Haiti may sit on billions in precious metals

TROU DU NORD, Haiti -- Its capital is blighted with earthquake rubble. Its countryside is shorn of trees, chopped down for fuel. And yet, Haiti's land may hold the key to relieving centuries of poverty, disaster and disease: There is gold hidden in its hills -- and silver and copper, too.

A flurry of exploratory drilling in the past year has found precious metals worth potentially $20 billion deep below the tropical ridges in the country's northeastern mountains. Now, a mining company is drilling around the clock to determine how to get those metals out.

In neighboring Dominican Republic, workers are to start mining the other side of this seam later this year in one of the world's largest gold deposits: 23 million ounces worth about $40 billion.

A key to sustainability

The Haitian government's annual budget is $1 billion, more than half provided by foreign assistance. A windfall of locally produced wealth could pay for roads, schools, clean water and sewage systems for the nation's 10 million people, most of whom live on as little as $1.25 a day.

"If the mining companies are honest and if Haiti has a good government, then here is a way for this country to move forward," said Bureau of Mines Director Dieuseul Anglade.

"The gold in the mountains belongs to the people of Haiti," he said. "And they need it."

Haiti's geological vulnerability is also its promise. Massive tectonic plates squeeze the island with horrifying consequences, but deep cracks between them form convenient veins for gold, silver and copper pushed up from the hot innards of the planet. Prospectors from California to Chile know earthquake faults often have, quite literally, a golden lining.

Until now, few Haitians have known about this buried treasure. Mining camps are unmarked, and the work is being done miles up dirt roads near remote villages. But U.S. and Canadian investors have spent more than $30 million in recent years on everything from exploratory drilling to camps for workers, new roads, offices and laboratory studies of samples. Actual mining could be under way in five years.

"When I first heard whispers of this, I said, 'Gold mines? There could be gold mines in Haiti?' " said Michel Lamarre, a Haitian engineer whose firm, SOMINE, is leading the exploration. "I truly believe this is our answer to taking care of ourselves instead of constantly living on donations."

A wealth of metals

Geologists estimate at least 1 million ounces of gold at two sites. Last month, prospectors found the first significant silver ever reported in Haiti: between 20 million and 30 million ounces. And in the end, it may be copper that is the most lucrative: geologists suspect that more than 1 million tons lay in just one of many areas under exploration.

The prices of precious metals have been volatile in recent years, with copper selling for about $8,000 per ton, silver at $30 an ounce, and gold at $1,600 per ounce.

"Ultimately, I think mining is going to dwarf anything else in Haiti," says Michael Fulp, an Albuquerque-based geologist who visited the drill sites. "Usually you've got about a one-in-1,000 chance of making a mine from the exploratory stage, but those odds are much better in Haiti because of the lack of any previous modern-day exploration, and very, very promising samples."

In the 1970s, United Nations geologists documented significant pockets of gold and copper, but foreigners weren't willing to risk their cash in a country where corruption and instability have long discouraged outside investment.

Ironically, it was only after the 2010 earthquake that investors saw real opportunity.

Three firms are considering mining in Haiti, but so far only SOMINE has full concessions to take the metals out of the mountains. In exchange for minimal permit fees, SOMINE committed to spend $2.25 million in the first two years. In addition, it will pay $1.8 million after a feasibility study, according to the contract.

Bottom line: Haitians should get $1 out of every $2 of profits, compared with about $1 out of $3 that most countries get from mining firms.

Risks remain

Discoveries of rich resources -- whether diamonds, oil or gold -- often prompt great economic booms but come with great risk of environmental, health and social problems.Though the contractual terms are generous for Haiti, there is plenty to be cautious about. Haiti's government is repeatedly rated as one of the most corrupt in the world. The mines would ostensibly be regulated by government officials responsible for enforcing environmental, mining and corporate laws, but at this point there are no plans or budgets to hire them.

Further, open pit mines, common around the world, are craterlike holes made up of massive terraced steps that drop thousands of feet into the ground. When the resources are exhausted, usually after about 25 years, the pits can be refilled or converted into reservoirs. In many cases, the mines leave serious problems -- environmental contamination, displaced communities and mountaintops torn asunder.

But for now, the hundreds of jobs, the new roads and the community investment in a country where two out of three people have no formal employment is much appreciated.

Stone cutter Joseph Bernard, 47, says that before he got a job slicing rock samples, his family was going hungry. They had one cow. Their peanut and bean fields had gone to dust after months without rain.

Today, his wife has launched a business selling seeds, and his son and two daughters have started school.

"I found a job, but many didn't," he said, wiping a trickle of sweat from his deeply lined cheeks after a recent shift. "If more companies come, more people will work."