- Thread starter AlterEgo
- Start date
Barrick Gold's effect on DR Environment - important video!
There are numerous gold mines in Canada and some have been stopped due to environmental concerns. All Canadian mining companies have to go through a number of layers of environmental reviews along with clean-up and remedial action plans, containment of contamination....etc. Every country has a government that sets the rules that companies have to play by. Most countries honour the contracts. Both the company and the Dominican government went in to a signed a contract that is clear and binding. It is the Dominican government job to verify clean up, and I've talked to several engineers involved in it and they were clear on what they were doing. Gold mining is messy and expensive work and since Barrick is taking the risk and making the investment should they not be entitled to reward. It has nothing to do with me being Canadian, its about honouring the contract you signed.
If the Dominican Constitution means nothing to the Governments, and can be changed to suit the needs of the politicians by their votes, and NOT by the citizens, then what makes anyone believe they would honor a binding contract????
I sure don't!!!!!!!!!!!!!!!!!!!!!
Even the whores I deal with have more integrity than that!
And I'm screwing them, not visa versa.
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I sure don't!!!!!!!!!!!!!!!!!!!!!
Even the whores I deal with have more integrity than that!
And I'm screwing them, not visa versa.
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I'm not opposed to BG getting a return on their investment, but such an onerous return I think anyone with some decency would know the only way they got this contract was by paying off tons of money under the table. Let's be honest here BG is not a company with any sort of integrity. This is a company that's constantly getting sued all over the world for their practices. So while I'm not FOR breaking a contract I also wouldn't shed a tear for BG if they were made to pay a fairer share.
Unfortunately this is all BS as we all know what's really going to happen is that BG will pay off a few more people, the contract will remain as is or some very minor "concessions" will be made, some people will protest and a few poor folks will get shot and probably killed by the military apparatus defending this atrocity (as its already happened) and in the end us Cotui folks will get the shaft sans lube and will be left with pollution for generations...
I wonder if the paying off bribes constitutes grounds for a contract to be void?
If one could prove that bribes were paid Barrick could be punished under Canadian law and don't forget 40% of this project is Goldcorp. Your fear may or may not be justified. Pouring several billion in to a project is not chickfeed and constitutes a lot of rish, especially if the price was gold plummets.
There was literally no risk for BG on this. Remember that according to the contract BG doesn't have to give the DR a penny back until they have recouped ALL of their investments (again a very vague statement...what constitutes ALL of their investments?) and they make at least 10% NET profits a year...THEN and only then will The DR government see any money...so in theory it is quite possible The DR does not ever see any money. BG could be making (according to their accounting) 9.99% net profits every year, meaning they don't have to pay The DR anything. Not to mention that when the contract was signed for purpose of the contract the ounce of gold was valued at 400 USD and change...
If the DR government was smart they wouldn't revise the contract and find a different way to make BG pay (i.e. tax the heck out of mining gross profits...I think a 50% rate would be fair).
No country can "TAX" it's way to prosperity!
That takes an honest government, and a productive,educated, and trained work force.
High corporate tax rates is a big reason many companies left the USA.
What effect do you think imposing a 50% tax on Barrick,AFTER signing a mutually agreeded upon contract,signed by BOTH parties, would have on additional companies investing in the DR????
The DR Government never ceases to come up with ideas, like screwing international investors, including "Ex-Pats", who purchase real estate and pay taxes, and employ locals,by "inventing" ill conceived ideas about increasing revenue, which they then steal!
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That takes an honest government, and a productive,educated, and trained work force.
High corporate tax rates is a big reason many companies left the USA.
What effect do you think imposing a 50% tax on Barrick,AFTER signing a mutually agreeded upon contract,signed by BOTH parties, would have on additional companies investing in the DR????
The DR Government never ceases to come up with ideas, like screwing international investors, including "Ex-Pats", who purchase real estate and pay taxes, and employ locals,by "inventing" ill conceived ideas about increasing revenue, which they then steal!
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There is actually a huge risk for them. There is a risk that the project may be technically more challenging than originally thought. FOr example, maybe the actual gold recovery is lower than assumed or the operating costs are twice what originally assume, or greedy labor unions cause production to halt for weeks. Now, tell me there is very little risk for investing $4bn. The disaster created by the Dominicans will be remediated. Some of the remediation will probably be by re-treating material previously treated by Rosario and using previously contaminated water in their process. O.
Good points.
If the DR gubmint screws BG it will set a precedent that will cause other potential foreign investors to have pause before pulling the trigger.
