Dominican Republic and Haiti: Country Studies

Dominican Republic and Haiti: Country Studies
ing. Although the Spanish mined gold on the island as early as
the 1520s, gold production in the Dominican Republic was
insignificant until 1975, when the private firm Rosario Dominicano
opened the Pueblo Viejo mine, the largest open-pit gold
mine in the Western Hemisphere, on the north side of the
island. In October 1979, the Dominican government, the
owner of 46 percent of the shares of Rosario Dominicano, purchased
the remaining equity from Rosario Resources, a New
York-based company, thereby creating the largest Dominicanowned
company in the country. Rosario's huge mining infrastructure,
with an annual capacity of 1.7 million troy ounces of
gold and silver, impelled by rapidly increasing international
prices for gold, had nearly succeeded in pushing dore past sugar
as the country's leading source of export revenue by 1980.
From 1975 to 1980, gold and silver skyrocketed from percent
of exports to 27 percent. Declining prices for gold and silver
during the 1980s, however, curtailed the extraordinary growth
trend of the 1970s.
Production from the Rosario Pueblo Viejo gold and silver
mine declined further as reserves in the oxide zone were being
depleted. In 1992 gold production was down to 72,000 troy
ounces (from a high of 412,990 troy ounces in 1981). The company
suspended mining in March 1993, laying off 70 percent of
its 1,300 employees. The average cost of production of gold in
1991 and 1992 was US$535 per ounce, compared with a selling
price of US$352. Revenue from gold and silver exports, which
had peaked at US$259.9 million in 1980, continued to
decline—except for a brief recovery in 1987—until it reached a
low of US$4.1 million in 1993. At that time, heavy losses caused
by low export prices forced the company to suspend production
for months. When Rosario suspended operations, it was in
debt for more than US$90 million. However, the mine
reopened in mid-1994 after renovation work financed by a foreign
bank loan of US$20 million was completed. The reopening
brought the year's exports up to US$19 million and
increased them to US$44 million in 1995. Although gold and
silver production in 1996 exceeded 117,625 troy ounces and
547,220 troy ounces, respectively, increasing export earnings to
US$49 million, Rosario operations remained unprofitable (see
table 8, Appendix). As of the late 1990s, the company continued
to seek more foreign investment to allow mining in the
lower sulfide zone.
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