Monday, May 12, 2014

Irresponsible assumptions in the aragonite issue and debate

Fueling alarm and confusion

Dangers loom with irresponsible agitation

Managing Editor

The alarm over aragonite is reaching a fever pitch.

A coalition of pastors, union leaders and civil society activists has been making the rounds on talk shows, demanding that the government negotiate higher royalties for aragonite, a unique mineral with a wide range of uses.

At a press conference in Rawson Square last Tuesday, National Congress of Trade Unions of The Bahamas President John Pinder estimated that the government could pocket as much as $300 million per month, or $4.2 billion a year, if it renegotiated the royalties to no less than $350 per metric ton.

The government currently receives $2 per metric ton on aragonite exported from Ocean Cay, just south of Bimini.

The figures quoted by Pinder are significant amounts.

The coalition also says in its fact sheet being circulated that the Bahamian aragonite operation has the potential to be a multi-trillion-dollar industry.

President of Sandy Cay Development Co. Limited Tony Myers, whose company has a 25-year lease from the Bahamas government, said they are selling on average at $12 per metric ton — far from the $900 figure we keep hearing from the coalition.

At the press conference last week, Pinder was supported by Dwight Smith, chairman of the Police Staff Association; Gregory Archer, president of the Prison Staff Association; members of the Bahamas National Citizens Coalition, and other activists who claim the royalty portion of the agreement between Sandy Cay and the government is up for renewal next month.

We asked Pinder on Friday where the numbers he quoted came from.

While Pinder was the spokesman at the press conference, he told us he did not personally do the research and advised us to speak to Wesley Campbell, who he said is the researcher for the Bahamas National Citizens Coalition.

But a seemingly irritated Campbell refused to speak to National Review yesterday.

He angrily accused us of “deceiving” the coalition’s chairman, Rev. Andrew Stewart, by failing to provide him with a copy of the lease between Sandy Cay and the government.

Campbell said the failure of National Review to turn over the lease to the coalition was deceptive because the coalition had previously provided National Review with information as part of its probe into the aragonite issue.

While Campbell refused to speak to us, Stewart did so on Friday night.

We questioned him about the information his group has put into the public domain.

Stewart said the coalition has a research team that has done a lot of work.

We asked him about the coalition’s claim in a fact sheet that the lease between Sandy Cay and the government of The Bahamas is “renewable every two years” and was granted by the Progressive Liberal Party (PLP) government.

He insisted this was a fact.

When informed by National Review that the lease was signed under the Ingraham administration and does not speak to renewal every two years, Stewart said this statement by the coalition had been based on an “assumption”.

We found this admission simply unbelievable.

Asked whether the coalition leaders have read the lease, Stewart admitted that they had not and asked National Review if he could have a copy.

We then committed to asking our source whether this would be possible.

We believe the coalition was confused by a letter written by Permanent Secretary in the Office of the Prime Minister David Davis on June 3, 2010 to H. Campbell Cleare III, the attorney for Sandy Cay.

In that letter, Davis advised Sandy Cay that it could recommence its aragonite operation while a new lease was negotiated. Sandy Cay bought the old lease in 2009 from AES Corporation, which operated at Ocean Cay and unsuccessfully sought to get approval from the Bahamas government for a liquefied natural gas (LNG) operation.

The government signed a 25-year lease with Sandy Cay on April 20, 2012.

The lease signed with Sandy Cay provides for “a royalty computed as B$2 per ton for demised mineral exported from The Bahamas encompassing the first five years of the lease, after which the royalty shall be computed as 10 percent of the sales price, with a minimum fee of B$2 per ton up to a maximum fee of B$12 per ton for demised mineral exported from The Bahamas”.

The lease was backdated to June 3, 2010 when negotiations began.


After admitting that the coalition is agitating even though it has not read the lease, Stewart said the fact that the lease is not up for renewal adds strength to the coalition’s argument.

“It’s unthinkable to us that the lease would have been a mere blanket 25-year lease and after over 40 years having been renewed by successive governments periodically, for the government to just give them a 25-year blanket,” said Stewart, who also could not prove that the government previously agreed to leases renewable every three years.

The government’s former lease for Ocean Cay had no such provision either.

“What our assumption was, not seeing as you have seen the 2012 lease, having only had in our possession the 2010 lease, we assumed that it was renewed somewhere around the anniversary of the 2010 year lease,” Stewart explained.

But again, there was no 2010 lease, just a letter written by the government to Sandy Cay allowing the operation to resume while the negotiations for a new lease took place.

