SITUATION ANALYSIS OF THE SMALL-SCALE GOLD ... - WWF

The absence of a government presence in the mining zones further complicates the
situation. In many cases a sub-letting scheme is the only way to control the zone and at
least collect some income from mining activities on one‟s concession. Some concession
leasing systems are a provisional strategy for dealing with squatters on the concession
and represent a way to bring the situation on the property under control until a LSM
enterprise can be interested in developing the prospect. Some concession holders are not
eager to invest in mining enterprises without an elaborate reconnaissance and investment
scheme at a capitalization level that only experienced foreign mining enterprises can pull
together.
It is not clear at this time how the investment benefits from both systems compare. Both
systems have advantages and disadvantages. Most certainly the risks faced by a permit
holder who mines are very high, because sufficient capital is rarely available to conduct
extensive up-front exploration and ore estimation. The amount of capital that the active
miner of a permit must raise is also considerable. The zone management enterprise does
not take the investment risk associated with the purchase of mining equipment and
operational expenses, but this type of enterprise cannot directly influence mine
production. The commercial risks are by the unit owners that work on the property borne.
Thus, while the mining enterprise has a direct influence on the mining activities, the
concession management enterprise does not.
Non-active permit holders. A leading figure in the Suriname mining sector noted that he
did not now what was worse, a non-active permit holder or an illegal occupant. He said “I
cannot find words to describe the situation. A person receives a mining permit and does
nothing with it. He or she does not even try to make contact with illegal miners on the
property that the State has legally placed under his or her control. At least the illegal
occupant is mining. These permits should be withdrawn immediately.”
Speculation was the main reason for obtaining these permits. When foreign gold mining
investors turned their attention to Suriname in the 1990s, many influential persons in
Paramaribo, most with no mining experience at all, quickly obtained permits in all the
unallocated portions of the greenstone belt. Having locked in the potential gold
mineralization zones, foreign investors were forced to turn to these gatekeepers of the
greenstone belt to secure exploration prospects. Hefty fees were paid on an annual basis
to lease these exploration permits. One foreign investor complained that this situation
further increased the cost of the already very expensive, risky and difficult to finance
exploration programs. This form of absenteeism is detrimental to the sector. The holder
of the permit discourages others from exploration for viable deposits, and takes no
responsibility for the management of the area, thus providing a breeding ground for
crime, pollution and other undesirable social developments.
Summary. A SSM enterprise offers the owners the opportunity to invest directly in small
gold mining and earn a profit. Though this approach is risky, good management and
mining expertise have produced positive results in some instances. The purpose of
establishing concession management, on the other hand, is usually motivated by the
desire to first bring the property under control of the legal title holder. The owner will at
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