Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
The Dominican Republic’s Minister of Energy and Mines, Antonio Almonte, rejected rumours that linked Barrick Gold’s recent $108-million advanced tax and royalty payment to the possible approval of a tailings dam at the Pueblo Viejo operation.
In a TV interview broadcasted over the weekend, Almonte said that the advanced payment was the result of negotiations led by the ministry of finance and the national government’s economic team, with the goal of addressing the current fiscal deficit that is a direct consequence of the slowdown caused by the covid-19 pandemic.
Barrick’s disbursement included advance payment of income tax, net profit interest and royalties, adding an advance payment of the royalty for the year 2021 estimated at $47 million.
This is the fourth tax payment Pueblo Viejo has made so far this year and brings its contribution to the Dominican government for 2020 to $385 million.
The tailings dam approval is subject to an environmental impact assessment that will determine whether the facility will endanger the surrounding ecosystems and communities or not
The miner has also agreed to advance the royalty payment for the years 2022 and 2023, estimated at $95 million, to support the government’s mission to fight the health and economic crisis caused by the novel coronavirus.
“This does not mean that the State has made any additional commitments to Barrick,” Almonte said. “The decision process related to the construction [of the tailings dam] is tied to the results of the environmental studies.”
The politician emphasized that, even though his office understands that Barrick needs to build the dam, its approval is subject to an environmental impact assessment that will determine whether the facility will endanger the surrounding ecosystems and communities or not.
According to the government official, a complex and detailed EIA needs to be carried out and then submitted to both the Ministry of Energy and Mines and the Ministry of Environment, whose technical teams will conduct an evaluation with the support of international experts.
The Pueblo Viejo operation is located approximately 100 kilometres northwest of Santo Domingo, and it already hosts the El Llagal tailings storage facility, whose hazard classification is considered ‘extreme.’
The facility started operating in 2012, together with the mine. The overall operation is run by Pueblo Viejo Dominicana Corporation — a joint venture between Barrick (60%) and Newmont (40%).
Last year, Pueblo Viejo produced 590,000 ounces of gold, while its 2020 guidance ranges between 530,000 and 580,000 ounces of the yellow metal.
