Canadian mining company Barrick Gold Corp. will reopen a formerly state-owned mine in the central Dominican Republic, the company and the Caribbean country's president said Wednesday.
Barrick plans to spend about US$2.6 billion (euro1.7 billion) on the Pueblo Viejo mine in what will be the largest private investment in Dominican history, President Leonel Fernandez said.
A Barrick spokesman said construction will cost about $2.7 billion (euro1.8 billion) over three and a half years and operations would begin in 2011.
The company and government have agreed in principle to share the cost of cleaning up acid-filled rivers and fields of mineral waste left behind by a Dominican state-run company's previous activity at the site, Barrick spokesman Vince Borg told The Associated Press.
Details about paying for the cleanup, which Barrick estimates will cost at least US$100 million (euro67 million), are still to be worked out, Borg said.
Barrick estimates that the mine will yield 20.4 million ounces of gold, along with more than 400 million pounds of copper and more than 100 million ounces of silver.
The mine, located in pine-filled mountains north of the Dominican capital, Santo Domingo, will be built with a 40 percent stake by Vancouver-based Goldcorp Inc.
Fernandez announced the project during his annual Independence Day address to Congress, his last before facing re-election in May.
"This will be the largest investment ever realized in the history of the Dominican Republic," Fernandez said to applause.
Barrick President and CEO Greg Wilkins praised the decision in a statement.
"We are very pleased with the progress made by our employees, our partner Goldcorp Inc., and importantly, the Government of the Dominican Republic," Wilkins said.
Barrick, the world's largest gold mining company, estimates it will create 3,500 construction jobs and 1,000 mining positions over the 25-year life of the project.
Nearly nine year after the state-run Rosario Dominicano company stopped work there, the site's two pits remain exposed. Acid run-off has killed off the fish in the valley below.
The Dominican government said last year it would have to borrow money from international lenders to contribute to the cleanup.
The project faces other logistical hurdles as well. Barrick estimated that up to 1,000 people will have to be compensated for lost property or homes as a result of new construction.
Associated Press writer Jonathan M. Katz contributed to this report from Port-au-Prince, Haiti.