Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Glencore Xstrata (LON: XTA) will temporarily close shop at its Falcondo nickel mine in the Dominican Republic due to falling nickel prices.
A mine spokesman told Associated Press reporters that Falcondo will be shut for two to three years. Up to 1,000 employees and 700 contractors will be laid off.
The mining giant has been trying to expand operations at the mine but environmental opponents have rendered this a tricky feat. Earlier this year the company indicated that its ability to expand would be a deciding factor in its decision to stay in the Dominican Republic.
Another hit came from the United Nations Development Program which in May rejected the miner’s environmental study, saying it failed “to consider the social and environmental impacts of the extraction.”
A UN panel also said the project would endanger water supplies, wildlife and wetlands.
Falcondo also shut down in 2008 due to the global economic downturn. It reopened in 2011.
