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Critics keep close eye on Dominican Republic gold mine's resumption

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Published Jul. 5, 2012

SANTO DOMINGO, Dominican Republic — One of the world's largest gold mining operations is about to open in the Dominican Republic, where the industry has a toxic legacy of pollution that stained rivers a searing red and failed to lift the fortunes of this largely poor country.

Abandoned 13 years ago by state-owned Rosario Dominicana, the Pueblo Viejo mine left behind an environmental mess and a cluster of depressed mountain towns.

Now, a joint venture by the world's two biggest gold companies, both of them Canadian, is launching a much larger operation at the site within weeks. Officials promise it will be radically different from the previous one and will be managed to prevent environmental damage, in addition to underwriting the cleanup of past contamination and providing billions of dollars for the country, especially in the mining region in the forested mountains north of the capital.

But skeptics are uneasy about the cyanide used to process the ore and question whether the operators can guarantee their assurances to contain chemical runoff in a country prone to major flooding, especially during hurricanes.

"We are not against mining in the Dominican Republic, necessarily, but the industry has been its own worst enemy here," said Luis Carvajal, a biologist at the University of Santo Domingo. "Without a doubt, the impact of the mine will be significant."

Pueblo Viejo Dominicana Corp. has waged an extensive campaign to defend itself, acknowledging the past problems that mining has caused in the country but otherwise dismissing what it says are largely unfounded fears.

"People have been scared, people have actually had a bad experience and now it's up to us to prove we can actually do the contrary," said Manuel Bonilla, president of the joint venture, which is 60 percent owned by the Barrick Gold Corp. of Toronto and 40 percent owned by Goldcorp Inc. of Vancouver.

The joint venture has said the Barrick Pueblo Viejo project will begin processing gold in the second half of this year, and that it will take 12 to 18 months to reach full production of about 1 million ounces annually. It also plans to process silver, copper, nickel and other metals.

The Dominican Republic lacks strong environmental regulations, a major reason the state-owned mining company could cause such destruction and why there was no real effort to clean up the mess, said Virginia Rodriguez, a coordinator for SalvaTierra, a local nongovernmental organization whose name translates as "Save the Earth."

Rodriguez said Barrick's plans to use 24 tons per day of cyanide in the mountainous center of the Dominican Republic, source of some of the country's most important rivers, makes her nervous. "There is a very high risk, especially with an island like ours with a very fragile ecosystem," she said.

Supporters of the project say Pueblo Viejo will be a huge economic boon for the Dominican Republic. The nearly $4 billion direct foreign investment is by far the largest in the Caribbean nation's history. Barrick will be the Dominican Republic's largest exporter and add 2 percent to the nation's GDP.

The mine itself will produce only about 2,000 jobs but the company says about 11,000 workers were involved in the construction and there will be more than 10,000 jobs indirectly created by the project, company and government officials say.

If gold prices hold up, mining eventually will surpass tourism as the country's largest income earner, with royalties and other revenue making up about 5 percent of the government's budget.

The company says that the environment around the mine has been the project's most immediate beneficiary. Barrick spent $4 million cleaning up discarded machinery, buildings constructed with asbestos and other debris left behind when Rosario shut down in 1999 after it reached a level of sulfide ore that it did not have the technology to profitably mine.

"Our target 10 years from now is to see wildlife in these streams again, to see fish and other species back into these rivers," Bonilla said.