The horses have left the barn.
so, tell us, bob, is the cleanup cost included in the investment costs that Barrick will be able to recoup in full before the DR government begins to receive a share of the proceeds from the mining operations?
Beats me I haven't read the contract. I however am an investor in GoldCorp which owns a portion. How can you do cleanup before the operation is finished? I'm sure the company has figured out (ballpark) the remedial costs.
Full two page description, by Barrick, in the papers today.
They say they spent 75 million dollars in clean up costs before they began their work.
They cleaned up the "MESS" left from the previous failed mining attempts.
They also tell their side of the recent lies spread by the DR Gov. hoping to force a renegotiation of the contract.
I agree with Suaren, Barrick will make the payoffs to gov. officials to make everything go away.
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They say they spent 75 million dollars in clean up costs before they began their work.
They cleaned up the "MESS" left from the previous failed mining attempts.
They also tell their side of the recent lies spread by the DR Gov. hoping to force a renegotiation of the contract.
I agree with Suaren, Barrick will make the payoffs to gov. officials to make everything go away.
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go read CC's response, and you will see where he mentions a 75 million dollar expenditure to cleanup the mess left by the prior tenants. ok?
That clean up is completed and yes that is part of the expentitures they get to count against profit. They still have to do a cleanup and land redemption at the end of the life of the mine- clear enough for you?
NO...you don't get it. There is NO risk when the contract states that you'll recoup 100% of investments plus have at least 10% net profit BEFORE you have to pay a dime back AND the amount of proven reserves in both gold and other metals in these mines is so much that even if their actual gold recovery is a fraction of what's intended they will still get enough to recoup that investment in no time.
Think about it for a moment...they said they have invested 4 billion USD (I don't quite believe it, but whatever...who's checking)...current gold prices stand at about 1650 an ounce., meaning to recoup that investment all they need is to get out about 2.5 million ounces (Let's say 4 million to be conservative and take care of any ongoing operating costs) - Cost of extracting an ounce of gold has been estimates at about 275 USD per ounce. Do you know that the PROVEN reserves have been estimated to be more than 25 million ounces of gold, not to mention more than 400 million pounds of copper and almost 120 ounces of silver - We all know these estimates are very conservative - and they have 30 YEARS to extract these minerals...how is that for any risk?
The one good thing that's going to come out of this is that hopefully subsequent contracts - There's still a lot of gold and other minerals left in The DR in addition to Pueblo Viejo (i.e. Loma de Miranda) - will be reviewed in much more details and won't be signed just giving everything away for next to nothing. At least people are starting to understand...
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LOL. I am sure there are things you think you understand. We all have strengths and weaknesses, your's just happen to be the same, your ego.
First I would like to say that Barrick should have given more of the profits to the Dominican but the fact is they didn’t and the contract is binding. The gov’t has to bite the bullet and settle with the 300-400million or more a year for the next 25 years. </SPAN>
That said, I want to defend Barrick a little here. First off Suarezen, Im sorry that this is happening in your back yard but it has to happen in somebodies. However, you are wrong when you say there is no risk. There is always risk in mining and exploration. First of all, the reserves they are talking about are not all proven. A percentage of those reserves are only probable. There is no guarantee that the quality or density of those reserves will surmount to the estimated profits. Companies have to show the numbers of proven and probable reserves in order to attain the rights to mine this also increases stock value so the higher the better. Underestimating would be counter-productive. </SPAN>
Second as noted by CC there is a political risk which is exactly what Barrick is facing now. If a new contract is signed they lose stock value and profits, possibly even the contract and all the money they have invested. I have witnessed politics completely shut down operations and seen major oil companies lose billion dollar contracts and 100’s of millions in investment. While working in Mexico the govt signed a contract with an oil company to drill and produce nearly a 1000 wells. However, before they would pay the company they had to put the wells into production. At this point the government refused to give explosion permits for the company to perforate the wells and put them into production thus avoiding payment. </SPAN>
I am currently witnessing local labour cost major companies millions of dollars over in Africa. The locals have gone on strike demanding equal wages to that of the expats. A completely unreasonable demand considering the labour force is unskilled nor does it reflect a fair wage compared to the rest of their own country. The final financial effects of these strikes has yet to be seen.</SPAN>
