DOMINICAN REPUBLIC

DOMINICAN REPUBLIC

Canadian company says huge Dominican mine hinges on costly cleanup

The Associated Press

28th August 2007

LOS CACAOS: Barrick Gold Corp.'s decision to proceed with digging one of the Western Hemisphere's largest gold mines depends on the Dominican government helping clean up the pollution it left for miles around the site, the company's chief executive said Tuesday. The Dominican government, which mined the Pueblo Viejo area for two decades until it halted operations in 1999, must bear at least part of the responsibility for a cleanup estimated to cost at least US$100 million, said Greg Wilkins, Barrick Gold's president and CEO.

Wilkins, whose company took over the Pueblo Viejo mining rights in 2006, is confident Barrick and the government can agree on how to pay for the cleanup by February, when the Toronto-based mining giant said it must decide whether to proceed. "We're very optimistic that we're going to be in a position to ... go ahead with the development of the project," Wilkins told The Associated Press in a telephone interview.

Acid-filled rivers and fields of mineral waste that have hardened the lives of thousands of nearby villagers must be contained before Barrick can begin mining an estimated 18 million ounces (513 million grams) of gold from Pueblo Viejo, a site in the heavily forested mountains of the central Dominican Republic. Barrick plans to invest more than US$2 billion (¤1.5 billion) in reopening the mine. That sum, which includes a 40 percent stake by Vancouver-based Goldcorp Inc., would be one of the largest foreign direct investments in the history of the Caribbean country.

Eight years after the state-run Rosario Dominicano company shuttered Pueblo Viejo, its two mining pits remain exposed. Acid run-off flows down the mountain, pooling in red ditches along abandoned roads while sprawling fields of mineral waste lie under barren rainwater lakes. The narrow Margajita River is now a reddish-brown trickle of acid that has killed the fish and forces the people of tiny Los Cacaos to travel more than 6 miles (10 kilometers) for safe drinking water. "They came making promises. And you know what we got? Poison," said Jesus Maria Pagardo, 71, a local farmer.

Even with Barrick planning to help with the cleanup costs, the government will have to borrow money from international lenders to meet its share of the price tag, said Jose Angel Rodriguez, the mining ministry's official overseeing Pueblo Viejo. Nonetheless, the government is also confident that the project will go forward, Rodriguez said.

Barrick, the world's largest gold producer, is expanding its push around the world as gold prices soar, with gold for December delivery at US$676.20 (¤495) on Monday at the New York Mercantile Exchange. But the company itself faces criticism from the conservation group Greenpeace and others for the environmental impact of projects like its Pascua-Lama mine on the Chile-Agentina border.

Barrick has lobbied people in the Dominican Republic to support the project, promising jobs and to run the mine better than the government. The company has also pledged to compensate the estimated 1,000 people who will lose property or be relocated because of the project.