Stewart told National Review, “We stand corrected that it is the FNM government and that it is not this government” that negotiated the lease.

He added, “Having discovered that now and having that verified it’s a far more horrendous position that the Bahamian people find themselves in than we had ever imagined. Our research department just gave the daily cost on the world market.”

Myers, the Sandy Cay president, provided an invoice showing that one of his latest shipments had a cost of $12.50 per metric ton.

Asked whether the coalition has taken into consideration that aragonite has significant add-on value after it is processed by U.S. companies that buy from Ocean Cay, Stewart said, “We recognize that there are layers of costs and pricing, but world market price first cost, our research department has discovered that $900 is a figure.”

After further questions from National Review, Stewart also admitted that the coalition never reached out to Sandy Cay to ask questions on what the company is doing or how much it sells aragonite for.

Incredibly, he also admitted that the coalition has not had conversations with the government over a matter it has been making so many demands about.

After it was explained to him that the lease is not up for renewal, Stewart said the government could still act in the interest of the Bahamian people.

“We feel that the government is the influential bargaining agent that can influence or with the stroke of a pen change these arrangements,” said Stewart, insisting the coalition has “professional research”.

He added, “The Bahamian aragonite is the most sought after aragonite in the world because it is of the highest quality.”

Further explaining why the coalition has acted without reading the current lease for aragonite harvesting that exists, Stewart said, “The whole issue with regard to our natural resources has been a private issue in the Office of the Prime Minister.

“Facts are not easy to come by, and for us to have gotten this far, I think we have done a yeoman’s job. And in fact, one must remember that we are operating without the Freedom of Information Act.

“Once we have that it wouldn’t be like pulling teeth. And so, we have come this far by faith and we trudge on ahead in seeking to inform the Bahamian people.”


We agree with Stewart on the need for the long-discussed Freedom of Information Act.

While we see wisdom in discussing the aragonite issue and whether the Bahamian people are getting what they deserve, we abhor discussions fuelled by misinformation, incomplete information and emotions.

This is counter productive to what those leading the cause might be seeking to achieve, and it may create disharmony.

The so-called facts being put in the public domain are fuelling hysteria and a great deal of confusion.

The coalition should be embarrassed that it is making claims in the absence of all the facts.

It is riling the emotions of the public although it has not read the aragonite lease.

It is speaking — by the admission of its chairman — based on an “assumption”.

This is highly irresponsible.

It has not spoken to the principal of the company harvesting aragonite.

It has not had discussions with the government on this matter.

Union President John Pinder trusted the “research” of the Bahamas National Citizens Coalition.

Pinder said revenue from increased aragonite royalties could be used to pay every Bahamian at least $50,000 within 18 months of adjusting the terms.

He said this could significantly drive down crime and bring prosperity for all Bahamians.

Pinder aligned his good name with what the coalition presented to him, and did so with the backing of both the police and prison staff associations.

We wonder if the coalition knows how easy it is to access the lease it has not seen.

We respectfully urge our fellow citizens to be careful how they accept information without doing their own research.

We have reported the results of our initial research into this matter.

We do not take the side of Sandy Cay, but it is important to give it a voice in this national debate and that is why we contacted its principal, Tony Myers.

It is why we asked him to allow us to see his company’s invoices.


Last week, Minister of Environment Kenred Dorsett said successive governments have “not been aggressive” enough when negotiating royalties for aragonite.

He also said the former administration signed off on an aragonite royalty of $2 per metric ton, even though it initially wanted a figure of between $12 and $15.

The minister also suggested the deal is being reviewed.

“We are looking at those issues to make sure the people get what they are entitled to in terms of their fair share of the revenue associated with extracting those natural resources.”

Dorsett advised that a Cabinet sub-committee was formed a few months ago to address this matter.

It is clear that the government should play a stronger role in bringing a more temperate approach to this debate.

We make no statement on whether the government is getting fair royalties.

If in fact there is a review taking place, we hope, and we assume that the government is making use of its scientific and technical experts to drive the process.

Clearly, there is also a need for public education on this matter.

The government should make a full and clear statement, as opposed to ambiguous statements not thoroughly considered.

In driving this discussion, all involved should do so responsibly — the government, the media and civil society.

This matter has reached a point where the spread of misinformation has had a huge impact on many people now demanding the government renegotiate royalties.

In a democracy, agitation is good.

But in the absence of facts, it could be dangerous.

Its outcome can only be positive if it is done responsibly.

May 12, 2014