SANTO DOMINGO (miningweekly.com) – Falcondo, a unit of Canada-based Xstrata Nickel, has had to triple its security expenses in the Dominican Republic in recent years as a result of the country’s worsening situation, officials say.
“Security in the country has seen a gradual deterioration, which has forced us to significantly increase our security costs,” company spokesperson Luis Lopez said. “They have tripled in the past few years.”
He added that Falcondo hoped the government would handle the situation so the company could count on a stable and secure work environment.
Dominican President Danilo Medina has acknowledged the problems and promised in a televised speech to the nation on Tuesday to improve security and reform the country’s police force. According to the World Economic Forum’s latest Global Competitiveness Index, released in October, the Dominicain Republic ranked 143rd out of 144 countries worldwide in reliability of its police force.
Falcondo has developed ferronickel surface mining in the town of Bonao, in Monseñor Nouel province, 80 kilometres north of the county’s capital Santo Domingo, since March last year. It currently employs 950 full-time people and another 650 contractors. Last year it produced 13 498 t nickel-in-ferronickel. It had been operating at 50% capacity following a shutdown in 2008 owing to low nickel prices and high oil prices, but planned to reach 100% in the future.
Last year, Falcondo generated revenues of $274-million and an operating profit of $32-million. Revenues for the first six months reached $129-million (up 7.5% from the same period last year), while operating profits reached $2-million (a decline from $16-million last year).
“The depressed international markets and its resulting impact on the price of nickel forces us to be more creative to reach our goals,” Lopez said. “We see the rest of the year as challenging … However, we feel confident that we can [still] reach all of our budget goals.”
Key to reaching 100% capacity is starting the Loma Miranda project, which is awaiting environmental approval. “We are confident that we will get approval for our Loma Miranda project, which will add another 20 years to our operation,” Lopez said.
However, there have been several protests against the Loma Miranda project, including at the presidential palace and the Canadian embassy in Santo Domingo. Demonstrators say the project will harm the environment, a charge Falcondo denies.
Last year, Falcondo was the first Xstrata Nickel site to undergo an intense third-party Xstrata Sustainable Development standards audit. During 2011, Falcondo planted more than 200 000 trees on top of the nearly 170 000 it planted in 2010. Meanwhile, it has rehabilitated 164 hectares of land since 2008.
In addition to starting Loma Miranda, Falcondo is also working to lower its electricity costs for that project and its current mining operations. Lopez says he expects the company will be able to achieve that goal. Plans called for converting its long-term energy source from oil to natural gas.
Falcondo recently changed managers, with Darren Bowden replacing Anthony Joseph García, who was named to a position with Xstrata in Canada.