The Mineral Industries of the Islands of the Caribbean in 2012
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2012 Minerals Yearbook ISLANDS OF THE CARIBBEAN U.S. Department of the Interior February 2015 U.S. Geological Survey THE MINERAL INDUSTRIES OF THE ISLANDS OF THE CARIBBEAN ARUBA, CUBA, DOMINICAN REPUBLIC, JAMAICA, TRINIDAD AND TOBAGO, AND OTHER ISLANDS By Susan Wacaster The economies of the island nations of the Caribbean vary in ElUniversal.com, 2012, PetroChina seeks to buy Aruba refinery to facilitate terms of their magnitude and resiliency, but all are sensitive to deals with Pdvsa: ElUniversal.com, May 10. (Accessed May 14, 2013, at http://www.eluniversal.com/economia/120510/petrochina-seeks-to-buy- the economic variability and economic projections of relatively aruba-refinery-to-facilitate-deals-with-pdvsa.) more advanced economies. According to the Economic Reuters, 2012, UPDATE 2—Valero to convert Aruba refinery to product Commission for Latin America and the Caribbean (ECLAC), terminal: Thomson Reuters, September 3. (Accessed October 14, 2012, at the economies of the Caribbean region as a whole grew by http://www.reuters.com/article/2012/09/04/refinery-operations-valero-aruba- idUSL2E8K30XA20120904.) 3.2% in 2012 compared with the overall growth rate in 2011. Selected countries of the Caribbean that were identified in the analysis included Antigua & Barbuda, The Bahamas, Barbados, CUBA Dominica, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincente and the Grenadines, and Trinidad & Tobago. The economies In 2012, Cuba was estimated to be the world’s sixth-ranked of the Caribbean remained sluggish as such globally economic producer of cobalt (as a byproduct of nickel processing) and the problems as the continued financial crisis in the euro area, ninth-ranked producer of nickel. Other mineral commodities shrinking economic growth in Japan and the United Kingdom, produced in Cuba included asphalt, bentonite, cement, feldspar, and the uncertainty brought about by the fiscal cliff debates gypsum, iron ore, kaolinite, lime, limestone, marble, natural in the United States negatively affected tourism and external gas, nitrogen, crude petroleum, and petroleum refinery products. demand for goods produced in the Caribbean. The ECLAC By yearend, the René Ramos Latourt plant located in Nicaro, estimated that the economy of the Caribbean as a whole would which was the oldest of the country’s three nickel plants, was grow by 1.1% in 2012 and would expand by 2.0% in 2013 closed. Production at the plant had reportedly dwindled in compared with the group’s previous forecasts of 1.6% and recent yearss to a few thousand tons per year of unrefined nickel 2.2%, respectively. and byproduct cobalt. The two remaining plants included one at the Moa Bay operation—a joint venture between Sherritt International Corp. of Canada and state-owned Cubaniquel— ARUBA and another at the Punta Gorda Mine, which was wholly owned by Cubaniquel (Frank, 2012). As of August 2012, China’s state-run oil company PetroChina Co. Ltd. concluded an “agreement in principle” Minerals in National Economy with Valero Energy Corp. (Valero) to purchase the idled Aruba refinery. This was the second time in 2 years that the Chinese The estimated real gross domestic product (GDP) growth company had discussed purchasing the plant; however, no rate in Cuba was 3.0% in 2012, and production from Cuban deal had been finalized. The refinery, which processed heavy mines and quarries in 2012 accounted for 0.6% of the GDP. crude petroleum, had become unprofitable to operate because Associated sectors of Cuba’s economy, including industrial it relied on fuel oil rather than the less expensive natural manufacturing (excluding the sugar industry), construction, gas. PetroChina established an agreement with Venezuela’s and the sector composed of electricity, gas, and water, state-run oil company Petróleos de Venezuela S.A. (PDVSA) however, accounted for 14.2%, 5.4%, and 1.7%, respectively (China’s fourth-ranked crude oil supplier) for PDVSA to supply (Oficina Nacional de Estadística e Información, 2013, p. 17). PetroChina with heavy crude. The refinery had previously accounted for about one-third of Aruba’s economy; it was idled Production in 2010 because of low profit margins, and was expected to be Production data for many mineral commodities produced functioning primarily as a storage terminal by the end of 2012 in Cuba, as well as for other countries of the Caribbean, are (table 1; ElUniversal.com, 2012; Reuters, 2012; Argus Media, not available on an annual basis. Estimates of production Ltd., 2013). that may represent a significant change in volume percent in References Cited 2012 compared with that of 2011 were made, in some cases, by looking at trends of data that extend to years prior to the Argus Media, Ltd., 2013, PetroChina’s Aruba refinery deal awaits Beijing’s OK: period covered in this report. Large variations in production of Argus Media, Ltd. (Accessed May 2, 