Digging Deeper

While the mining industry reached peak production levels in 2014 and has seen declining production numbers ever since, the industry’s strong fundamentals and a continued emphasis on excellence has guaranteed its importance in the Dominican Republic.

Much of the mining activity in the Dominican Republic is focused on six areas: Pedernales, Barahona, Monseñor Nouel, Sanchez Ramirez, Samaná, and Puerto Plata, and sizable expansion is forecast for the next decade. Extraction focuses on gold, silver, nickel, marble, bauxite, gypsum, and collection of semiprecious stones. According to the Extractive Industries Transparency Initiative (EITI), the estimated value of the Dominican Republic’s metallic and non-metallic mining hovers around USD40 billion. According to the most recently available statistics from the US Geological Survey (USGS), the mining and quarrying sector contributes around 1% to the Dominican Republic’s GDP and employs nearly 13,000 people. According to the USGS’ most recent analysis of the DR’s mining operations, the country produced 26,083kg of gold; 78,221kg of silver; 3,039 cubic meters of travertine; 4,000 cubic meters of dolomite; 2 million cubic meters of limestone; 2,444 cubic meters of marble; 65,005 cubic meters of gypsum; 1.1 million tons of nickel; and 10,379 tons of copper.
According to the most recently available statistics from the Central Bank of the Dominican Republic, the DR exported more than 26,000 tons of ferronickel with an approximate value of USD157 million and 78,129kg of silver and 27,022kg of gold. USD154 million worth of non-monetary gold was exported to the US.

A major copper producer, Perilya Ltd. operates the Cerro de Maimón copper, gold, and silver mine in Monseñor Nouel province. The mine has 4.8 million tons of proven and probable ore reserves, representing 2.54% copper, 1.3% zinc, 0.96 grams/ton of gold, and 1.86 grams/ton of silver. The USD69 million mine has been in operation since 2008, and it gives preferential hiring consideration to local workers, hiring 80% of its employees from the Monseñor Nouel province, according to disclosures from the company.

One of the largest mine operators in the DR, Pueblo Viejo Dominican Corporation, which is jointly owned by the Canadian firms Barrick Gold Corp. (60%) and GoldCorp Inc. (40%), has come to dominate the industry. In recent years, gold has been a significant source of activity and investment in the Dominican Republic, and, according to Forbes, it was the fifth-largest gold mine in the world in 2015 based on total production.

According to the Dominican Today, the Pueblo Viejo gold mine alone contributes roughly USD1.7 billion to the Dominican economy. The mine employs nearly 2,200 people, 93% of which are Dominicans. The Pueblo Viejo operation is estimated to have extensive untapped mineral reserves, and the mine is expected to continue producing for quite some time. According to the USGS, the mine’s gold reserves are estimated to be 457,960kg, 2.9 million kg of silver, and 171,900 tons of copper. Though a decline in gold prices on the international market has put some strains on the operation, its position as a market leader and its experience in the Dominican market ensure that it is well poised for growth in the future.

Interestingly, though mining is almost always associated with terrestrial and subterranean operations, the game is changing, and companies across the industry are looking to the skies for the next big step forward. Barrick Pueblo Vieja has put into operation a fleet of unmanned aerial drones. With flights taking off every day from its site in the Dominican Republic, Barrick is using the technology to enhance safety and efficiency. This technology has become a game changer or many of the firms operations, including inventory assessment and exploration. As the industry continues to advance, the Dominican Republic is expected to remain a regional leader in mining solutions and technologies.

Gold exploration operations are currently in progress in a number of different areas. GoldQuest Mining Corp. is exploring the potential of its Romero and Tireo initiatives; Everton Resources is exploring projects in Cuance and Los Hojanchos, Jobo Claro, La Cueva, Loma Hueca, Maimón, and Pueblo Viejo; and Unigold Inc. is assessing the potential of the Neita concession.

In April of 2016, GoldQuest announced the development of a new mine project at its Romero site. The mine, which is expected to be the company’s core Dominican asset upon completion, will have a capacity of 2,8000 tons per day, and it will focus on the gold and copper core of the Romero Deposit. The site is expected to contain 840,000 ounces of gold, 980,000 ounces of silver, and 136 million pounds of copper. The mine is expected to require USD158.6 million worth of investment to bring online, generating jobs and stimulating economic activity in the region.

Nickel is another major mineral product and export of the Dominican Republic. Falcondo, a major nickel producing mine, is majority owned by US firm American Nickel while the government of the Dominican Republic owns a minority share. The Falcondo mine, located in Loma La Peguera, Bonao, has the capacity to produce 29,000 tons a year of nickel derived from ferronickel, and the sites reserves have been estimated at 70.8 million tons.

Not everyone has been happy about the activities of large mining, corporations, however, and groups in certain parts of the country have protested what they deem to be the exploitive and environmentally damaging practices of the mining sector. Protestors claim that mining firms are destroying the natural heritage and beauty of the Dominican Republic. Certain NGOs claim the water resource of the country are put at risk by the activities of miners, and the Loma Miranda mountain has become a symbol and frontline for the movement in the country, according to AlJazeera America. Though mine operators and government officials claim otherwise, residents in certain areas in proximity to large-scale extraction activities have pointed to the mines as the source of their health problems. Residents complain that irresponsible solid and wastewater management has caused irreversible damage to the environment, but stakeholders across the country are concerned that excessive penalties and regulation could damage the health wellbeing of the industry and the economy as a whole. Currently, government officials, private industry, and community leaders are trying to develop complete and consensual plans for addressing the concerns and needs of all parties.

As the mining industry in the Dominican Republic moves forward, expectations are high that a middle ground between profitably and responsible and sustainable practices will be found. The industry is a leading driver of economic growth in the country, and finding commonsense solutions will be in the best interest of everyone involved. As the mining industry looks to the future, its prospects for sustained growth are good. By bringing practices inline with the expectations and needs of the population, mine operators are underscoring their willingness to contribute in long-term ways to the country’s economic health.