In his State of the Nation speech yesterday, Wednesday 27 February, President Danilo Medina called on the executives of Canadian mining company Barrick Gold to agree for a review of the financial details of the contract they have with the Dominican State, saying that the current income distribution is unacceptable in light of the increase in the price of gold.
“For every US$100 of gold exports, Barrick will receive US$97 and the Dominican people US$3,” Medina said. “That is simply unacceptable.”
He said that renegotiation efforts have been unsuccessful so far.
He went on to say that if Barrick maintains its intransigent stance, the government would back legislation to raise taxes on mining companies. He justified that the income raised would be used for social investment and the fight against poverty.
He concluded by saying that the gold that was in the ground belonged to the Dominican people and the homeland of Duarte, Sanchez, Mella and Luperon, and no one else.
The Pueblo Viejo mine, located 60 miles (97 kilometers) north of the capital is forecast to produce as much as one million ounces of gold next year with commercial sales that may reach US$2 billion, Trade and Industry Minister Jose Del Castillo Savinon said in a December interview.
In his highly critical words on the contract with Barrick Gold that was passed by the National Congress to replace the Placer Dome contract previously in effect, Medina said: “Never in the history of humanity has there been a case when a mining company has been able to recover their investment in such a short time, while the home country of the investment would be receiving crumbs during those first years.”
In a Twitter comment in reaction to the enthusiastic applause from the legislators to his stand, the Dominican Association Against Corruption, Adocco, pointed out the irony that these were practically the same legislators who had approved the contract in the first place. There have been legislators who have admitted to not reading the contract. The ruling PLD party held and still holds the majority in the Senate and Chamber of Deputies.
The previous government under President Leonel Fernandez was characterized by widespread corruption, with the World Economic Forum ranking the administration in 142nd place in diversion of public funds, 106th in irregular payments and bribes, 144th in favoritism in decisions by government officials and 144th in wasteful government spending.
http://presidencia.gov.do/detalle-discurso.php?type=release&id=1450
www.bloomberg.com/news/2013-02-27/dominican-republic-rejects-barrick-contract-on-4-billion-mine.html
http://www.dr1.com/forums/environment/130829-barrick-golds-effect-dr-environment-important-video-3.html