New contract gives Barrick a green light to generate 215 MW
It will be in accordance with the General Electricity Law 125=01
Diario Libre
SANTO DOMINGO. According to what is stipulate in the amendments to the original contract, the Dominican state will grant a 40 year concession to the company of Pueblo Viejo Dominicana Corporation (PVDC)-Barrick Gold-for the construction, operation, maintenance and ownership of an electricity plant with a capacity to generate 215 megawatts.
This is Quisqueya I, whose construction was begun by Barrick in 2012 and that is waiting to begin operations this year. The generation facility has 12 engines, each capable of producing 18 megawatts, and together with a combined cycle steam turbine, they reach a total generation capacity of 215 MW which can work with either HFO (Heavy Fuel Oil) or natural gas.
The plant will have a private transmission line with a capacity of 230 KVA to carry the energy from San Pedro de Macoris.
The addendum allows Barrick to have complete liberty to supply itself with electricity, but they will be subject to the obligations established in the General Electricity Law (125-01) and the Regulations for the application of this legislation with regard to any electricity company or wholesaler on the electricity market.
"The purpose of the PVDC transmission line is to supply electricity to the mine, permit PVDC to put Quisqueya I into service, sell excess electricity as a self-producer through the SENI (National Interconnected Electric System) and/or buy electricity for the project," says the document.
The amendment claims that with the purpose of allowing the transmission of a greater amount of energy, Pueblo Viejo will permit the Electricity Generating Enterprise Haina S.A. (Ege-Haina) to use any transmission capacity available of the transmission line that is not used by the project.
"The length of the concession granted in this act to PVDC is for forty (40) years, starting with the effective date. This period can be extended according to the provisions of the General Electricity Law. The sale of excess electricity by PVDC will in no way affect the private character of the PVDC transmission lines," stressed the agreement.
In the same way, the state will provide facilities to the mining company for the construction of a secondary transmission line of 345 KV or 138 KV in order to connect the mine with the SENI.
"In relation to the Systems of Electricity Generation, each one of these will be exempt from the payment of all taxes, tributes, and tariffs on asset and fuels and raw materials, contributions applicable to non-regulated customers or electricity generators and any other tribute, tariff, right or contribution that could result from the generation and purchase of electricity, including municipal contributions and taxes, technical services, other contributions and any rate, technical tariff and transmission toll applicable to the PVDC transmission line, without prejudice to the foreseen obligations."says the agreement.
The environment
According to the amendments, the state has the obligation to reimburse Barrick US$4.5 million in order to pay for the cost of the operations of environmental maintenance, during the initial period.
Likewise, the state and the mining company will agree on procedures for exporting in accordance with the international practices, as well as establish mechanisms for verifying the merchandise at the mine and in the ports where it is exported.
In addition, they authorize the advance of US$47,406,700 which correspond to the payment of state obligations which they took on.
Some US$501.9 million not recognized.
The new contract contemplates the non-acceptance for determining Income Tax or the Participation of Net Earnings, of US$501,906,830 that have been the object of differences between the state and Barrick. Of this money, US$143.1 million are for the deduction findings in audits, in the previous costs of the acquisition of the project, and US$150 million of the percentage or the investments carried out by the mining company, for the lack of engineering on details in the feasibility study and that allowed changed in the design of the plan for supplying electric energy to the mine.
This is Quisqueya I, whose construction was begun by Barrick in 2012 and that is waiting to begin operations this year. The generation facility has 12 engines, each capable of producing 18 megawatts, and together with a combined cycle steam turbine, they reach a total generation capacity of 215 MW which can work with either HFO (Heavy Fuel Oil) or natural gas.
The plant will have a private transmission line with a capacity of 230 KVA to carry the energy from San Pedro de Macoris.
The addendum allows Barrick to have complete liberty to supply itself with electricity, but they will be subject to the obligations established in the General Electricity Law (125-01) and the Regulations for the application of this legislation with regard to any electricity company or wholesaler on the electricity market.
"The purpose of the PVDC transmission line is to supply electricity to the mine, permit PVDC to put Quisqueya I into service, sell excess electricity as a self-producer through the SENI (National Interconnected Electric System) and/or buy electricity for the project," says the document.
The amendment claims that with the purpose of allowing the transmission of a greater amount of energy, Pueblo Viejo will permit the Electricity Generating Enterprise Haina S.A. (Ege-Haina) to use any transmission capacity available of the transmission line that is not used by the project.
"The length of the concession granted in this act to PVDC is for forty (40) years, starting with the effective date. This period can be extended according to the provisions of the General Electricity Law. The sale of excess electricity by PVDC will in no way affect the private character of the PVDC transmission lines," stressed the agreement.
In the same way, the state will provide facilities to the mining company for the construction of a secondary transmission line of 345 KV or 138 KV in order to connect the mine with the SENI.
"In relation to the Systems of Electricity Generation, each one of these will be exempt from the payment of all taxes, tributes, and tariffs on asset and fuels and raw materials, contributions applicable to non-regulated customers or electricity generators and any other tribute, tariff, right or contribution that could result from the generation and purchase of electricity, including municipal contributions and taxes, technical services, other contributions and any rate, technical tariff and transmission toll applicable to the PVDC transmission line, without prejudice to the foreseen obligations."says the agreement.
The environment
According to the amendments, the state has the obligation to reimburse Barrick US$4.5 million in order to pay for the cost of the operations of environmental maintenance, during the initial period.
Likewise, the state and the mining company will agree on procedures for exporting in accordance with the international practices, as well as establish mechanisms for verifying the merchandise at the mine and in the ports where it is exported.
In addition, they authorize the advance of US$47,406,700 which correspond to the payment of state obligations which they took on.
Some US$501.9 million not recognized.
The new contract contemplates the non-acceptance for determining Income Tax or the Participation of Net Earnings, of US$501,906,830 that have been the object of differences between the state and Barrick. Of this money, US$143.1 million are for the deduction findings in audits, in the previous costs of the acquisition of the project, and US$150 million of the percentage or the investments carried out by the mining company, for the lack of engineering on details in the feasibility study and that allowed changed in the design of the plan for supplying electric energy to the mine.
Diario Libre
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