Falcondo has announced it will close its mining operations. The company will gradually let go personnel and only keep maintenance staff. The decision could affect around 800 employees and many more suppliers. It will also have a major effect on commerce in Bonao, which depends on the money circulated by the company. The company said it would continue with its social responsibility programs in Monsenor Nouel and La Vega provinces through its Falcondo Foundation.
The company said it could only restart operations if it were able to reduce its power generation and processing costs and receive authorization to mine in Loma Miranda. Falcondo spokesman Alain Astacio said that its parent company Glencore is evaluating the possibility of making capital investments in the power plant so that Falcondo can operate at 100% of its productive capacity.
Astacio said that the decision comes in response to the collapse of nickel prices and the fuel price increases on the global markets.
The announcement follows the Chamber of Deputies passing a bill on Tuesday 1 October aimed at declaring Loma Miranda a National Park. The bill has yet to pass in the Senate.
The legislators acted to declare the mineral rich mountain a National Park in response to the director of Mining’s public announcement that he was waiting for Falcondo to present a new impact study where modern methods would be used to reduce environmental damage. Community leaders and environmental experts had also warned of the significant environmental and health damage already caused by previous Falcondo mining operations in the region.
Falcondo had hinted that it would close its operations unless it was authorized to mine in Loma Miranda.
Astacio assessed the value of the company’s ferronickel exports at US$250 million a year. Falcondo financial director David Suarez cited losses of between US$15 and US$17 million for 2012, as reported in Diario Libre.
Astacio stated that the company needs “hundreds of millions of dollars” in financing in order to restructure and become competitive once more. He added that this is why they were seeking authorization for a project in Loma Miranda that would guarantee a return on investment.
Presidency Administrative Minister Jose Ramon Peralta said that the government regretted the shutdown of Falconbridge’s operations since the move would cost the country thousands of jobs. He said that company executives had requested an appointment with the government several days ago and that the authorities were willing to meet them in order to hear their suggestions.