And just like that, an Australian company which invested some US$90m here from 2014 to produce 110,000 ounces of gold per annum has picked up and fled in the dark of the night leaving huge debts to the state, a scarred landscape in Region Seven, workers bereft and numerous questions about the conduct of multinationals.
Troy Resources Limited’s flight from Guyana bore no relation to the classic 1963 movie of the tunnelled escape from a German World War Two prison camp but was more akin to the fortified mythical Greek city that became undone by a Trojan horse.
Following several reports in this newspaper enquiring about the fate of Troy Resources and its apparent disappearance from its mine site, Karouni, the PPP/C government finally announced that it had flown the coop while owing $2.6b in royalties.
It was Stabroek News which had reported on August 11, 2023 that the company was closing its much vaunted gold mining operations as it did not find the market feasible anymore. In a notice, the company announced the sale of its assets and sources told this newspaper that “the company has basically shuttered its Guyana operations and is waiting on the administrator to give word of the final day…”
Yet, despite this clear signal, more than two months elapsed before the Troy licence was cancelled by the government and it predictably set about wringing its hands about what to do next. The feint by Vice President Jagdeo on Thursday about searching for Troy’s supposed assets in Georgetown is just chuntering and will lead nowhere as in the case of tracking the infamous Mr Su.
There is plenty of blame to go around and the proximate dereliction lies with the Guyana Government and its several responsible agencies. When the PPP/C took office in August of 2020, Troy Resources had already been in dire straits following changed market conditions, difficulties in raising financing, the death of a geologist at its site which led to a costly closure by the previous government and the passing of one of its senior managers.
What precisely did the Guyana Geology and Mines Commission (GGMC) and the Ministry of Natural Resources do to ensure that Troy’s operations were closely followed to ensure exactly that if the worst came to pass that this country would not be left in the lurch financially and environmentally? It appears that they did nothing based on the final outcome. At Karouni in Region Seven, a mine where cyanide had been employed in extraction of gold and where tailings facilities would have been present, the mine was left abandoned without any sign as to what dangers might lurk.
Again, there would be grounds for the immediate removal of the Minister of Natural Resources, Vickram Bharrat as is the case with the ongoing scandal to reduce disputed oil expenses from US$214.4m to US$3m. However, in keeping with PPP/C governments’ longstanding policy of protecting theri ministers at all cost no matter the scale of the transgression, evidenced also by the Dharamlall episode, Mr Bharrat is going nowhere.
As to the GGMC, its blighted role in the infamous 2016 Production Sharing Agreement with Esso Exploration and Production Guyana Limited and any number of other issues should have already seen its dissolution and recreation.
The public must now be privy to all of the correspondence between Troy Resources and the regulatory authorities so a determination can be made about who turned a blind eye to the decampment in glaring breach of the company’s financial, industrial and environmental obligations.
What of the Environmental Protection Agency (EPA) and its responsibilities as it related to the mine closure plan? One could perhaps understand a pork knocker being allowed to escape stirring up sediment while panning in a river but a huge open-mine operation, employing cyanide with ambitions for underground mining can simply pull up stakes and flee? Just in passing, is its US$5m gold mill still on site and usable? The manner of Troy’s departure would be laughable if it weren’t serious given the unresolved questions. The public should also be privy to a report from the EPA on its engagement with Troy to ascertain the state of its operations. Wasn’t there routine testing done on site by the EPA of water and soil samples and might it not had noticed attempts to slink away or is the EPA now only an oil and gas agency? There must also be a report done on the current state of the mine site and this should be made available to the public.
Omai Gold Mines Limited was a very unsavoury name in terms of the benefits to the country from its business here. What now of Troy? Two separate PPP/C administrations have presided over this yet unquantified debacle. The first was the Ramotar administration. In bountiful optimism it signed the deal in 2014 with Troy Resources which was studded with fiscal concessions.
The Investment Development Agreement (IDA) was signed by the then and current Minister of Finance, Dr Ashni Singh, on April 25, 2014. “Execution of this IDA allows the company’s Guyanese operating subsidiaries to import duty and tax free the majority of the capital equipment required to be sourced offshore for the Karouni Project, as well as goods required to support its ongoing exploration program,” a statement from Troy had said.
The Mineral Agreement was signed on October 17th, 2014 at which point Troy Resources said that it reduces uncertainty for all parties, “it is transparent, confirms commitments and acknowledges the desire to work together with the government in the task of providing for a better investment climate and to move the country towards a better tomorrow.” There was hardly a better tomorrow and the company has now taken flight and is nowhere to be found.
Then President Ramotar was reported as saying that the signing of the mineral agreement was very significant and showed continued confidence in the Guyanese economy. Then Minister of Natural Resources and the Environment, Robert Persaud, who signed on behalf of the Government of Guyana, said “this is an agreement that all Guyanese will be proud of”. According to the statement that was issued, he said that the agreement was designed to bring maximum benefits to the country and the government was confident, given Troy’s excellent track record, the company would be a good partner and deliver an investment that would make Guyanese proud. Mr Persaud was clearly misguided in his expectations.
There are really only three things left to be done. The first is a full investigation of who failed to discharge their obligations here in intercepting Troy Resources’ abscondment. Who will do such an investigation and whether it could ever be free of the deadening hands of government is unclear.
Second, Troy Resources, in all of its incarnations, must be pursued through the courts here and in Australia for all outstanding sums and the fulfilment of its mine closure obligations. The recently passed Foreign Judgements (Reciprocal Enforcement Act) 2023 will be given an early test in this respect. A complaint should also be lodged with the Government of Australia and business bodies there.
Third, given the country’s tortured history with medium and large scale gold miners, there should be a forensic examination of the balance sheet of this venture to determine whether these deals are worth entering into given the country’s changed economic circumstances. There should be an evaluation of the fiscal concessions granted to the company ranged against the royalties from several years of production, corporation tax, wages to workers and the cost of the termination of the deal.
President Ali has to be held accountable for the poor governance. Let Troy Resources be a lesson to this government as it relates to others such as the Aurora mining operations and dare we say ExxonMobil which is not incorporated here, has nary an asset to its name in this jurisdiction and is self-insured.
