The DR’s attractive geology and the success of mining majors on the island will continue to attract exploration activity. However, if the economic benefits of mining are not more widely shared and understood, the lack of national support for the industry will undermine future mine development. As a result, pre-investment risks to mining must be thoroughly analyzed in the Dominican Republic.
For instance, consider the current climate: the DR’s president, Luis Abinader, is lauded for his pro-business stance and improvements of government transparency. But he must navigate a COVID-devastated economy through recovery. Therefore, no one expects Santo Domingo to loosen its purse strings and start sharing more royalties with local mining communities — which leaves miners vulnerable to community opposition.
Miners looking to thrive in the DR must focus their charm offensive locally. The industry more broadly would benefit from a national program designed to educate the public as to the benefits that mining royalties provide. CSR, government relations, and PR budgets are the key to keeping the DR a pro-mining jurisdiction. However, the challenge is in knowing how to craft these strategies — and this requires an understanding of the impact of political risk in capital budgeting in the Dominican Republic.
AMI’s 2022 Latin America Mining Risk Index is a free resource that allows miners and investors to measure and compare political interference, economic pressure, and legal and regulatory instability risks across the region’s leading mining jurisdictions. The ultimate benefit will be to harmonize their project due diligence, risk mitigation analysis, and community opposition intelligence.
Please click below to learn more about this unique report, the first to quantify mining risk in Latin America, and learn more about how it can help you in evaluating pre-investment risk to mining in the Dominican Republic and Latin America.