There's GOLD in them thar hills!

[Phrossack]

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 poised 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.

The Haitian government's annual budget is $1 billion, more than half provided by foreign assistance. The largest single source of foreign investment, $2 billion, came from Haitians working abroad last year. 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.

http://www.msnbc.msn.com/id/47398045/ns/world_news-americas/

I'm hopeful for Haiti, which desperately needs good news (and my brother's from there), but that last sentence is my big concern. Historically, when a poor country with a corrupt government is found to have a major resource deposit, bad things happen, namely foreign exploitation, massive corruption, and civil war.

 

[El_Machinae]

Well, part of the good news is that there's not much ecosystem to preserve, eh?

I think it could be a real boom, honestly. But it would have to be done without as much corruption as we've seen elsewhere. I wonder if the attention of Bill Clinton, and other famous do-gooders, will help keep the process honest?

 

[Lillefix]

They use cyanide in gold production don't they? I anticipate disaster...

 

[emzie]

I let out a guffaw at that last sentence.

 

[Babbler]

I knew it!

On a serious note, yeah I don't it's going to end well.

 

[innonimatu]

http://www.msnbc.msn.com/id/47398045/ns/world_news-americas/

In neighboring Dominican Republic, workers are poised 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.

You should worry about this sentence also! Valuable Resources straddling a badly-controlled border is a recipe for trouble.

 

[Smellincoffee]

This seems like yet another way for them to be exploited from the outside. Also, an abundance in a natural resource that, carefully used, could make them rich, doesn't mean they'll be able to solve their problems if the mining or managment is done in a corrupt fashion. I daresay once the oil era is over, the middle east will be no better off despite its decades of wealth.

 

[Joecoolyo]

This could either be really really good for them, or really really bad.

 

[History_Buff]

Won't go well. I also won't be surprised if it's a Canadian mining company that winds up swindling them out of their resources; we seem to be uniquely good at that.

 

[Cutlass]

Resource extraction like this might be better than nothing, but it rarely results in making the general public all that much better off.

 

[ArneHD]

For Haiti, this will simply bring down the resource curse. I really can see no other outcome. I wonder if that makes me a pessimist or a realist.

 

[Leoreth]

A windfall of locally produced wealth could pay for roads, schools, clean water and sewage systems for the nation's 10 million people.

Somehow I don't think this will happen.

 

[Trev]

Gold is an expensive metal to mine, it is always in pretty low concentrations in the ore, and therefore costs are high to refine it. Gold mines in Australia have gone bust from the high costs, so I cannot see how this could be a massive boon for Haiti unless gold prices soar a lot more, the high cost of extraction means the governments ability to tax royalties and income are not as high as most people would think.
In Australia the government is putting a supertax on miners to grab extra money, but the miners they have targeted are iron ore and coal miners, apparently not enough money in gold to go after gold miners.

 

[Phrossack]

I have a feeling that Haiti will always be poor.

 

[El_Machinae]

A resource boom really can be wealth-creating, though. It doesn't always have to fail

 

[Phrossack]

A resource boom really can be wealth-creating, though. It doesn't always have to fail

It seems to always bring disaster upon any country with a weak, corrupt government, though. Haiti has a weak, corrupt government and two centuries of almost unrelenting poverty and misery.

 

[emzie]

Well, if nothing else, mining companies would need to build up some infrastructure to get the gold out of the country.

 

[Oerdin]

This seems like yet another way for them to be exploited from the outside. Also, an abundance in a natural resource that, carefully used, could make them rich, doesn't mean they'll be able to solve their problems if the mining or managment is done in a corrupt fashion. I daresay once the oil era is over, the middle east will be no better off despite its decades of wealth.

No better off? Are you mad? Just go to Dubai to see the level of development which they've been able to achieve with that oil money. 50 years ago it literally was just empty desert now it's one of the world's greatest cities and even when the oil runs out the roads, cities, water plants, and all the other development will remain so it has clearly helped them develop.

 

[Cutlass]

No better off? Are you mad? Just go to Dubai to see the level of development which they've been able to achieve with that oil money. 50 years ago it literally was just empty desert now it's one of the world's greatest cities and even when the oil runs out the roads, cities, water plants, and all the other development will remain so it has clearly helped them develop.

1) Gold has a far lower return on investment than oil and gas.
2) Not all oil and gas are created equal, and the resources Dubai have are some of the best in the world.
3) Dubai has a small population compared to the value of the resource, Haiti has a large population compared to the value of the resource.
4) Most places with a windfall of income don't end up spending it on things which will have value in the future. To a large extent that's even true of Dubai. They've done better than most, and location has allowed them to build substantially on the starting capital from oil and gas. Most other oil and gas exporters are going to end up dirt poor once the resource is exhausted. So it's not really something you can say with certainty will cause them a great benefit.
5) The permanent corruption and government mismanagement of Haiti can destroy any advantage, even if they struck one of the world's great oil deposits.

 

[Ajidica]

If good oil was found in Hati, I think the US government would either decide there are terrorists in Hati or that nation-building was needed.