The rebirth of Dominican mining
THE DOMINICAN REPUBLIC IS HOPING ITS AMBITIOUS PUEBLO VIEJO PROJECT SIGNALS A NEW ERA FOR ITS MINING INDUSTRY AS COMPANIES SUCH AS UCM HOPE TO LURE INVESTORS TO NEWLY-CREATED SPECIAL MINING ZONES

MIGUEL ANGEL PEÑA Director of Unidad Corporativa Minera (UCM)

Two mammoth mining projects in the Dominican Republic have Miguel Angel Peña very excited, and for good reason. As director of the Unidad Corporativa Minera (UCM), a public company created less than two years ago to boost the country’s mineral and mining potential, Mr. Peña’s goal is to one day see the sector account for 5% of GDP.
He argues that one of these projects will help the Dominican Republic reach that objective. “We based our goal on the operation at Pueblo Viejo where Placer Dome of Canada (North America’s third-largest gold mining company) is to mine for gold and silver in what is said to be one of the world’s largest gold deposits,” he explains. Mining officials say the company will invest around $336 million in running the once U.S.-owned mine for a three-year period.
“This project is also helping the Dominican Republic relaunch its minerals and mining sector and we expect to export around $250 million worth of ore annually at current world prices along with the zinc and silver found at Pueblo Viejo,” Mr. Peña says.

DIGGING DEEP Unidad Corporativa Minera is aiming to boost the mining sector’s share of GDP to 5% of the total.

That plan includes another huge project at Bonao, 50 miles north of the capital, where an estimated 65 million tons of nickel were being mined by the Falconbridge company, also of Canada, until low world nickel prices forced the operation to shut down temporarily.
“We’re confident that we’ll soon have enough incentives in place and prices will improve enough to continue mining there because that project earns us around $200 million a year from exports,” he says.
But the Dominican Republic has other mineral resources that the government is also eager to exploit: high-quality marble, gypsum, bauxite, salt, coral stone and others that are used in construction, manufacturing and medicine.

According to Mr. Peña, government officials do not want to see foreign companies come in and just haul the minerals out. Rather, they want the companies to add value to the product and to lure the needed investment, therefore the authorities are planning special mining free zones. “What we’ve essentially done is to combine the law which covers the authorization of mining concessions with the law on free trade zones in order to create what we call ‘industrial mining parks’,” he explains.

“Mining is capital intensive and not labor intensive, but this country needs jobs. So our idea is to bring the mining and the industrial sectors together at these parks and create direct employment for more than 30,000 people.”
Government incentives for those companies interested in establishing themselves in the industrial mining parks are planned and the necessary infrastructure to move the products to market will be built. Geologists have pinpointed potential sites for ten of the parks, each located near the coast for easy access to shipping.
“One of these parks, for example, is to be located at Barahona (in the south) where there are huge deposits of gypsum, salt, marble and other minerals, all of which have industrial uses. These minerals can be processed near the mines and shipped out from the ports there. There will be big profits both for the companies and for the country,” he says.

Some of the ports could also be used for cruise ships or ferries connecting with other destinations in the region. “Our privileged location in the center of the Caribbean means we could become a major export center for construction materials,” Mr. Peña continues.
All of this is being done with careful attention to ecological concerns, the UCM executive promises, in line with the strictest norms on sustainable development for an island environment like that of the Dominican Republic.
“What we are promoting here is a new idea in mining. This industry is not just about digging a hole in the ground and dragging out some rocks, but rather using minerals from the earth for many, many important daily uses,” he says.
“We all are heavily dependent on this industry. It contributes so much to the development of civilization and there are definite opportunities here for U.S. investors who want to join us in this enterprise.”