Glencore's Dominican ferronickel mine in doubt
Published by MAC on 2014-09-01Source: Bloomberg, Mining.com
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Glencore Xstrata's Dominican ferronickel mine in doubt
Bill Faries
Bloomberg
29 August 2014
The future of Glencore Plc's shuttered ferro-nickel mine in the Dominican Republic was cast into doubt after passage of legislation declaring the region surrounding the mine a national park.
The Senate approved a measure yesterday creating a protected area at Loma Miranda, home to the Falcondo mine. Glencore, led by billionaire Chief Executive Officer Ivan Glasenberg, called for "rationality" in decision-making on the mine's future, the Baar, Switzerland-based company's local unit said in a statement today.
The cost of permits to operate the mine will rise if the national park legislation is signed into law by President Danilo Medina. Affected landowners will be compensated, according to the bill. The mine, which Glencore acquired in 1956, contains 19.3 million tons of minerals.
"With operations at Loma Miranda, the Dominican economy would receive some $5.7 billion during the next 20 years," according to the statement. "Where will those resources come from now?"
The Caribbean nation's government has clashed with mining companies in recent years over royalties and environmental regulations. Dominican customs agents held up shipments from Barrick Gold Corp.'s $4 billion Pueblo Viejo mine last year after Medina called the company's concession "unacceptable." Glencore temporarily shuttered the Falcondo mine last year due to low global nickel prices.
Glencore fell 1.7 percent to 360.5 pence at the close in London. The shares have gained 18 percent this year.
Climate Change
National park status is required to protect biodiversity and mitigate the impact of climate change, according to the Senate legislation. Glencore, which acquired the mine in 1956, says it represents a fraction of the Loma Miranda region.
The United Nations Development Programme last year said the company's environmental study of the site was incomplete and that operations should be reconsidered. Glencore says it has operated the mine responsibly.
Sharing the island of Hispaniola with Haiti, the Dominican Republic's $61 billion economy is the Caribbean's biggest after Cuba. Gross domestic product is forecast to expand 4.5 percent this year, up from 4.1 percent in 2013, according to the International Monetary Fund.
The country ranked 117th out of 189 economies in overall business conditions according to the World Bank's annual "Doing Business" report, which weighs factors such as obtaining construction permits and securing electricity supplies.
--With assistance from Will Kennedy in London.
Glencore's Dominican mine in limbo after national park plan approved
Cecilia Jamasmie
Mining.com
29 August 2014
Glencore had said that its ability to expand would be a deciding factor in its decision to stay in the Dominican Republic.
Glencore's ferro-nickel Falcondo mine's fate in the Dominican Republic is more uncertain than ever as the country's legislators approved this week a ruling that declares the region surrounding the mine a national park.
The company, which halted operations at the mine in October last year due to falling nickel prices, warned Friday that Falcondo has only a few years left, and that a park creation will hinder any plans to expanding the mine, EFE news agency reports (in Spanish).
The global mining and commodities trading giant called authorities to apply "rationality" when deciding on issues affecting the mine's future, adding that seizing the property would violate the Dominican constitution and "set a bad precedent" for the country, Noticias Sin reports (in Spanish). The ruling still needs the Presidential approval.
Glencore's Dominican mine in limbo after national park plan approved
Dominicans marched this week to press President Danilo Medina to ratify the Senate's decision of making Loma Miranda a national park.
The firm's plans to grow the mine received a setback earlier last year when the United Nations Development Program (UNDP) rejected an environmental impact study as "incomplete."
A UN panel also said the project would endanger water supplies, wildlife and wetlands.
On top of that, the mine in Loma Miranda, less than 100 km north of the capital Santo Domingo, has been the focus of relentless environmental protests for years.
Glencore has mined for nickel in the area through the now absorbed Canadian Falconbridge since 1971, and was seeking permits to expand its operations on about 3,400 acres (1,380 hectares) near the town of Bonao.
A lawyer for the mine has said in the past that the government would have to pay around $4 billion in compensation if it declares the area a national park.
Dispute
This is not the first time the Caribbean nation's government clashes with mining companies in recent years over royalties and environmental regulations. Dominican customs agents held up shipments from Barrick Gold's (TSX, NYSE:ABX) $4 billion Pueblo Viejo mine last year after President Danilo Medina called the company's concession "unacceptable."
According to data published by the Dominican Republic's geology society (Sodogeo), the Caribbean nation is sitting on nearly $58 billion of unexplored reserves of minerals and metals.
Based on the entity's calculations, the underground hidden treasure trove comprises about 27 million ounces of gold, 168 million ounces of silver, 652 million pounds of copper, 6 billion pounds of zinc and 25 million pounds of nickel.
Glencore's Dominican mine saved by the President
Cecilia Jamasmie
Mining.com
3 September 2014
The Falcondo mine is located in the forested Loma Miranda mountains, less than 100 km north of the capital Santo Domingo.
A proposal to create a new national park that would have blocked the expansion of Glencore's (LON:GLEN) ferro-nickel Falcondo mine in the forested mountains of the central Dominican Republic was vetoed Tuesday night by President Danilo Medina.
El Periódico reports (in Spanish) that the authority sent the ruling back to the Senate, saying he had "serious doubts" about the constitutionality of such decision, as it does not respect the country's mining law nor takes into account international treaties signed by the Dominican Republic.
Medina also said there is no scientific prove that the mine expansion would damage the area, covering about 16 square miles.
However, the President noted his veto did not mean he has approved the project, which he said would only be authorized after the company completes "all the required environmental impact studies."
Glencore has mined for nickel in the area through the now absorbed Canadian Falconbridge since 1971, and was seeking permits to expand its operations on about 3,400 acres (1,380 hectares) near the town of Bonao.
Billions in compensation
A lawyer for the mine has said in the past that the government would have had to pay around $4 billion in compensation had the President declared the area a national park.
The project in Loma Miranda, less than 100 km north of the capital Santo Domingo, has been the focus of relentless environmental protests for years.
The firm's plans to expand Falcondo received a setback earlier last year when the United Nations Development Program (UNDP) rejected an environmental impact study, qualifying it as "incomplete."
A UN panel also said the project would endanger water supplies, wildlife and wetlands.
Both the Senate and Chamber of Deputies passed the bill last month by wide margins amid a combination of environmental concerns and fears that multinational mining companies may be benefiting more than the public from the country's natural resources.