What will happen with the mine to end contracts with Falcondo?

The Dominican state may soon regain control over the Quisqueya I nickel mining site, as the Superior Administrative Tribunal (TSA) has ruled to terminate the nearly seventy-year-old contract with Falconbridge Dominicana (Falcondo).

The tribunal's decision cited the "general interest" affected by the site's inactivity and Falcondo's failure to submit required semi-annual and annual reports to the General Directorate of Mines. These omissions constitute a "flagrant breach" of articles 70 and 72 of the Mining Law 146-71, which mandates regular reporting and prohibits leaving a concession inactive for more than two consecutive years. The court's ruling was based on "rescission" due to non-compliance, rather than damages caused.

“

It is premature to talk about another concession because Falcondo has an appeal instance. The decision of the Restructuring and Liquidation Court should come quickly after the TSA ruling.

However, the resumption of ferronickel exploitation activities is not yet guaranteed. Falcondo has the right to appeal the TSA's decision. Furthermore, the company's own future is in question, as it is undergoing a restructuring or liquidation process due to financial conditions that led to the suspension of operations on November 17, 2023. A ruling on this separate matter is pending in Santiago.

José Eurípides Florentino Rodríguez, president of the State Shareholding Fund (Fonper), emphasized that the state retains its rights as a shareholder, irrespective of the ongoing commercial restructuring. While Falcondo's president, Gaetan Butcher, could not be reached for comment on whether an appeal would be filed, the legal team representing Fonper hailed the TSA's decision as a "step of great significance" for the Dominican State, potentially allowing it to reclaim control over valuable public mining assets.

“

Once the decision becomes final and the corresponding legal procedures are met, the State will be able to determine the fate of these deposits in accordance with the applicable legal framework and the best interests of the country.