* North Andros residents, investors to hold land
* Symonette JV's application submitted to Gov't
* Proposing royalty rates of 25 cents per ton
By NEIL HARTNELL
Tribune Business Editor
North Andros residents and individual Bahamian investors will own 100 percent of the company that will hold some 5,200 acres targeted for an aggregate mining project, it was revealed yesterday.
Cameron Symonette, The Symonette Group’s chief executive, and his joint venture partner were said to have structured their proposal such that they will "never own the land" from which their Bahamas Materials Company Ltd vehicle will seek to extract calcium carbonate (limestone) for export to other Bahamian islands and internationally.
The development, which has been formally submitted to the Bahamas Investment Authority (BIA) and other government regulatory agencies in a bid to obtain the necessary approvals, is instead planning to create a separate entity, Morgan’s Bluff Development Ltd, to obtain a conditional purchase lease of the now-disused Water & Sewerage Corporation wellfield site in North Andros.
The proposed 40-year lease, Tribune Business was told, would give the developers sufficient long-term security and confidence to make the investment, but be balanced to ensure the Government could take back what is presently more than 5,000 acres of Crown Land should they fail to perform and live up to their obligations under any Heads of Agreement.
Rather than be handed the entire site at once, the project calls for Morgan's Bluff Development Ltd to receive Crown grants for 500 acres at a time. These parcels would then be sub-let to Bahamas Materials Company (Mr Symonette and his partner Ted Baker) for the limestone mining, with just two-thirds of the site understood to be earmarked for this activity.
Once the mining has finished, and the developer fulfilled its responsibilities, the Bahamian investor-owned Morgan's Bluff Development Ltd would then obtain fee simple ownership of that parcel in what is ultimately intended to be a land reclamation project.
It would then be able to develop this land, by itself or through joint venture opportunities and third-party investors, to the benefit of shareholders and the North Andros community via activities such as housing/real estate, tourism development, healthcare, agriculture and aquaculture.
The present intention is for Morgan's Bluff Development to be owned 49 percent by North Andros residents, with the remaining 51 percent stake floated to public investors and listed on the Bahamas International Securities Exchange (BISX) through an initial public offering (IPO).
Tribune Business was told that the IPO would target investment by small Bahamian retail investors, rather than large institutions, in much the same manner as the Arawak Port Development Company (APD) IPO and the plan to give locals a 49 percent stake in Nassau's new cruise port. This is designed to guard against the North Andros project becoming dominated by a few major investors.
"Morgan’s Bluff Development Group will be all owned by Bahamians," one source familiar with the project, speaking on condition of anonymity, told this newspaper. "Bahamas Materials Company will never actually own the land. Ever. It is designed so that the ultimate benefit is not going to be vested in the developer.
"It will be broad ownership. What they [the developers] are interested in doing is financing the purchase of shares for North Androsians. If North Androsians are on the register of voters, they can go to the [company's] office in Nicholls Town and the shares will be financed by the developers. The only thing they will have to pay is a $100 administrative fee
"The idea is to create generational wealth. What's going to be interesting about this is it will be the first public offering of a direct concession gifted from the Government of The Bahamas to the citizenry since commonage land. This is the first time in the history of The Bahamas for 100 years where direct benefits will be granted to Bahamians by way of land concessions."
Messrs Symonette and Baker, and their team, are understood to have spent significant time in Andros in recent weeks consulting with local residents via group meetings and one-on-one chats to obtain feedback on the proposed project and understand what benefits locals wish to obtain from investment projects.
The consultations were said to have sparked a mixed reaction, with many Androsians said to be in favour of the project's concept and structure, while those opposed have already taken to social media to vent their concerns and unhappiness.
The Bahamas' natural resources, their exploitation and who should benefit has aroused significant controversy in recent weeks, and the developers - through Bahamas Materials Company - are planning to export the mined limestone to both other Bahamian islands and the US for use in the construction industry. Concessionary prices will be offered on Andros.
The developers are understood to be targeting annual exports of between 1m to 3m tons of limestone, a volume that would make The Bahamas a net exporter of this product while providing a new source of foreign currency earnings and economic diversification - two features that have assumed increased importance due to the COVID-19 pandemic.
Well-placed sources said they are also proposing to pay the Government a royalty fee on the exported limestone equivalent to $0.25 per ton, a figure they argued compares favourably with - and even exceeds - similar levies paid in Florida, which was used as the benchmark for this rate.
Another contact, speaking on condition of anonymity, said Bahamas Materials Company's investment could ultimately reach the $150m level with some 150 jobs created "out of the gate".
Suggesting that salaries would be 40 percent higher than the tourism industry equivalent, they added that the projected $45m economic impact over the first decade would have a major impact in a small 4,400-strong community where - according to the Andros sustainable development plan produced in 2017 - around 60 percent of persons living in the island's north lack full-time sustainable employment.
"It's a huge impact," the source said. "The 150 jobs they will create can almost entirely be filled by Andros residents and those who have left for Nassau. We can bring them back." Tribune Business understands that the developers plan to create 40 jobs almost immediately, ramping this up to 100 in the fourth year, with 67 employees required for the mining operation alone.
"They're not seeking exclusive use of the Morgan's Bluff dock," the source added, referring to the former Water & Sewerage Corporation facility. "They need to use it like everyone else, and want to make improvements to it and let everyone use it." And an entity called the North Andros Foundation, funded by the developers, will be used to take care of community issues.
This newspaper understands, though, that Bahamas Materials Company's plans to mine for limestone in the wellfields is being opposed by the Water & Sewerage Corporation, which is resisting bore-hole drilling and other testing that would confirm whether they have been contaminated by salt water intrusion relating to hurricanes. Adrian Gibson, its executive chairman, declined to comment when contacted by this newspaper.
Mr Symonette’s partner, Mr Baker, is founder and chief executive of US-based Blue Water Industries, a construction materials supplier billed as emerging into “one of the top five privately-held aggregate suppliers” having been founded in 2018.
Mr Baker, whose family have been involved in the aggregates industry since 1929, previously sold another industry venture, Bluegrass Materials Company, to industry giant Martin Marietta for $1.625bn in 2018 after just eight years in existence. He will provide the mining and production expertise, and develop a customer base and market access for the business in Florida.