Denver — The election of Hipolito Mejia as president of the Dominican Republic May 2000 seems to be having a positive effect on the country’s mining industry.
The government recently created an agency called Unidad Cooperativa Minera (UCM), aimed at encouraging investment in mining. The agency is part of an overall program designed to invigorate the DR’s damaged economy.
The UCM has auctioned-off of four mining concessions across the country, including a 54-sq.-km land package adjacent to the giant Pueblo Viejo gold mine. The winning bidder,
Part of the UCM’s mandate is the privatization of Pueblo Viejo, and calls for tender offers have been extended until June 30.
Pueblo Viejo has a long and checkered history. It was opened in 1975 by Rosario Dominicana, a subsidiary of Amax, and was nationalized four years later.
Oxide reserves were exhausted by 1990, following production of more than 5 million oz. gold and 21 million oz. silver. However, operators persevered, trying to put sulphide material through the oxide circuit, but their efforts failed, ultimately resulting in the mine’s closure.
Pueblo Viejo still contains significant gold resources — reportedly more than 30 million oz. gold and 200 million oz. silver, grading at least 2 grams gold per tonne. Even the sulphide tailings represent a significant resource.
The deposit was once considered a maar-diatreme deposit. However, owing to elevated base metals associated with precious metals mineralization, geologists now believe it to be a hybrid between a high-sulphidation epithermal system and a volcanogenic massive sulphide, hosted in a Cretaceous-aged dacitic dome complex.
Following the mine’s closure, attempts by the industry to reopen and re-privatize the operation were blocked by the government of Joaquin Balaguer, whose terms as president include 1966-1978, 1986-1994 and 1994-1996.
In 1996, a new mood took hold with the election of President Leonel Fernandez, a centre-left politician committed to privatization. The economy has grown in part due to a stronger legal framework and increased foreign investment. Although presidents are now forbidden from serving consecutive 4-year terms, Mejia would appear to be building on the reconstruction efforts of the Fernandez government.
Beginning in 2004, the mining industry is expected to contribute 5% to the gross domestic product, says UCM director Miguel Pena. Currently, it contributes only 1.4%, chiefly from from the Bonoa nickel complex, operated by
The government has committed US$100 million toward building and upgrading mining-related infrastructure, including a new port facility.
At the moment,
Energold and Impact recently signed a joint-venture agreement with a private company, Exploration & Discovery Latin America (E&D), to explore several concessions. E&D will spend US$150,000 over six months for the right to select up to 30 sq. km for further work. Over the next two years, E&D can earn a 51% interest in return for exploration expenditures.
Energold and Impact own, or hold through option, 89 sq. km across the island country. Properties include San Antonio I, Longyear and El Brugo.
The UCM says it is also committed to promoting industrial minerals, including marble, salt, gypsum and silica.
The DR is situated in the West Indies and takes up the eastern two-thirds of the island of Hispaniola, which it shares with Haiti. The total area of the DR is 48,442 sq. km.
Crossed from the northwest to southeast by a mountain range with elevations exceeding 3,000 metres, the country has fertile, well-watered land in the north and east, where nearly two-thirds of the population lives. The southwest part is arid and has poor soil, except around Santo Domingo, the capital and largest city.
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