Caribbean & Central America - May 2014 (ISSN 1741-4458)

Almost a year after the formal creation of an energy & mining ministry, on 24 April President Danilo Medina appointed the first ever minister to lead the portfolio. In doing so, President Medina has established a new government institution that is set to play an increasingly relevant role in the Dominican Republic (DR)’s economic development for years to come. Those who believe that the continued exploitation of the country’s mining riches will help to boost the domestic economy have welcomed the new ministry. But those concerned by the negative environmental and other effects that mining activity often brings with it view the new ministry with a certain degree of dread, amid concern that it will be primarily focused on promoting the development of the mining sector.

President Medina promulgated law 100-13 creating the energy & mining ministry in July last year. The law stipulates that, among other things, the ministry will be in charge of “formulating, adopting, managing and coordinating the national policy for the exploration, exploitation and processing of metallic and non-metallic minerals”. It also states that the ministry must also “ensure the protection, preservation and adequate exploitation of minerals”. Despite the inclusion of such a disclaimer, those opposed to the expansion of mining activity questioned the need for a new ministry seemingly focused on fostering an economic activity with such a negative history in the country.

Last year the Medina government received national plaudits after it forced Canadian mining firm, Barrick Gold, to renegotiate the terms of the contract granting it the rights to exploit the DR’s main gold mine [RC-13-05]. The re-negotiation of the Pueblo Viejo mine contract reminded the local community of the problems associated with large-scale mining projects such as environmental risks and the threat that such projects will displace other economic activities in local areas. Since then activists have launched various campaigns aimed at preventing the development of other major mining projects, particularly in the country’s central area- the DR’s agricultural breadbasket.

The mining issue has remained very much alive, as congress still has to make a final decision on a proposal to create a new national park in the Loma Miranda area, where the local subsidiary of Anglo-Swiss mining giant Glencore Xstrata has been looking to dig a new major ferronickel mine. This may explain why President Medina took his time to appoint an energy & mining minister. The Medina government may not want to antagonise anti-mining activists, but it is also aware that large mining projects can provide an important economic boost and it does not want to close itself to this possibility. Instead the current Partido de la Liberación Dominicana (PLD) government would no doubt prefer to reach a broad compromise that would allow for the continued expansion of mining activity but with public consent. This made the selection of a new minister a politically sensitive matter that came under close scrutiny.

In the end Medina chose Pelegrín Castillo Semán, an experienced national deputy from the ruling PLD although the appointment prompted immediate questions due to Castillo’s party affiliation (see sidebar). The fact that hours prior to Castillo’s appointment, agriculture minister, Luis Ramón Rodríguez, presented his resignation for undisclosed reasons (Rodríguez has been replaced with Angel Estévez, the former president of local bank, Banco Agricola) also fuelled speculation regarding disagreements within the government over future mining policy. These differences have further emerged in relation to the Loma Miranda issue, raising further questions as to future policy: while environment minister, Bautista Rojas Gómez has said that the government had already decided that mining in Loma Miranda is unviable, Castillo told reporters that the government had yet to adopt a definitive stance, stating that as mining minister he would now consult with experts before making a recommendation.

• A dromedary and not a horse

On 26 April the president of the local industry lobby group, Asociación de Empresas Industriales de Herrera y Provincia de Santo Domingo (AEIH), Víctor Castro, responded to Castillo’s appointment as head of the new energy & mining ministry by calling for the immediate adoption of a politically unbiased national mining policy that takes into account the country’s frail environmental circumstances. Castro said that this was necessary in order to “overcome the bitter taste left by having a ministry conceived as spoils for political allies”. Castro added that “politics has interfered and influenced the creation of the energy & mining ministry so that instead of a horse what we have created is a dromedary”, an allusion to the ministry’s perceived lack of political independence that could make it unfit for purpose.