Tag Archives: mining

Mining for Gold in the Dominican Republic

cyanide heap leach gold mining

The $4 billion that two Canadian companies, Barrick Gold and Goldcorp, have poured into developing Pueblo Viejo, a gold mine, since 2009 amounts to the largest single foreign investment in the history of the Dominican Republic. The companies say that the money has turned the polluted ruins of what was the state-owned Rosario mine, abandoned in 1999, into a “truly world-class” operation that should provide the country’s government with $10 billion over its 25-year life.

But the project has been controversial. Just weeks after the mining started in January 2013, President Danilo Medina, who was elected last year, declared: “For every $100 of gold exports, Barrick will receive $97 and the Dominican people $3. That is simply unacceptable.” (In fact, Pueblo Viejo Dominicana Corporation, or PVDC, the company operating the mine, is 60% owned by Barrick and 40% by Goldcorp.) Mr Medina demanded that the contract be renegotiated; otherwise, he said, he would raise taxes on the mine’s profits.

This month the two sides agreed to changes that have front-loaded tax payments and could see the government get an extra $1.3 billion in 2013-16 provided that the gold price rises and stays above $1,600 an ounce (it is now around $1,350). Gustavo Montalvo, Mr Medina’s chief of staff, tweeted: “Together we ensured that words like ‘national sovereignty’, ‘justice’ or ‘transparency’ were transformed into something more concrete.”

Yet that may not calm local unrest over the mine, sited about 100 kilometres (60 miles) north of Santo Domingo, the capital. The investment was presented by both the government and company as including a clean-up of Rosario’s toxic mess and the installation of systems to keep local watercourses clean. But residents are suing PVDC, claiming that the new mine is poisoning rivers, causing illnesses and the death of farm animals. They want the government to release the environmental-impact assessment for Pueblo Viejo, which it has so far refused to do.

One farmer, María de la Cruz Mariano, said that she began to suffer skin allergies and other ailments in 2010, after PVDC began work. Tests on her blood conducted by a private laboratory showed high levels of lead, sulphur, cyanide and zinc. Some of her cattle have died from bovine anaemia, which can be caused by ingesting cyanide. Other residents report that previously clean local rivers have become polluted since PVDC built a dam to collect water containing cyanide, which is used to leach gold from crushed rock.

PVDC has signed the international code of practice for the handling of cyanide. It says it is “in the process of capturing all the surface flows” from the old and the new mines, sending the water to storage ponds where it is treated. PVDC says that, together with local people, it conducts regular, public tests on water and air.

But community leaders say they have no knowledge of such tests. The company has not answered requests to provide the dates on which they were conducted. Tests by the environment ministry, released only after a freedom of information request, found the water in the Margajita river downstream from the mine to be highly acidic, as well as containing sulphides and copper above legal limits. The ministry has made little effort to act on these results.

The old Rosario mine left some streams red with acid. PVDC’s clean-up obligations extend only within the mine perimeter; the rest was for the government. The firm points out that it has paid $75m ($37.5m of it a loan) to finance the government’s share of the work. It has also removed around 130,000 cubic metres (4.6m cubic feet) of contaminated soil. But Demóstenes Martínez, a congressman from the ruling party, argues that PVDC is violating both the constitution and the mining law.

It is not clear whether the pollution is being caused by PVDC’s operations, or is a legacy of the past. The government claims to have lost records of past tests on the rivers. But on its own the new agreement may not be enough to ensure that the mine regains the consent of the community. That will require greater candour.

Mining in the Dominican Republic:  Sickness and wealth, Economist, Sept. 21, 2013

Mining Rubble: Tibet’s Mineral Resources and Fragile Ecology

jaima mine tibet. Image from China Daily

The ecology of the Tibetan plateau, noted the Ministry of Land and Resources two years ago, is “extremely fragile”. Any damage, it warned, would be difficult or impossible to reverse. But, it went on, the China National Gold Group, a state-owned company, had achieved “astonishing results” in working to protect the environment around its mine near the region’s capital, Lhasa. On March 29th at least 83 of the mine’s workers lay buried under a colossal landslide. Its cause is not yet certain, but critics of Tibet’s mining frenzy feel vindicated.

The disaster at the Jiama copper and gold mine, about 70km (45 miles) north-west of Lhasa, has clearly embarrassed the government in Beijing. According to China Digital Times, a California-based media-monitoring website, the Communist Party ordered newspapers to stick to reports issued by the government and the state-owned news agency, Xinhua.

Foreign reporters are rarely allowed into Tibet, least of all to cover sensitive incidents. The official media have avoided speculation about any possible link between the landslide and mining activities in the area. They say the landslide covered a large area with 2m cubic metres of rubble. By the time The Economist went to press, 66 bodies had been pulled out by teams of rescuers with sniffer dogs. The high altitude and lack of oxygen made rescue work hard. A deputy minister of land and resources, Xu Deming, said preliminary investigations had shown that the landslide was caused by a “natural geological disaster”. Fragments of rock left behind by receding glaciers are being blamed, though officials do not explain why the workers’ camp was set up so close to such an apparent hazard.

