Dominican Republic starts to get its cut from Barrick Gold in 2013
Santo Domingo.- Dominican Republic will begin receiving payments from Barrick Gold on gold sales in 2013, albeit a tiny proportion of the operation’s volume.
The country will receive as much as 50 to 65 million (depending on the price of the metal), next year while sales volumes will total between US$1.7 billion and 2.0 billion.
The contract with the mining company calls for the government to receive only 3.2% of net exports, boosted to 28.75% when Barrick recovers has its entire investment.
Barrick Gold will also pay 25% tax on profits.
Barrick Pueblo Viejo PR manager Jorge Esteva affirms that the contract is favorable for the country, because of the 25% tax on capital gains. “We’ve just started the first shipment and a there are a number of discounts that must be done there.”
But the environmentalists Luis Carvajal and Osiris de Leon, quoted by eldia.com.do, say the contract’s minimum 10% return for Barrick is a high percentage, given gold’s high price, especially when its investment was made based on an estimated price of US$470 the ounce.
When the contract was negotiated the price of gold was US$470 an ounce, way below its current US$1,714.60, and is projected to reach US$2,000 next year.
Source: Dominican Today
Category: DR News |