While the Daniel Ortega-Rosario Murillo regime reorganizes the mining industry by canceling concessions to local companies under the pretext of abandonment and inactivity, China continues to increase its influence in the sector and gain terrain, independent Nicaraguan news site Confidencial reported.
“The reorganization is to benefit new companies in the mining sector and establish new concessions,” Amaru Ruiz, president of the River Foundation, a Nicaraguan nongovernmental organization (NGO) that oversees these activities, told Diálogo on June 22. “We still have to wait [to see] how those cancelled concessions will be reconfigured. But definitely, the reorganization is to benefit new protagonists at the convenience of the dictatorship, and the new actors on the scene are Chinese companies.”
The Ministry of Energy and Mines granted 13 plots of land to Chinese companies Zhong Fu Development S.A.; Thomas Metal S.A.; and Nicaragua XinXin Linze Minera Group S.A., between October 2023 and April 2024. The concessions include exclusivity rights for 25 years, during which time these companies will be able to explore, exploit, and establish plants to process mineral resources.
“The accelerated concession of mining areas to Chinese companies under the Ortega-Murillo regime reflects a strategy of expansion and control in Nicaragua’s mining sector,” mining publication Outlet Minero reported. “While this represents an economic opportunity, it also poses significant challenges in terms of environmental sustainability and labor rights for affected communities.”
For example, Nicaragua XinXin Linze Minera Group S.A. won more than 37,000 hectares for exploration and mining in 2024 alone. In February they began building their work camps in the municipality of Mulukukú, on the Northern Caribbean Coast. The company is still awaiting a response for two more concession applications. The first on a 2,091-hectare plot of land; and the second on a 3,628-hectare property, Nicaraguan news site Onda Local reported.
Chinese mining companies continue to affect the environment in their extractive activities, taking advantage of local elites to operate in their natural resources, even in protected natural areas, said researchers who in late May took part in the regional forum Power and Populist Prestige: The Environmental Impact of the Chinese Presence in Central America, organized by investigative magazine Expediente Abierto, in Guatemala’s Rafael Landívar University.
“What they do is a model of looting and plundering of the country’s material goods with very little return in favor of the local economy and the most vulnerable communities, as in the case of indigenous peoples,” Ruiz said. “What we see is the same practice with these Asian actors, which will increase because of the history of the Chinese model of little transparency and respect for environmental and social standards, which [these indigenous people] still maintain with much effort.”
Cancelations and sanctions
The Ministry of Energy and Mines recently cancelled five local mining concessions, according to administrative resolutions published on June 12 and 13 in Nicaragua’s official gazette. These cancellations stem from a mining concession review program, related to a reorganization of the mining sector for the benefit of the regime, Nicaraguan news site Despacho 505 reported on June 13.
On May 15, the U.S. Treasury Department’s Office of Foreign Assets Control sanctioned two mining companies in Nicaragua, prohibiting U.S. citizens from transacting with them and blocking any assets held in the United States.
“The Treasury Department’s sanctions show how there is a brokering between the state-owned Nicaraguan Mining Company, companies linked to the regime, and Chinese-funded companies that settle on the national territory,” Ruiz said. “That is a clear example of the way in which they are embedded in the country.”
According to Nicaraguan independent investigative news site Nicaragua Investiga, raw gold is among Nicaragua’s three main export categories, with $448.5 million exported in the first four months of 2024, compared to $347.3 million during the same period in 2023.
