THE WORLD'S largest gold mining producer Barrick Gold Corp announced this week that it has agreed to changes to its lease for the Pueblo Viejo mine in the Dominican Republic, which it operates. The changes will lead to the country's government receiving more revenue from the mine.
Under the terms of the original lease the mine, which is 60% owned by Barrick and 40% owned by Goldcorp Inc., would only have begun generating net-profits tax for the government – the largest potential revenue stream – after the owners had recovered their investment and made a 10% return on it.
Under the new lease, cash flows from the mine will be split equally between the owners and the government between 2013 and 2016.
"This would result in tax revenues to the government of approximately $2.2 billion over this period at a gold price of $1600per ounce," said a statement published by both Barrick and Goldcorp on their websites.
"Both parties understand that this agreement will guarantee a fair distribution of benefits," said Domincan presidential minister Gustavo Montalvo.
Barrick announced last month that it was cancelling at least half a billion Dollars' worth of planned spending on major projects this year.