The Senate approved a measure yesterday creating a protected area at Loma Miranda, home to the Falcondo mine. Glencore, led by billionaire Chief Executive Officer Ivan Glasenberg, called for “rationality” in decision-making on the mine’s future, the Baar, Switzerland-based company’s local unit said in a statement today.
The cost of permits to operate the mine will rise if the national park legislation is signed into law by President Danilo Medina. Affected landowners will be compensated, according to the bill. The mine, which Glencore acquired in 1956, contains 19.3 million tons of minerals.
“With operations at Loma Miranda, the Dominican economy would receive some $5.7 billion during the next 20 years,” according to the statement. “Where will those resources come from now?”
The Caribbean nation’s government has clashed with mining companies in recent years over royalties and environmental regulations. Dominican customs agents held up shipments from Barrick Gold Corp. (ABX)’s $4 billion Pueblo Viejo mine last year after Medina called the company’s concession “unacceptable.” Glencore temporarily shuttered the Falcondo mine last year due to low global nickel prices.
Glencore fell 1.7 percent to 360.5 pence at the close in London. The shares have gained 18 percent this year.
National park status is required to protect biodiversity and mitigate the impact of climate change, according to the Senate legislation. Glencore, which acquired the mine in 1956, says it represents a fraction of the Loma Miranda region.
The United Nations Development Programme last year said the company’s environmental study of the site was incomplete and that operations should be reconsidered. Glencore says it has operated the mine responsibly.
Sharing the island of Hispaniola with Haiti, the Dominican Republic’s $61 billion economy is the Caribbean’s biggest after Cuba. Gross domestic product is forecast to expand 4.5 percent this year, up from 4.1 percent in 2013, according to the International Monetary Fund.
The country ranked 117th out of 189 economies in overall business conditions according to the World Bank’s annual “Doing Business” report, which weighs factors such as obtaining construction permits and securing electricity supplies.
To contact the reporter on this story: Bill Faries in Miami at email@example.com