy as we work towards diversifying our economic base and creating an enabling environment for investors.

This means that you can be assured of an expanded pool of skilled labour which will be available to the sector and the cost of logistics will be significantly reduced as a result of investments of critical infrastructure. Upgraded roads, bridges and ports stretching across the breadth of Guyana, will increase the efficiency with which our resources can be extracted, and a clean and reliable energy source will increase the attractiveness of processing our mineral resources prior to exporting.

We are also developing other oil and gas policies to safeguard local content, protect the environment and incubate human resources. We are committed to the development of all of our resources for the realisation of the good life for all Guyanese.

Whither Mining

It would be difficult to ignore or relegate to ignominy, the proud tradition of mining which began in 1868.

According to HE David Granger, President of the Cooperative Republic of Guyana, in his monograph, The Green State, “Guyana has been mining and exporting bauxite for over 100 years and gold for about 150 years. Gold mining accounts for 9.6% of our GDP, 24% of exports, and 78% of national mineral production.”

But our mineral portfolio extends well beyond bauxite and gold. Of course, we are known for diamonds and several industrial minerals including silica sand, mica and manganese; base elements such as copper, lead, zinc and nickel; ferrous metals like iron and laterite; energy metals like uranium and semi precious metals like amethyst, green quartz, black pearl, agate and jasper.

The mining sector is integral to Guyana’s Foreign Direct Investment portfolio, a significant source of revenue to Government and a major pillar on which the economy stands. That mining holds an important locus to Guyana’s economy goes without saying. All stakeholders generally agree that if managed well, our abundant natural resources have the ability to change the economic fortunes of the country. It is therefore, reasonable to conclude that my government is in no hurry to replace this sector; rather we want it to thrive.

We are focused on retooling and reforming the sector. In that regard, this Convention is important to us gaining and exchanging information and knowledge in areas such as innovative techniques; methods of sustainability; and survival and productivity, especially in light of climate change. We are all cognizant of the risks that climate change pose to physical assets and infrastructure; supply chains, by the disruption to transport networks; the availability of land and water; and the health and safety of site based employees. These risks are amplified by the already challenging geographies and climates in which mining takes place.

So Guyana is moving beyond merely encouraging increased declarations by small and medium operators. Indeed, we want to encourage innovation into the sector, address the constraints to exploiting and remedy the deficiencies in the investment regime. And my government will continue to ensure that the investment climate is conducive enough to attract you, the investor, to invest and add value to our minerals beyond the mine gate.

So, what’s in it for you, the private investor? Here is a non exhaustive shopping list of reasons why investing in Guyana’s mining sector will be rewarding.

  1. Your investment is safe in Guyana and is protected under our Constitution and laws. My government believes in the sanctity of Contracts entered into with all investors.
  2. We have developed a National Mineral Sector Policy Framework and Actions – 2019 – 2029, which captures our key objectives and elaborates our strategies and approaches in reforming the sector in a holistic, integrated, responsive, and responsible manner. This framework has benefited from several rounds of stakeholder consultations within Guyana.
  3. It also addresses administrative inefficiency, enforcement, bias, corruption, compliance, competitiveness and incentives for investors and performance using modern industry methods;
  4. We have lowered the income tax threshold and introduced a progressive royalty regime for small and medium producers.
  5. In the office responsible for promoting investment – Go-Invest, you will find a friend and partner who is mandated to provide support and assistance to cut through any red tape, thereby ensuring a hassle free experience.
  6. We recognise that land is an important asset for the sector and the bureaucracy for acquiring same can be a nightmare, so we have simplified the procedures for acquiring land. The Guyana Geology and Mines Commission which is represented here today can provide ready information on lands that are available for use.
  7. The Guyana Revenue Authority which is responsible for tax administration is undergoing reform and modernisation; it is capable of advising and expediting your tax needs whatever those will be;
  8. Our Banking sector though challenged recently with correspondent banking issues that have affected the Caribbean and other Regions, is well equipped to handle all your international transactions; credit card transactions and wire transfers can be done easily and quickly;
  9. Access to credit can be arranged with any of the local commercial banks, within the guidelines and regulations governing domestic borrowing.
  10. The exchange rate is stable. There are no restrictions on repatriation of profits, dividends and other earned incomes.
  11. Guyana enjoys a high literacy rate, hovering in the 90 percentile range. There is a ready labour force with experience in mining that you can access easily. Others can be trained quickly to adapt to the technology of the. Sector. We only ask that you treat the workers fairly, ensure their safety and comply with the labour laws of the land;
  12. Because the country is small, you my friends, are assured of easy access to policy makers, technical officers and government ministers.

So Ladies and Gentlemen, there’s no question about the enormous premium of the mining sector to Guyana’s prosperity. It has served us well in the past, and will continue to do so into the future. Significant opportunities exist for investment in it. As a government, we recognise the challenges in realising these opportunities, but we are determined to make sure we create an enabling environment investors who will risk it. By working together, we can ensure the sector continues to flourish and make ongoing contribution to our economy.

I extend a warm invitation to our home, where you will be treated like family. Guyanese are known for their hospitality. We will support your mining, exploration and exploitation while ensuring that it’s done in an environmentally friendly and sustainable manner.

The future is in our power to shape.

Together we can explore the world of possibilities in mining.

I look forward to new partnerships and re-enforcing of old friendships.

I thank you.