The small but relatively important mining and quarrying sector makes a significant contribution to the economy. In terms of estimated recoverable reserves the largest deposits are of sand and gravel, blue limestone, plastering sand, yellow limestone, clay, porcelanite and andesite (a form of volcanic rock). In 2013 reserves were estimated at 467.1m tonnes, distributed over an area of 71.4 sq km, mainly in Trinidad (although andesite is found almost exclusively in Tobago). These materials are used principally in the construction and civil infrastructure industry. “Large infrastructure projects like the highway extension from San Fernando to Point Fortin and San Fernando to Princes Town are set to sustain high levels of demand for limestone, sand and gravel in the short term to medium term,” Bevon Cook, acting CEO of National Quarries Company (NQC), told OBG.
According to a 2014 estimate by the Ministry of Energy and Energy Affairs (MEEA), the mining sector represents around 0.1% of GDP and somewhere between 0.6% and 0.8% of the economic value added (EVA) of the construction sector. Although the data is incomplete, at the upper end of that range, the MEEA’s numbers suggest that the mining sector in 2013 had an EVA of TT$71.81m ($11.1m).
There are several issues around mining, quarrying and processing. Successive governments have neglected the industry and, as a result, a lot of mining and quarrying is carried out informally and illegally, with a range of negative knock-on effects, for example, in areas such as safety and environmental protection. Because of these concerns, in November 2014 the MEEA published a consultative green paper on minerals policy, which it said was “intended to serve as a guide for national discussion and debate in which all stakeholders are encouraged to participate and contribute”.
Tax & Royalty Evasion
The green paper revealed a number of anomalies. One of the most significant was that only around 10% of the royalties due from mineral mining and quarrying in 2001-13 were actually collected, representing a loss to the state of around TT$120m ($18.5m). Total tax evasion was probably higher, as other applicable taxes and the business and green fund levies were not included in the calculation. Also according to the green paper, at the end of April 2014 there were 88 active mining operations in the country, of which more than half were operating with expired licences. There were also 62 unlicensed mineral processing plants. The paper highlighted environmental challenges, health and safety standards below acceptable levels, and overlaps and inconsistencies in existing legislation, including an absence of “effective enforcement mechanisms”. In some areas squatters have occupied potential mining lands. Among a list of additional concerns are the use of overweight trucks that damage local roads, stresses on natural water systems, deforestation and other biodiversity losses.
The paper recommends a range of measures, including passage of new legislation regulating the industry; improved resource management and regulation of environmental and safety standards; better training; investment in product diversification; and greater use of data collection and export promotion.
It also suggests that more attention should be paid to under-developed sectors such as asphalt. The Pitch Lake is world-known as the source of a semi-solid emulsion of soluble bitumen and mineral matter that has been in continuous use for asphalt production for more than 100 years. The MEEA’s paper says a study should be commissioned to look at the potential for asphalt development, to include environmental, economic and social implications “with the view of achieving, where feasible, the optimal value acquisition from extraction and production, with minimal impact on citizens and the environment”.
A potential difficulty facing the attempt to reorganise the management of the sector is that 2015 is an election year and any legislation may be postponed due to other priorities. It is also clear that better regulation will require increased government spending at a time when there are growing needs for fiscal austerity.