The Minister for Finance and Treasury, Hon Gordon Darcy Lilo, said today that the Government is serious about developing the mining sector to be a significant source of future growth and opportunity. He said, the Government is committed to ensure that the sector is properly managed so that fair rewards are achieved for the extraction of our non-renewable resources.
He also stated that in order for the sector to be managed properly,‘‘ the Government is committed to two new initiatives – developing a new resource tax framework and signing on to the Extractive Industries Transparency Initiative, known as EITI’’.
‘‘The Government appreciates that mining operations are extremely expensive, complex and risky businesses. In order to encourage mining companies to come and establish operations in Solomon Islands, miners need to know that the returns achieved by projects here will adequately compensate them for these expenses and risks. The new resources tax framework seeks to position Solomon Islands to do this by setting taxation rates for mining in this country to compare favourably with taxes applied to mining in other countries. By setting tax rates at a level that has succeeded in encouraging companies to invest in other countries, we ensure that Solomon Islands is not left behind in mining development’’.
He further announced that to complement the natural resource tax framework the Government has made a commitment to implement the Extractive Industries Transparency Initiative (EITI) to improve fiscal transparency and accountability within the mining sector.
“EITI is a global standard for promoting transparency and accountability in countries rich in oil, gas, and mineral resources. It provides a mechanism for reporting, reviewing and assessing what money is being paid by mining companies and what money is being received by governments.’’
The NCRA government will lead this initiative with the support of mining companies, civil society groups, investors and international organizations. It will generate publically available information to allow Solomon Islanders to see how much revenue is being generated and ensure that these funds are flowing to Government in an appropriate manner. Over the next few months the Government intends to take the final steps to achieve EITI candidacy and progress this important initiative.
Minister Lilo said that, “although the mining sector can contribute positively to the economy, the significant burden arising from the environmental damage caused by mining cannot be under estimated. It is critical that the mines regulator ensures that mining companies properly rectify damages caused when mines close”.
Landowners, government officials, donors and representatives of mining companies are meeting in Honiara this week to raise community awareness of the mining cycle and the mining industry. The forum will provide a way forward for mining in Solomon Islands through discussion and debate.
For more information on this press release contact Shadrach Fanega, Permanent Secretary, Ministry of Finance and Treasury on PH.