SVG set to earn around $900,000 annually from quarry

This country’s government stands to make approximately $900,000 in throughput annually and a little over $27 million over the next three decades, given the estimated life expectancy of quarry operations being established at Richmond and the sales plan outlined in signed agreements.

An agreement was signed between Rayneau Group of Companies and the government of St Vincent and the Grenadines (SVG) on April 8, 2021, for the company to operate a stone quarry in the North Leeward area for the next 30 years.

A lease agreement was also signed between both parties on April 9, 2021.

Under the agreement, the government is entitled to $12,000 annually for almost 59 acres of lands being leased for the operations, and $2 for every tonne of material exported by Rayneau.

The lease agreement estimates that 500,000 tonnes of aggregate can be extracted from the site yearly.

Though the signed agreement is valid for the next three decades, the life span of the Richmond quarry is estimated at 40 years.

And according to a sales plan in the agreement signed between the government and Rayneau last April, export customers account for 91 per cent of the target market.

These include all neighbouring islands with limited resources and high demand for aggregate.

Meanwhile, civil engineers, building construction companies and standard customers account for 5 per cent, 3 per cent and 1 per cent of the target market respectively.

According to the plan, civil engineers refer to companies that work hand in hand with the government and specialise in road construction projects, railways development and other complex structural developments.

Building construction companies are formal contractors specialising in structural developments like constructing shopping centres, halls and recreation facilities.

And standard customers are formal contractors who take up small building projects, mostly dealing with individual customers who want services like driveways and small to medium houses.

Given the estimated target market for export, the government will likely receive approximately $910,000 annually and just over $27.3 million in throughput over the agreed 30-year period.

However, the agreement between both parties outlines that Rayneau and the government will review the throughput fee of $2 per tonne after seven years.

Rayneau Gajadhar, managing director of Rayneau Group of Companies recently told a local media entity that only one per cent of the stones from the quarry will be for local consumption while the remaining 99 per cent will be exported.

But both Prime Minister, Dr Ralph Gonsalves and Senator Julian Francis, the Minister of Urban Development and a former minister of Transport and Works have said publicly that this is not the case, as there is a condition that exports will always be subject to local demand.

Francis, who was speaking at a press conference regarding the quarry on February 11, also referenced major construction projects earmarked to take place locally and said SVG will get what aggregate is necessary for construction and the remainder will be exported.