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Metals producer Suriname promises WTO safeguards for investors
June 10, 2013 / 7:03 PM / 4 years ago

Metals producer Suriname promises WTO safeguards for investors

GENEVA, June 10 (Reuters) - South American metals and energy producer Suriname, which signed deals last week with U.S. and Canadian miners, said on Monday that it plans to improve safeguards for investors and set up a sovereign wealth fund.

The World Bank ranks Suriname 164th out of 185 economies for ease of doing business, and 183rd in the category of “protecting investors”, according to written questions for the country’s review at the World Trade Organization.

But Trade Minister Raymond Sapoen told the WTO that survey was erroneous because some of the latest reforms had not been communicated to the World Bank, according to documents from the closed-door meeting seen by Reuters.

Suriname was drafting laws to cover competition, insurance, foreign exchange and intellectual property, as well as a revision of its 2001 investment law, Sapoen said.

Suriname also plans to set up a sovereign wealth fund, which would use revenues from resources such as gold and oil, Sapoen said, to invest in sectors such as agriculture and tourism.

Last week Suriname signed a deal with Canadian miner Iamgold Corp to expand its Rosebel mine and extend a partnership to develop it until 2042. The National Assembly also approved a 25-year deal with U.S.-based Newmont Mining Corp to develop the Merian Gold Project.

Suriname would take a 25-30 percent stake in Merian and invest $300-400 million, Sapoen told Reuters. Most of the gold from Merian would go to the United States and the output from Rosebel to Canada, he said.

“Now the gold sector contributes over 90 percent of the export revenues,” he said.

Newmont has said the Merian project could potentially produce 400,000 ounces of gold annually. That would eclipse the 385,000 ounces that Rosebel produced in 2011.

Currently smaller mines produce most of Suriname’s gold and 42 percent of total gold exports go to the United Arab Emirates.

Canada’s representative at the WTO meeting said the Rosebel mine already accounted for about 20 percent of Suriname’s gross domestic product and under the expansion plan the state’s share of the expanded portion of the mine would be 30 percent.

But the Canadian diplomat also urged Suriname to improve its business and investment climate.

The documents say Suriname’s state oil company is upgrading the country’s only oil refinery in a $1 billion project to expand its capacity from 7,000 barrels per day to 20,000 barrels per day, enough to meet gasoline demand for its 500,000 people.

It is also running a pilot project, using sugar cane and Brazilian expertise, to make ethanol that it could export to the United States.

Suriname’s traditional big export earners were bauxite and alumina for the U.S. housing and car markets. It produced more than a quarter of world bauxite output in the 1940s, helping the United States to fight in the Second World War.

Its market share has slumped in recent years but if export markets pick up, it may consider building a smelter to produce aluminium.

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