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Story Publication logo May 30, 2012

Haiti's Rush for Gold Gives Mining Firms a Free Rein Over the Riches


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Haiti’s north is rich with mineral deposits that could infuse millions into the nation’s ailing...

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Manise Joseph, 16, looks for gold. People in the village of Lakwev in northeast Haiti have been digging for gold since the 1960s. Image by Ben Depp. Haiti, 2012.

A gold rush is shaping up in Haiti's north. Some – like the new prime minister – say the $20 billion worth of copper, silver and gold buried in the country's hills could help Haiti escape its dependency on foreign aid and rebuild from the devastating 2010 earthquake.

In a nation with unemployment as high as 70%, where more than half the population lives on less than $1 a day, and where most of the government's budget is paid for with foreign assistance, the buried treasure sounds like El Dorado. Speaking at the Senate this month, the international telecommunications entrepreneur Laurent Lamothe said: "Our subsoil is rich in minerals. Now is the time to dig them up."

But many are nervous that the mines will be boom for foreign investors and bust for local communities and the state coffers. Licences are being awarded behind the closed doors of a government whose slogan is "Haiti is open for business".

In the hamlet of Lakwèv near the border with the Dominican Republic, about 50 families live in mostly dirt-floored wattle and daub huts. Only half of the families can afford to send their children to school. "It's usually a couple of big white guys, with a couple of Haitians," explains Arnolt Jean, 49, who lives in one of the few concrete homes in the hillside community. "They don't even ask you who owns what land. They come, they take big chunks of earth, put them in their knapsacks and leave. We Haitians all just watch, because we can't do anything about it."

Lakwèv – where families grow coffee and cassava and dig their own mines to supplement their meagre incomes – is one of dozens of spots that mining companies have staked out. More than a third of Haiti's north – at least 1,500 sq km – is under licence to US and Canadian companies. Eurasian Minerals has acquired 53 licences and collected more than 44,000 samples. The junior explorer firm recently teamed up with the world's No. 2 gold producer, US-based Newmont Mining.

On a radio program, the Eurasian Minerals president David Cole boasted about Haiti: "We control over 1,100 square miles of real estate", while investor Mickey Fulp wrote: "It is obvious there is substantial geopolitical risk in Haiti. But the geology is just so damn good."

With a pro-business government and about 10,000 UN peacekeepers stationed around the country, the risk in today's Haiti is minimal, and the price of gold has been at or above $1,500 an ounce for more than a year. Mining companies say they have spent $30 million digging, drilling and testing the deposits of mostly "alluvial" or "invisible" gold that are part of the same mineralisation belt that holds the largest gold reserve in the Americas – the Pueblo Viejo mine in the Dominican Republic. This year, Barrick and Goldcorp will begin producing at the newly refurbished pit mine, going after what they claim is at least another 23.7 million ounces of gold and 141.8 million ounces of silver.

The companies lining up to dig pit mines in Haiti – Newmont, Majescor, and VCS Mining – have so far been working with little government oversight. At a recent meeting held in his new office – the old one was destroyed in the earthquake – the former director of Haiti's mining agency, Dieuseul Anglade, was apologetic. "The government doesn't give us the means to supervise the companies," the geologist said. "Most of our budget goes to salaries. We don't really have an operating budget."

A January audit of the budget showed that only five of the agency's 17 vehicles were working. Of the 100 employees, only one-quarter have university degrees, 13% are technicians and the rest are support staff. Scores of mining licences and drill sites, often located several hours' walk from the nearest road, go unsupervised.

"We have competent staff at the mining agency, but they don't have the means to carry out their jobs," says former environmental minister Yves-André Wainwright. The agronomist is worried about the dangers of pit mining, which often uses mercury and cyanide. Some of the areas under licence play "an important biodiversity role and need to be protected," he says.

Haiti has not signed the convention concerning safety and health in mines, or the voluntary Extractive Industries Transparency Initiative. The country ranks 175 out of 200 on Transparency International's corruption index.

In April, Eurasian told shareholders a Memorandum of Understanding (MOU) would "accelerate the advancement of drill-ready prospects". Haiti's former finance minister, Ronald Baudin, who became a consultant to Newmont after leaving public service, called the MOU "a waiver" to current law. Haiti's 1976 mining legislation says no drilling can take place without a signed mining convention. Baudin qualified the law as "out of date".

"The government is conscious of what damage they are doing to the company. They have camps all over the country, with important logistics, and they are blocked because the convention can't be signed," Baudin says.

When he was head of the state mining agency, Anglade says he refused to sign the "waiver". "I told them it was illegal and not in Haiti's interest," Anglade said in an interview in March. Head of the mining agency for almost two decades, Anglade was suddenly replaced when the new prime minister took office. According to a 25 May correspondence, Eurasian and Newmont appear to believe Anglade had signed the document.

Lamothe has promised to push through new mining legislation that assures "the right portion comes to the state", but he also noted that it would do so "[a]s much as possible without hampering also the revenue of the party, allowing them to do business".

If previous enterprises are any indication, there is good reason to worry about Haiti's gold rush. The experience of bauxite mining in the 50s and 60s suggests Haitians may not benefit from mineral extractions in their area, with little more than an eight-mile road, about 900 low-wage jobs and a few million dollars that went to the corrupt Duvalier dictatorship. Hundreds of families lost their land and the mining sites left scars that have yet to heal.

In Lakwèv, small children join their parents in dangerous homemade tunnels that burrow down 40 feet and then weave horizontally through the orange dirt. If they are lucky, a day's work might end with a few gold flecks. Once a week, gold traders from Haiti's cities and the Dominican Republic secretly buy their finds at less than half the market rate – about $700 an ounce. Surrounding fields are pitted with tunnels and the riverbeds run red with the panners' discarded dirt. There is no sign of any state presence – no mining agency staff, no mayor, no clinic. But there are little pink ribbons tied to trees and posts. "They had a machine that could detect where the deposits were. Every place they found gold, they made a sign," Jean explains,.

"Our country is poor, but what is underground could make us not poor any more," Jean says. "But since our wealth remains underground, it's the rich who come with their fancy equipment to dig it out. The people who live on top of the ground stay poor, while the rich get even richer."

• To read the entire series, visit Haiti Grassroots Watch. This article was made possible in part by a grant from the Pulitzer Center on Crisis Reporting


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