2013, at http://www.argusmedia.com/ industrial minerals and construction materials are common in pages/NewsBody.aspx?id=810848&menu=yes.) ISLANDS OF THE CARIbbean—2012 11.1 many countries and tend to reflect macroeconomic trends but Oficina Nacional de Estadística e Información, 2012, Annuario Estadístico de also may reflect the variability of domestic demand. In some Cuba 2011—Sector Externo: Oficina Nacional de Estadistica e Informacion. (Accessed May 5, 2013, at http://www.one.cu/aec2011.htm.) cases, an estimate was made when a percentage increase or Oficina Nacional de Estadística e Información, 2013, Panorama económica decrease of a commodity’s production relative to 2011 was y social Cuba 2012: Havana, Cuba, Oficina Nacional de Estadística e known, although the exact production total was not given. Data Información, 48 p. on mineral production are in table 1. DOMINICAN REPUBLIC Structure of the Mineral Industry The Dominican Republic’s real GDP increased by 3.9% in Table 2 is a list of major mineral industry facilities. 2012 compared with a growth rate of 4.5% in 2011. The positive Mineral Trade (although decreased) growth was primarily attributable to growth in sectors that produced beverages and tobacco (9.3%), Venezuela was Cuba’s leading trade partner in terms of value energy and water (7.3%), financial services (7.3%), sugar in 2011 (the most recent year for which data were available) (5.1%), and agricultural products (4.1%). The inflation rate was followed by China, Canada, and Spain. Cuba was a net importer 3.9% compared with 7.8% in 2011, and the rate of foreign direct in 2011 with total exports valued at about $261 million and investment (FDI) increased by 58.7% in 2012 compared with imports valued at about $603 million. Cuba’s trade deficit had an increase of 25% in 2011. FDI was directed primarily towards begun to increase significantly in the early- and mid-2000s. commerce, manufacturing, mining and energy, and real estate In 2008, the trade deficit increased drastically to about (Banco Central de la República Dominicana, 2012, p. 9). $450 million, or by 65.3% compared with that of 2007 as the In February 2012, Glencore International plc of Canada global economic recession was underway; in the 2 years before announced a merger by which Glencore would acquire the and after 2007, however, the trade deficit was relatively stable 65.92% of Xstrata plc of Switzerland that it did not already at an average value of about $270 million. The deficit increased own to form Glencore-Xstrata plc, which was headquartered in in 2011 to about $342 million, or by 29% compared with that of Switzerland. The merger resulted in a new ownership regime 2010 (Oficina Nacional de Estadistíca e Informacion, 2012). at the Falconbridge Dominicana C. por A. (Falcondo) nickel At the same time that the trade deficit was expanding, the operation in Bonao, including Glencore-Xstrata (85.3%), volume of mineral industry exports was variable, and reflected the Government of the Dominican Republic (10%), global economic trends. Available data since 2006 indicate Franco-Nevada Corp. of the United States (4.1%), and a that the mineral commodity price boom of the mid-2000s private interest (0.6%). led to a 55% increase in mineral commodity exports (which The Dominican Republic was estimated to be the world’s included cobalt, nickel, crude petroleum, and petroleum 12th-ranked nickel-producing country in 2012. Xstrata Nickel refinery products) in 2007 to about $90 million (or 46% of total (a subsidiary of Glencore-Xstrata) had halted operations at exports) compared with those of 2006. By 2009, the value of Falcondo in 2010 because of high energy costs and diminished mineral exports had decreased to just $36 million (or 29% of market conditions. The facility restarted production in 2011, and total exports) as the effects of the global economic recession during 2012, the facility operated at about 50% of capacity. The were felt. By 2011, the value of mineral exports had increased largest mining project in the Dominican Republic in 2012 was by 23% compared with that of 2010 to about $61 million; Pueblo Viejo Dominicana Corp.’s Pueblo Viejo gold and silver that value was still only 23% of total exports, however, mine (Barrick Gold Corp., 60%, and Goldcorp Inc., 40%, both which indicates that the value of mineral commodities traded of Canada). Commercial production at the mine started in the had increased relative to other goods (Oficina Nacional de third quarter of 2012 (Kuck, 2013). Estadistíca e Informacion, 2012). Minerals in the National Economy Outlook The year-on-year value contributed to the GDP from the mining and quarrying sector increased by 42% in 2012 Cuba’s economic growth in 2013 was expected to remain compared with 79.7% in 2011. The large increase between constant at 3.0%. The closures of the Nicaro nickel mine 2010 and 2011 was a result of the restarting the Falcondo and plant was not expected to have a significant effect on the nickel operation.