UNDP Rejects Glencore Exploration at Dominican Nickel Mine

The United Nations Development Programme said an environmental study conducted by Glencore Xstrata Plc at a mine in the Dominican Republic is incomplete and ferronickel exploration at the site should be reconsidered.

Glencore’s environmental study at the Falcondo Lomo Miranda mine failed to consider the social and environmental impact of extraction at the mine, UNDP said in a statement published today. The Dominican government requested the review last year prior to allowing the Baar, Switzerland-based company to extract ferronickel from the mine, located 80 kilometers (50 miles) north of Santo Domingo.

“The environmental impact study is, according to our evaluation, incomplete and superficial,” Valerie Julliand, UNDP’s representative in the Dominican Republic, said in a news conference in Santo Domingo. The company’s study failed to consider the mine’s impact on local communities, drinking water and the environment, and the project “does not address environmental and social demands” of the country, she said.

UNDP studied the possible social and environmental impacts of the mine for four months to determine if Glencore should be granted an environmental license for extraction. The miner owns 85 percent of the outstanding shares of Falcondo and has operated in the Dominican Republic since 1971, according to the company website.

“We will study the technical recommendations contained in the report, evaluate them and implement action plans where necessary,” Peter Fuchs, director of corporate affairs at Xstrata Nickel in Toronto, said in a statement.

Extraction at the Falcondo Lomo Miranda mine is expected to generate $5.4 billion for the Dominican Republic during the next 25 years, according to newspaper El Dia, citing comments by Xstrata Nickel President Darren Bowden. The mine contains an estimated reserve of 20 million tons of ferronickel, Bowden said, according to El Dia.

Glencore Xstrata shares in the U.S. fell 3.3 percent to $5.05 today.