ADDRESS BY

HIS EXCELLENCY DR. PERTAAPNARIAN.S.R. RADHAKISUN

VICE PRESIDENT OF THE REPUBLIC OF SURINAME

AT THE MIAMI CONFERENCE

‘INVESTING IN THE AMERICAS ‘97’

Miami, April 1997

Mr. Chairman, Excellencies, Ladies and Gentlemen,

Thank you for your kind introduction. First of all, I would like to bring all of you the greetings from the Government and the people of the Republic of Suriname.

I am honoured to have the opportunity to address you and this distinguished audience to present you the great mineral potential which Suriname has to offer to all who can appreciate an excellent opportunity.

History tells us that in 1597 Sir Walter Raleigh came to the Guyana’s looking for the famous Parima lake and El Dorado. This lake, as legend goes, had beaches of gold, readily minable. Unfortunately, Sir Walter Raleigh did not find this fortune. We in the Guyanas are sure that El Dorado will be found either in Suriname or in our neighbouring countries. Because of cosmic reasons I know that El Dorado is looking at Suriname.

Mr. Chairman, Ladies and Gentlemen,

The present Government came into office effective September 1996, after the general election of May 1996. From the inception on it has been one of our first objectives to fit into the Global investing environment, and how we go about improving the fate of our people.

In his policy declaration of the year 1996 up to the year 2001, the President of Suriname, Dr. Jules Wijdenbosch, has stressed that, in line with the government’s objective to implement a national reconstruction program, this policy integrates and mobilizes all possibilities, know how and resources to achieve a worthy and stable social and financial economic status for the country.

The Heritage Foundation recently published its 1997 Index of Economic Freedom. The index measures how well countries score based on a list of ten economic factors, such as trade policy, taxation, monetary policy, capital flows and foreign investment. Suriname was ranked one hundred thirty third out of one hundred and fifty.

I am asking your special attention for the following measures which were taken by my Government in order to reform the economy.

The Government is operating on a balanced budget;

Government regulation decreased substantially;

The corporate tax rate decreased from 50% in 1994 to 38% in 1997;

Tariff rates for imports decreased significantly through a sliding scale mechanism.

As a result the inflation rate of 45% in 1995 dropped to a level of minus 1% in 1996. Therefore, ladies and gentlemen, my presence at this conference must be seen in the framework of the great importance and high priority which the Government of the Republic of Suriname, under the leadership of our President, is giving to the development of the mineral potential other than bauxite, as part of its strategy toward advanced development of the nation.

Ladies and gentlemen,

Suriname is ranked by the World Bank as the seventeenth richest country in the world, measuring its natural and human resources.

With respect to the mineral sector the long term objective of the Government of Suriname is a sustainable development of the sector, a fair distribution of benefits to all stakeholders, and environmentally sound mining operations.

In determining the required strategy to achieve these goals, it is obvious that, in order to attract investments in the mineral sector, we have to be competitive.

Suriname, as part of the Guyana shield, offers a favourable geological environment with great potential for exploitation of gold, diamonds, copper, kaolin and granite.

Within the context of investment, we may want to look into the area of energy. Since 1965 the bauxite industry operates a hydro-electric power plant with an installed capacity of one hundred an ninety Mega Watts. This power is primarily used in the bauxite industry for refining and smelting, while a portion is sold to the local power company. In the Western part of Suriname there is more potential for a hydro-electric power generation plant, capable of generating an estimated eight hundred Mega Watts.

The alumina industry is also using a major share of indigenous crude oil production by Staatsolie, the local State owned oil company. Smaller industries are using Staatsolie 1500, a typical blend developed by this company, to generate affordable energy for their production processes.

Ladies and Gentlemen,

Golden Star and their partner Cambior, after five years of dedicated exploration, expect to submit a final feasibility study for the Gross Rosebel Mineral Project to the Government by the end of this month April 1997. We compliment Golden Star and Cambior for their efforts and success in this project.

Several prospects for gold and other minerals in the well known Benzdorp and the Sarakreek area, both situated in the greenstone belt, are in advanced exploration stage. Initial results indicate the presence of economically minable deposits.

My Government is aware that with the development of the mineral resources the environment must be protected. Therefore, the environmental guidelines of the World Bank for Mining and processing of minerals will set our standards.

In the past 5 years the following significant developments have taken place in the mining sector in Suriname:

n Crude oil productions was increased to a level which covers a significant part of the industrial needs and allows partial export of the production for further refining.

n A petroleum refining plant will be in operations by September this year. Present total crude oil production exceeds the refining capacity, allowing for continued crude oil export.

n The bauxite-industry invested over one hundred million US dollars to ensure profitable production well into the next century. The feasibility study of the Bakhuys bauxite deposits in the Western part of Suriname, a multi-million ton deposit, is in this final stage. This deposit will guarantee a bauxite supply for at least another 25 years.

Last year numerous mineral exploration rights were granted, and exploration efforts are stepped up, mostly by Joint Ventures between locals and foreign exploration companies. Companies involved in mineral exploration in Suriname are -amongst others- Golden Star, Carnarc Resources, Blue Ribbon Resources, Homestake Mining and BHP.

Ladies and Gentlemen,

The Government of Suriname has committed itself to create an investment friendly environment to attract private capital and realizes that procedures to obtain a mining title should clearly specify the obligations of the involved parties during exploration, development and production, in order to increase the confidence of the investors.

Mr. Chairman,

I am pleased to announce that the Government of Suriname has approved a Standard Mineral Agreement to facilitate investments. This agreement consists of crucial elements necessary for investors to effectively access the investment climate.

Conditions to attract long term investments in the mining sector, such as freedom to export and sell mineral output at world market prices without restrictions, access to foreign exchange at market rates, repatriation of capital and similar matters important to investors, are strongly immersed in the Standard Mineral Agreement.

Some benefits included under the proposed legislation are:

A Royalty Rate of 2.25%

Attractive rates for corporate tax

Duty exemption on imports of capital equipment

Favourable depreciation rates

Stability clauses, in the exploration an exploitation phase

We are confident that all potential investors will find their interests adequately insured.

Ladies and Gentlemen,

Your question mark might be: “it all sounds interesting, but what kind of guarantees can the Government of Suriname offer?”.

In this light I would like to point out that during the eighty years of bauxite mining in Suriname, we kept our commitments to existing agreements.

Mr. Chairman, Excellencies, Ladies and Gentlemen,

On behalf of the Government and the people of the Republic of Suriname I thank you for this opportunity to present a general overview of my country’s new mineral development policy. I am convinced that a combination of national efforts and foreign investments will lead to a prosperous development of the mining sector in Suriname.

I conclude to stress, on behalf of my Government, that the fundamental objectives of the mining policy of Suriname are:

An attractive and realistic rate of return for the investors, and

A fair profit sharing between the people of Suriname and the investors.

We are confident to have established a favourable climate for investors in our mineral sector and we welcome you heartily to our country Suriname.

Thank you.