Im not saying that Barrick has not done anything wrong. Im just saying, that in a way, the Dominican government and the people should feel a little lucky that a company like Barrick is doing this work. They are not the biggest gold mining company in the world for nothing. They bring the latest technology and from my experience Canadian companies have higher than average standards then most of the world. Their safety records are at the top and environmental care is always a top consideration. They do this because they have to. They are held accountable by their share holders and to International Finance Corporation who lent them the money. Job related injuries, environmental contamination and disasters cost companies millions sometimes billions of dollars (BP oil spill) so it’s in their bottom line interests to ensure higher standards are met. It doesn’t matter where in the world I work anymore safety and environment are put as high priority compared to 20 years ago. If it isn't Barrick it would be someone else, and who is to say the other company would or will be any better. </SPAN>
Until the world shuts down the demand for natural resources and minerals these things will always be an issue. Lobbyist groups help to act as a check and balance to ensure the companies follow the rules and I whole heartedly agree with them. We can all do our own part to keep these companies (not just resource companies, Coke, Nike, etc..are aslo guilty of exploitation) in check. If you still feel like they are the greatest evil then stop using their products! However, when a government tries to manipulate the people to renege on a contract something is terribly wrong . As mentioned before it would also be a huge detriment to future foreign investment of any kind to the Dominican Republic. </SPAN>
That said, I want to defend Barrick a little here. First off Suarezen, Im sorry that this is happening in your back yard but it has to happen in somebodies. However, you are wrong when you say there is no risk. There is always risk in mining and exploration. First of all, the reserves they are talking about are not all proven. A percentage of those reserves are only probable. There is no guarantee that the quality or density of those reserves will surmount to the estimated profits. Companies have to show the numbers of proven and probable reserves in order to attain the rights to mine this also increases stock value so the higher the better. Underestimating would be counter-productive. </SPAN>
Second as noted by CC there is a political risk which is exactly what Barrick is facing now. If a new contract is signed they lose stock value and profits, possibly even the contract and all the money they have invested. I have witnessed politics completely shut down operations and seen major oil companies lose billion dollar contracts and 100’s of millions in investment. While working in Mexico the govt signed a contract with an oil company to drill and produce nearly a 1000 wells. However, before they would pay the company they had to put the wells into production. At this point the government refused to give explosion permits for the company to perforate the wells and put them into production thus avoiding payment. </SPAN>
I am currently witnessing local labour cost major companies millions of dollars over in Africa. The locals have gone on strike demanding equal wages to that of the expats. A completely unreasonable demand considering the labour force is unskilled nor does it reflect a fair wage compared to the rest of their own country. The final financial effects of these strikes has yet to be seen.</SPAN>
Im not saying that Barrick has not done anything wrong. Im just saying, that in a way, the Dominican government and the people should feel a little lucky that a company like Barrick is doing this work. They are not the biggest gold mining company in the world for nothing. They bring the latest technology and from my experience Canadian companies have higher than average standards then most of the world. Their safety records are at the top and environmental care is always a top consideration. They do this because they have to. They are held accountable by their share holders and to International Finance Corporation who lent them the money. Job related injuries, environmental contamination and disasters cost companies millions sometimes billions of dollars (BP oil spill) so it’s in their bottom line interests to ensure higher standards are met. It doesn’t matter where in the world I work anymore safety and environment are put as high priority compared to 20 years ago. If it isn't Barrick it would be someone else, and who is to say the other company would or will be any better. </SPAN>
Until the world shuts down the demand for natural resources and minerals these things will always be an issue. Lobbyist groups help to act as a check and balance to ensure the companies follow the rules and I whole heartedly agree with them. We can all do our own part to keep these companies (not just resource companies, Coke, Nike, etc..are aslo guilty of exploitation) in check. If you still feel like they are the greatest evil then stop using their products! However, when a government tries to manipulate the people to renege on a contract something is terribly wrong . As mentioned before it would also be a huge detriment to future foreign investment of any kind to the Dominican Republic. </SPAN>
It is difficult, and maybe impossible, for a Dominican to grasp the long range consequences of their decisions.
They WILL, "Cut Off Their Noses To Spite Their Faces", over and over again, as they do not learn from their mistakes either.
Believe me, they would shut down "Barrick Gold", and leave the gold in the ground if they want to "Teach Barrick A LESSON"!!!!!
Their GREED is more important to them than their reputation.
They should be more upset about the rape of the "Bahia de Agillas" than "Barrick Gold"!!!
But there's more money to be stolen at "Barrick".
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They WILL, "Cut Off Their Noses To Spite Their Faces", over and over again, as they do not learn from their mistakes either.
Believe me, they would shut down "Barrick Gold", and leave the gold in the ground if they want to "Teach Barrick A LESSON"!!!!!
Their GREED is more important to them than their reputation.
They should be more upset about the rape of the "Bahia de Agillas" than "Barrick Gold"!!!
But there's more money to be stolen at "Barrick".
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