UPDATE 1-Gold shipment detained by Dominican Republic -Barrick

Thu Mar 14, 2013 1:50pm EDT

* Canadian gold company in customs hold up

* Dominican official cites documentation problem

* President has said country wants more benefits from gold project

March 14 (Reuters) - Barrick Gold Corp, the world's largest gold miner, said on Thursday that a shipment of gold from its Pueblo Viejo mine in the Dominican Republic had been detained by customs officials in the Caribbean nation.

The delay comes just weeks after Dominican President Danilo Medina demanded that the company renegotiate its operating contract for the rich gold mine and threatened to clamp a windfall tax on profits if the contract was not modified.

Toronto-based Barrick said in a statement it was investigating the cause of the delay and seeking confirmation that the shipment can resume. It gave no further details.

Fernando Fernandez, director of customs in the Dominican Republic, said the shipment was halted because of a problem with documentation.

"When it is resolved, the shipment will go out," he told reporters.

Pueblo Viejo, one of world's largest new gold projects, is jointly owned by Barrick and Canada's second largest gold miner, Goldcorp Inc.

On Feb. 27, in a speech marking the 169th anniversary of the Dominican Republic's independence, Medina said the terms of the contract with the two Canadian miners were unacceptable and demanded more benefits from the mine. The contract was negotiated before Medina took office last August.

The government is seeking a bigger share of profit from the project, which is expected to produce more than 1 million ounces a year over its first five years of full production.

Gold prices have climbed sharply in recent years, and that has led to rise in public pressure on governments around the world to demand more benefits from mining companies, regardless of contracts already in place.

Barrick said it continues to talk with the Dominican Republic government and has long maintained a good working partnership with the country.

Pueblo Viejo recently achieved commercial production, with ramp-up to full production capacity expected in the second half of 2013. The mine cost some $3.7 billion to build.

Barrick's 60 percent share of output this year is expected to be 500,000 ounces to 650,000 ounces, while Goldcorp's 40 percent share is seen at between 330,000 and 435,000 ounces.

Barrick's shares were up 0.34 percent at C$29.41 at midday on the Toronto Stock Exchange, while Goldcorp's shares rose 0.48 percent to C$33.23.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.