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Haiti PM hopes to draft new mining law in 6 months

Wednesday, September 26, 2012 | 5:41 PM    

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UNITED NATIONS (AP) — Haiti’s government hopes to introduce a new mining law within six months that could set royalty rates of between nine and 12 per cent in an effort to ensure that the impoverished country benefits from its mineral wealth, potentially worth US$20 billion, the prime minister said Wednesday.

Haiti is seeking to update nearly 40-year-old mining laws in an effort to reap benefits from the little known-industry. The Associated Press reported in May that two mining companies have begun drilling for gold, copper and silver in Haiti’s northeastern mountains. They say testing indicates the metals could be worth US$20 billion, potentially an enormous boon for a country whose annual budget is US$1 billion and where most people live on less than US$2 a day. Actual mining is years away.

“The stakes are high,” Prime Minister Laurent Lamothe said in a brief interview with the AP on the sidelines of the UN General Assembly meeting in New York. “Haiti needs its own resources.” 

Lamothe 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 nine and 12 per cent. He called the current rate of about two per cent per ounce way too low.

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

Although Haiti’s mining potential has been known for decades, foreigners were unwilling to risk exploring in a country plagued with corruption and chronic instability. Dan Hachey, the president of a Canadian exploration firm now investing in Haiti, Majescor Resources, told the AP earlier this year that he hopes the billions of dollars in foreign assistance promised for recovery from a 2010 earthquake will make the country more accountable.

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.

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