Today, Ayiti has become synonymous with humanitarian need.
Shifting the focus from aid to investment requires a new conversation. One about commerce, workforce, production, risk, and profit.
That conversation is probably hard for some to wrap their minds around, given the narrow view of the small nation many have around the world.
What exactly does doing business in the poorest nation in the Western Hemisphere look like? Not unlike other commercial transactions that occur regularly in the wealthy economies that comprise the Western Hemisphere, like the United States, Brazil, Venezuela, Panama, Chile, and Trinidad and Tobago.
In this Hemisphere, Haiti is in the big leagues, but it is holding its own for an emerging market often written off as destitute.
One area where the nation is looking to become a key player is in mining. Research shows that Haiti’s northern region, regarded as the mineral belt, is rich in gold, copper, and other precious metals.
In fact, recent projections indicate that this untapped sector could yield upwards of $20 billion for the country with a population of about 10 million.
Four years after the devastating earthquake that further crippled Haiti’s fragile economy, could mining be the spark to jumpstart the economy?
Revisiting Mining Law
Over the last few years, mining in Haiti has garnered global interest, which has prompted local officials to revisit the country’s outdated mining laws, which have not been changed since 1976.
"The most important thing is to have the correct mining law. It ensures that the right portion comes to the state. It ensures that the people living in the region where the mines are, that their rights are protected. It ensures environmental protection," Prime Minister Laurent Lamothe said when he assumed his post.
The World Bank is working with the Haitian government to rewrite the regulations to increase government royalties from 2-5% to 9-12% and enact stricter environmental protections. Critics maintain that surface mining will damage soil and waterways and contend that mines will cause deforestation and erosion.
Many also want more assurances regarding how local residents will benefit from mining.
A grassroots group - the Collective Against Mining - is organizing communities who oppose mining. Last July they wrote, "We want a truly national law and international conventions that protect life, water, land, and the environment, and that outlaw mining which brings with it pollution, destruction, contamination, and more hunger.”
Regardless of what side you are on, it is clear that there is a lot at stake. Over the last few years, about $30 million has been spent by foreign investors on mining activities in Haiti, including exploratory drilling.
Two Companies Can Begin Mining
While a 2012 report by Haiti Grassroots Watch (HGW) noted that one-third of the northern region is already under research, exploration, or exploitation, currently only two companies have mining rights to begin drilling.
Two years ago, Haiti's government made history when it awarded permits to allow the two foreign companies to openly mine for gold and copper.
Societe Miniere Delta (SMD) is a subsidiary of an American company, VCS Mining. SOMINE S.A. is owned by Canadian mining company, Majescor.
‘‘It allows us to finally produce and make money, at least get to that step,’’ Majescor CEO Dan Hachey told the Associated Press after their permit was issued. ‘‘It’s also a great step forward for the mining industry in Haiti.’’
SMD has a strong infrastructure in place in Morne Bossa and is ready to set up its plant and start production. They assert that their technology, which is contained in a secure facility, will ensure no leakage or emission deposits. SMD also plans to reinvest portions of its profits back into the community by creating a residential and commercial area for local workers and residents.
Drilling Already Underway on the Island
There are many who are still skeptical about the viability of mining in Haiti. VCS President Angelo Viard, who is Haitian-American, points to the Dominican Republic (DR), Haiti’s neighbor on the same island, where drilling is already underway.
Companies have been extracting gold from DR for a while now with large margins.
Alexander Medina, DR’s director of the Mines and Energy Office, last year stated, “mining has made a very positive contribution to the Dominican Republic, creating jobs, supporting economic growth and providing income to the government.”
In September, DR issued a permit to drill for gold along the Haiti border at Dajabón province to a Canadian company that expects to strike a major deposit.
So the gold rush is not just speculation, though it is curious that the sector is not further along in Haiti.
Path to Mining in Haiti
Almost 50 years ago, a United Nations geological study of Haiti’s northeastern region conducted in the 1970’s documented the presence of copper and gold on the island – conclusive evidence of the economic opportunity.
When you consider nations, like Nigeria, where a gold mining boom has had fatal consequences, Haiti may be wise to take its time to establish sustainable infrastructure, set economic goals, and develop a strategic vision.
Haiti’s Bureau of Mines is working with a South African firm, Council of Geosciences, to map the country’s mineral resources and assess the economic value of reserves.
Ludner Remarais, Director General of the Bureau of Mines, recently said, “It is important that this sector is developed because it could help solve the problem of unemployment and assistantship."
A Directorate, a regulatory body, was just established to address key issues and leverage new technology to structure and manage a transparent mining cadaster. This bureau would process applications for mineral licenses and monitor compliance.
“By 2020 we want to see the emergence of Haiti. To achieve this, we are counting heavily on the contribution of the mining sector, which clearly has the potential to strengthen and diversify our economy,” Prime Minister Lamothe said during Haiti’s first mining forum last year.
Mining Haiti’s Business
There is no question that once mines are operational, on the ground investors from around the world will take another look at Haiti.
Mining presents tremendous opportunities to grow the private sector and expand Haiti’s advanced manufacturing capacity, thereby creating new jobs for Haitians.
Both gold and copper are recyclable, which maximizes their potential use to make other products. And they have unique properties to leverage in the creation of new technologies.
Gold continues to be a popular precious metal. In addition to jewelry making, it is used in electronics, computers, robotics, and space aeronautics. It is also sought after in dentistry and medicine.
Copper is used in plumbing and heating systems, roofing material for buildings, and for power generation and distribution.
Production is not Haiti’s only option. Exporting to global producers like South Africa, Australia, Brazil, China will also be profitable. This would provide a reliable revenue stream to augment the national budget and position the government to invest in workforce training, transportation infrastructure, energy innovations, and deliver much needed services to vulnerable populations.
The development of Haiti’s natural resources could be a catalyst for significant economic growth and increase the nation’s global competitiveness.
It is unlikely that Haiti will soon be among the richest nations in the Western Hemisphere as it once was. But its economy should not be overlooked as a viable option for long-term investors willing to take the type of risk that can yield high rewards.
[FOOTNOTE: HGW is a partnership of AlterPresse, the Society of the Animation of Social Communication (SAKS), the Network of Women Community Radio Broadcasters (REFRAKA), and others.]
Cleve Mesidor is a Global Solutions Specialist at The Raben Group. She recently spent six month in Haiti focusing on economic development. She also serves on the Board of Advisory Committee for VCS Mining. Follow Cleve on Twitter @cmesi & on Facebook at cmesi.