Dominican Gold

By Charles Kubach, Mine-Engineer.Com
March 18, 2012

In my foreign travels typical conversations come up with local politicians and residents when they hear that I am a mining engineer. The subject matter quite often turns to gold and the fact that foreign companies want to take gold out their country. I ask them what the unemployment rate is in the local area where "foreigners" are looking for gold and they say it is high, as most live on agricultural activities. Then I tell them that it costs between $1 billion and 4 billion US dollars to put in a large gold mine and facilities, and this represents a very sizeable investment on behalf of the mining company. For the local population, it also represents a sizeable cash flow into the local economy, creating many good paying jobs, which will enrich the lives and standard of living for thousands of local residents. Then I mention that it is not just the mine, but all the supplies and services that a operation of this type will require and it is easy to see how a large gold mine will affect the economic lives of tens of thousands of local residents in a positive way.

But they typically comment, they are taking our gold. To which I reply that is their business, to mine and sell gold on the market. That is what gold mining companies do. If a local company had the $4 billion and the technical expertise to invest, they would also mine the gold and sell it on the international gold market, so there is little difference whether a foreign company mines it or a local company mines it. The positive impact such an investment will have on the lives of the local citizens will be huge. It will allow the local residents to enjoy a much higher standard of living for them and their families for many years to come. This should make it worth foreign investment, and encouraging mining companies to explore and mine their valuable resources. These are just simple facts that can not be disputed, and most people with common sense understand, and I have never lost this argument, so far.

Which brings me to the Dominican Republic, and Barrick's Pueblo Viejo Gold Mine, scheduled to begin production any month now. Barrick has invested over $4,000,000,000 in this project to date and it is expected to produce over 1,000,000 ounces of gold per year, making it responsible for 15% of the Dominican Republic's total annual exports. Now that is capitalism in action, producing many good jobs, creating a higher standard of living for many local families, and I have several friends that have been with the project since it's exploration/construction days, that are happy to be employed there, as well. The President of the Dominican Republic said last year, that mining increased about 80% in his country, and this resulted in a increase in Gross Domestic Product of 4.5%. Now that is a positive impact that mining had on the entire country, and they can only look forward to more good things as production gets under way, and perhaps exploration for other commercially interesting sites for potential future mining ventures. Canada is a country where gold mining accounts for 4% of their GDP and they do quite well, as I am certain that the Dominican Republic will flourish under its expanding economy, fuelled by mining. Further, considering the global economic situation, and the emerging Chinese fondness for holding gold, there is nothing but sunny skies on the horizon for gold producing mines.

"The Sign of an intelligent person is not the realization of all they know,
but rather the realization of all they do not know."
Charles Kubach 1979

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