Glencore’s Dominican mine in limbo after national park plan approved
Glencore’s (LON:GLEN) 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.
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.
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.
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