The Tibetan government-in-exile based in India says it fears the disaster was caused by work related to the mine, which appears to have grown rapidly since construction began in 2008. It was formally opened two years later, at a ceremony attended by Tibet’s most senior officials. The $520m investment was described at the time as the biggest in Tibet’s mining industry by a firm belonging to the central government. The mine is owned by China Gold International Resources, a company listed in Hong Kong and Toronto. China National Gold Group is the controlling shareholder.

Tibet has been trying hard in recent years to encourage such companies to dig up the plateau’s metals and minerals. It has a lot of them to offer: China’s biggest reserves of copper and chromite (used in steel production), among the world’s biggest of lithium (used to make batteries), as well as abundant reserves of uranium, gold, borax (a component of ceramics and glass) and oil. Extracting these, however, often involves boring into a landscape considered sacred by Tibetans.

The Jiama mine, in a valley known to Tibetans as Gyama and revered as the birthplace of a seventh-century Tibetan king, has been the focus of protests by locals angered by environmental and other issues. Water from the valley flows into the Lhasa river. Woeser, a Tibetan activist based in Beijing, has blogged about locals’ fear that their water supplies will be polluted.

Tibetan resentment has been fuelled by the mining industry’s failure to provide much direct employment.

Excerpts, Mining in Tibet: The price of gold, Economist, April 6, 2013, at 54

Afghanistan’s Untapped Minerals, who gets the prize?

An Indian government-backed group, two Iranian contenders and Canada’s Kilo Goldmines Ltd. (KGL) are among six bidders to mine Afghanistan’s richest iron-ore deposit, the Afghan government said.  Afghanistan’s mines ministry opened the bids today for the estimated 1.8 billion tons of ore buried in rocky, treeless ridges at Hajigak, 100 kilometers (60 miles) west of Kabul. The tender is the biggest on offer in a country that the U.S. government estimated last year holds $1 trillion in untapped minerals.

A group led by India’s state-owned Steel Authority of India Ltd. (SAIL) offered a bid, according to a text message from Abdul Jalil Jumriany, a director-general in the mines ministry. The consortium includes state-owned mining companies NMDC Ltd. and Rashtriya Ispat Nigam Ltd., and private-sector companies JSW Steel Ltd. (JSTL), Jindal Steel & Power Ltd. (JSP), Monnet Ispat Ltd. and JSW-Ispat Steel Ltd.  A separate bid was made by India’s Corporate Ispat Alloys Ltd., Jumriany’s message said.

Two Iranian bidders are Gol-e-Gohar Iron Ore Co., one of Iran’s biggest iron ore producers, and Behin Sanate Diba Co., a private-sector group of 10 investment, mining and industrial companies, Jumriany said.  The sixth entrant is Acatco LLC, run by Afghan-American businessman Nasir Shansab from Herndon, Virginia, outside Washington. Acatco’s website does not specify its current business activities.

By Eltaf Najafizada and James Rupert , Afghanistan Gets India, Iran, Canada Bids for Iron Ore, Bloomberg, Sep 6, 2011

The Africa’s Middle Class of $2 per day

Many [African] countries are making a mint from commodities such as oil, copper and gold thanks to sky-high prices. But that is not enough to give Africa a permanent boost. Commodity markets are notoriously fickle and revenues can quickly be squandered…The African Development Bank…says a third of Africans are now “middle-class”, defined as having between $2 and $20 to spend a day. A decade ago that was true of only a quarter of Africans. This change has occurred in a period of fast population growth among low-income families….Two-thirds of that supposed new middle class have just $2 to $4 per day. They may be able to buy a telephone or washing-machine or television, but not often and probably not all three.  Middle-class may, in any case, be a misnomer for such people. In education, aspirations and social status many of them are closer to the European working class of a century ago: no longer starving, but still short of many things the Western middle class of today takes for granted. Their children probably lack a good education. Holiday travel is largely out of reach. Good health care is a luxury. Many start out as subsistence farmers and are among the first in their families to earn a regular wage. They certainly do not carry credit cards or count as part of a global consumer society.

Sharp geographical variations persist. North Africans top the ranking. In sub-Saharan Africa the better the governance, the bigger a country’s middle-income bulge. In Botswana, Namibia, Ghana, Kenya and South Africa almost half the population earn more than $2 per day, whereas in the worst-governed countries less than a fifth have managed to cross that barrier.

In any event, improvements in governance, better access to technology, the rapid spread of mobile telephones and the better use of natural resources have begun to raise millions out of dire poverty. The class of Africans with $4 to $20 a day has been stuck at about 14% for three decades. A decade ago, two-thirds of Africans had less than $2 a day. Today that figure is around 60%. And most of those above the barrier are still far from comfortable.

Africa’s growing middle class: Pleased to be bourgeois, Economist,May 14,2011, at 58