With government and private business seemingly aligned for the green light of the exploitation permit for Goldquest operations in a mountain area of San Juan de la Maguana, economists of the state university are raising the red flags that what is going on in Sanchez Ramirez province could be repeated in San Juan de la Maguana. The main issue is that the government does not have the oversight capacity to control the mining companies.
As gold prices remain high on the international market, economists Apolinar Veloz and Maritza Ruiz from the Dominican Public Policy Observatory of the Autonomous University of Santo Domingo (UASD) are urging the Dominican government to review its mining contract with Barrick Pueblo Viejo, as reported in Hoy. They argue the agreement contains excessive provisions that are financially and environmentally detrimental to the Dominican Republic.
The call for renegotiation highlights international precedents where governments successfully restructured terms with Barrick Gold, including high-profile cases in Chile, Papua New Guinea, Mozambique, and Tanzania.
Veloz and Ruiz specifically recommend eliminating the Second Amendment to the Dominican State’s contract with the Canadian mining giant. They contend that the current framework disproportionately benefits the corporation when gold prices fluctuate, while leaving the State burdened with long-term liabilities.
A “lease” without lease payments
A central critique of the contract is its classification as a lease agreement, despite Barrick Gold paying no compensation for the leasing of state-owned mining rights, real estate, improvements, or intellectual property used at the Pueblo Viejo mine in Sánchez Ramírez province.
The operation falls under the Fiscal Reserve Law, granting Barrick the right to exploit the Expanded Montenegro Fiscal Reserve (RFMA). However, the contract only mandates taxes on the extraction of gold and silver. Other valuable minerals extracted from the site—such as zinc, copper, cadmium, and limestone—are essentially acquired at no additional cost to the company. Furthermore, Barrick extracts materials like sand, gravel, rock, and clay for its daily operations without compensating the state.
Compounding the financial asymmetry, the economists note that Barrick operates under its own financial criteria to determine net profits, bypassing standard Dominican income tax laws. The company also benefits from sweeping tax exemptions on fuel, imported capital goods, subsidized electricity, and water use. Additionally, high levels of intercompany debt with its own subsidiaries are deducted before calculating taxable profits, significantly lowering Barrick’s tax obligations.
The payment structure explained
According to the contract, Barrick Gold’s payments to the government are limited to three categories: Net Smelter Return (NSR), Net Profits Interest (NPI), and the Minimum Annual Tax (IMA).
• Net Smelter Return (NSR): Royalties are paid strictly on produced, sold, and collected gold and silver. Payments are made up to 10 days after the end of the month in which the sales are actually settled. According to Veloz, this effectively means the Dominican Republic finances the sale of the gold for free, receiving its share only after Barrick collects its revenue.
• Net Profits Interest (NPI): Barrick only pays the NPI in fiscal years where the project achieves a 10% Internal Rate of Return (IRR) and the company has fully recovered its initial investment through positive net cash flow.
Mounting environmental liabilities
The environmental toll of the Pueblo Viejo operation, which relies heavily on cyanide for extraction, remains a critical concern. Veloz warned that the damage caused by the tailings dam is permanent, and once the company concludes its operations, the financial weight of the environmental impact will fall squarely on Dominican taxpayers.
“Until now, no Dominican President has had the courage to consider that the country’s non-renewable resources should not only benefit current generations but also preserve part of that wealth for future generations,” Veloz stated.
While a mine closure account allegedly exists to cover future remediation costs, its details remain opaque. The public has no information on whether the funds are held domestically or abroad, the total accumulated balance, the initial deposit, or the interest rate.
Meanwhile, local communities surrounding the mine continue to report respiratory and skin conditions. The fact that Barrick Gold supplies bottled water to affected families heavily suggests that local water sources are no longer safe for domestic use. Despite these ongoing complaints, the government has yet to execute an independent, comprehensive study of the area’s water, air, and soil quality.
The lack of capacity to monitor the gold exports and for violations in the mining operations, places compliance practically in the hands of the ethics and best practices of the mining company.
Looking ahead, Veloz warned of the massive implications of the “Pueblo Grande” concession. This pending mining right covers an area nearly four times the size of the current Pueblo Viejo operation, situated in the heart of the nation.
Meanwhile, the Abinader administration continues to take steps that could result in the granting of the exploitation permit for the Goldquest gold mine in the mountain area of San Juan de la Maguana. The mining operation proponents have decades trying to obtain the permit for the gold mine that is objected on grounds it would risk key water sources for the population.
Rivers and Hatillo Dam waters in Sanchez Ramirez province are believed to be contaminated, but Barrick Pueblo Viejo has yet to deliver a scientific study on their current condition after years of gold mine operation.
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29 April 2026