Barrick ad campaign counters Dominican criticism – by Joachim Bamrud (MiningWeekly.com – February 12, 2013)

http://www.miningweekly.com/page/americas-home

SANTO DOMINGO (miningweekly.com) – Canada-based Barrick Gold has started a media campaign in the Dominican Republic to counter often repeated, but false, statements about its 2009 contract to develop the $4-billion Pueblo Viejo gold mine.

Pueblo Viejo, which is 60% owned by operator Barrick and 40% by Canada-based Goldcorp, is the largest foreign investment in the Dominican Republic. It started production in January and is expected to account for as much as 15% of Dominican exports over the next decade.

However, during the past two weeks Dominican legislators – including from the ruling PLD party – have requested that the contract be revised as a result of the increase in international gold prices since the contract was negotiated.

“We expect their executives to make a move so that the government and Barrick examine the contract [and] that they sit with the government to find a solution that benefits the country,” Abel Martinez, the head of the Dominican congress, said last week. “But this revision is urgent and the Chamber of Deputies has made the firm decision to act in this regard.”

Alexander Medina, the head of the government’s mining agency, last week also joined the ranks of those demanding a contract revision.

The increased calls for a revised contract come as Dominican President Danilo Medina is struggling with a record public deficit due to overspending by his predecessor last year and a refusal to make any significant cuts in public spending this year, opting instead for an unpopular tax increase that went into force in January.

The same day Barrick started its media campaign, an official claimed that the Dominican Republic was only receiving “a pittance for the mining exploitation.” Federico Antun Battle, who heads the government development bank for production and housing, told Color Vision TV that the government should not give away its natural resources to foreign companies.

However, in the ad that appeared February 11, Barrick clearly states that the Dominican government will receive 50% of the mine’s benefits. Barrick and Goldcorp will pay the Dominican government a 3.2% royalty, 25% corporate tax and 28.75% of the net profits.

For the rest of this article, please go to the MiningWeekly.com website: http://www.miningweekly.com/article/barrick-ad-campaign-counters-dominican-criticism-2013-02-12

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