New report says civil unrest threatens Dominican Republic mining

Carlos Cardenas, Deputy Head of Latin America Forecasting for Exclusive Analysis, a UK-based risk consultancy with 1,200 analysts spread across the globe, said on Thursday environmental protests are increasingly likely to cause delays and increase contract cancellation risks to nickel and gold mining in the Dominican Republic.

“On 11 November 2012, Congressman Adriano Sánchez Roa, of the ruling PLD Party, criticized the award of a licence to Canadian mining firm Unigold, claiming it would threaten environmentally protected areas, particularly the Manolo Tavárez Justo National Park.

“The criticism comes at a time of increasing anti-mining protests. On 1 October, the La Vega provincial court ordered the suspension of Xstrata subsidiary, Xstrata Nickel Falcondo’s Loma Miranda project and granted third-party access to the site. The project is opposed by locals and NGOs, including the Padre Rogelio Foundation, on environmental grounds and local landowners such as former Governor Chestaro and Senator Félix Nova. On 19 October 2012, Xstrata confirmed it would challenge the judgement.

“There have been protests outside the Loma Miranda site in La Vega and between September and November 2012, opponents of the project have demonstrated outside the presidential palace, foreign mining companies’ offices and the Canadian Embassy in Santo Domingo.

“Protests against the Pueblo Viejo project have led to violence. Between 28 September and 5 October 2012, violence broke out at the mine and fires were set in streets of nearby Cotui. Twenty protestors were injured during confrontations with the police. The protests at Pueblo Viejo are primarily focused on demands for local spending and jobs for local residents.

“The government has reiterated its commitment to mining development.

“A 12 November 2012 statement from Environment Minister Gomez emphasised that future development was advantageous to the country. However, the protests have led the government to request a UN Development Programme assessment of Loma Miranda before issuing further official statements. In 2010, an UN Development Programme assessment of a cement plant project resulted in its cancellation.

“The strengthening of environmental groups, backed by foreign NGOs, means that mining firms are increasingly likely to be targeted with civil unrest and court action. This increases the risk of project delays, but also of licence cancellation, particularly if demonstrations turn violent.”

*A previous version of this post stated Unigold’s licence had been rejected, which is incorrect. The congressman merely criticized the licence. regrets the error

Image of members of the Dominican Republic Defence Force Marines apply practical application on handcuff procedures. Photo by Exercise Tradewinds 2009 from Flickr creative commons.