The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s finance spokesman yesterday urged the Government to mandate that mining and extractive industries ventures be majority-owned by Bahamians.

Kwasi Thompson, the east Grand Bahama MP, told the House of Assembly during the debate on the Mining Bill 2023 that Bahamians cannot be left as “spectators, watching from the sidelines” while foreign-owned companies generate profits from this country’s mineral resources that belong to them,

“This land, this seabed, this sand—it belongs to the people of The Bahamas. The minerals beneath our soil are not assets to be bartered off in boardrooms or haphazardly handed to foreign corporations. We must change this familiar story: Foreign firms extract, export and profit while Bahamians watch from the sidelines. We must guarantee that Bahamians will be owners, not spectators, in their own natural wealth,” he argued.

“Should this industry be reserved for Bahamians or majority-owned Bahamian companies? It is my belief that any company that is granted a licence should at the very least have majority Bahamian ownership and participation as we do with respect to other industries.”

Sectors such as retail are purportedly reserved for exclusive 100 percent ownership under the National Investment Policy, and Mr Thompson asserted: “We as a government should say whether we believe it’s an industry reserved for Bahamians or if it’s an industry reserved for 50 percent or more Bahamian ownership.

“Obviously there have to be partnerships, strategic partnerships and international participation, but we should make sure we have this policy that reserves Bahamian rights in these companies and put that in legislation that says if we’re going to grant a licence it should at the very least be 50 percent or majority Bahamian ownership to protect Bahamians.”

Mr Thompson subsequently told Tribune Business that the Bill lacked a mechanism to give small Bahamian retail investors an opportunity to buy an ownership interest in a mining company. “There was no mandate or provision for the Bahamian individual investor to invest in what could be a profitable venture,” he said.

“We have to look at this as an entire industry, not just licensed businesses. We have to look at how to grow an entire industry, which means not just the business but all those businesses that could be connected to it... The Bill speaks to training employees of licensees. The licensee has an obligation to train employees, but what I’m suggesting is that licensees have an obligation to build an industry not just their own companies.”

Shanendon Cartwright, the FNM’s deputy leader, questioned the timing for when mining firms have to lodge a performance bond to guarantee that the land they use will be “rehabilitated” once finished with. And, in the case of international firms, he argued that the bond should also cover termination pay for employees to prevent them from fleeing The Bahamas without settling such liabilities.

The Bill allows the Government to take a “minimum”10 percent equity ownership interest in mining firms, while profit sharing also enables it to receive “a minimum of a 25 percent of the profits of the mining operations” along with royalties. However, Mr Cartwright challenged if these had been benchmarked against international comparatives.

Prime Minister Philip Davis KC, in his contribution to debate on the Bill, said: “This Bill will introduce a Mining Cadastre Register, so that Bahamians can see for themselves who is applying for mineral rights and mining licences, who has received rights and licences, and the relevant details of who, what, where, when and how these activities shall be conducted.

“This transparency is critical. The natural resources of this country belong to the people. Through this Bill, we are establishing – for the first time – the right of the Bahamian public to be made fully aware of any reconnaissance, prospecting or mining happening in our country.

It is crucial, given our history, and given the exploitative model we see in so many places, where outsiders make profits while the people lose, that we prevent unscrupulous practices in our country. That kind of funny business is no business at all. It is economic thievery masquerading as enterprise. It is the theft of sovereign wealth. And it will not happen here.”

Promising that Bahamians will no longer receive “pennies” for exploitation of their natural resources, Mr Davis said: “This Bill establishes that any mineral resources discovered in our country, whether on public or private land, belong to the Commonwealth of The Bahamas. It can never be the case that mining activities are able to circumvent the law by being solely carried out on private property.

“The Government is entitled to collect both royalties and fees on behalf of the Bahamian people. These funds will be collected by our National Investment Fund to go toward critical infrastructure, climate resilience, and other necessary investments to build up our nation. 

“Under this Bill, in addition to obligations to train and employ Bahamians, Bahamian businesses must also be given first preference as suppliers of goods and services. As we continue to renew and reform the principles which guide our expectations for investors, the inclusion of Bahamian businesses will play a major role,” he added.

“We will make this requirement a part of National Investment Policy framework, so that all investors understand our expectations when it comes to including Bahamian businesses. Through royalties, fees and the inclusion of Bahamian businesses, we are maximising the economic impact of any mining activities in our nation.

“This includes the provision of a minimum 25 percent profit-sharing arrangement between the mining operation and the Government. The Government is also entitled to hold a 10 percent equity interest in the holder of a mineral right. In other words, there will be no arrangements where the Bahamian people receive pennies on the dollar,” Mr Davis continued.

“In this Bill, we are also protecting the interests of the Bahamian people by aggressively going after any party that seeks to defraud or mislead the public when it comes to their mining activities, and anyone who contravenes the law or seeks to assault or hinder officials in the execution of their duties.

“These actions will be penalised with both fines and imprisonment. We require fair, honest and transparent communication with the Government and Bahamian people so that we can make the decisions that align with our strategies for economic growth.”