NICARAGUA: Rights concerns over Chinese mining concessions
In October Nicaraguan civil rights groups expressed fresh concerns that Chinese mining firms are being allowed to operate in the country by the authoritarian government led by co-presidents Daniel Ortega and his wife, Rosario Murillo, without any respect for the environment or the rights of local indigenous communities. The warnings were sparked by the Ortega-Murillo administration’s awarding of significant new concessions to three Chinese firms with little transparency regarding concession terms, including what safeguards, if any, the firms would take to protect sensitive ecosystems or the indigenous communities within concession areas.
The statement issued on 9 October by Plataforma de Unidad por la Democracia (Pude), a grouping of organisations comprising Nicaraguan exiles and members of the diaspora, was in response to the government’s 30 September announcement that it had awarded four mining concessions totalling over 85,000 hectares (ha) to three Chinese firms – Zhong Fu Development S.A., Three Gold Coins Company S.A., and Norther Mining Company S.A. According to the Pude statement, since October 2023, eight Chinese companies have received over 20 mining concessions, without consultation nor free, prior, and informed consent from communities affected as per international legal norms. According to the statement, with the latest concessions, the government has ceded over 500,000 ha of Nicaraguan territory for “indiscriminate exploitation”.
Local rights groups have long flagged concerns that many of the concessions awarded to Chinese firms are adjacent to or overlap indigenous land, and that little public information has been provided as to whether these companies have conducted environmental impact assessments for their proposed activities in the concession areas.
Mining activity in Nicaragua is primarily focused on gold extraction, which is notorious for having significant negative environmental impacts including air pollution, water pollution, and soil erosion. Moreover, the cyanide typically used in large-scale gold mining operations to separate gold from ore often seeps into local water sources, causing considerable human health impacts.
In its statement, Pude argues that the government’s policies violate “the law on the communal property ownership of indigenous peoples and ethnic communities in Nicaragua’s Autonomous Atlantic Coast regions” – a reference to local legislation (Ley 445) passed in 2002 to guarantee the rights of communities in these regions regarding their communal lands as well as the administration of the natural resources within these lands.
The Pude statement also says that some of the Chinese mining concessions include areas within the Río San Juan Biosphere Reserve, a 1.39m ha area designated by the United Nations Educational, Scientific and Cultural Organization (Unesco), that comprises seven different protected areas in south-eastern Nicaragua on the border with Costa Rica. Indeed, local environmental groups have warned that the government has been weakening the legal framework that established natural protected areas in the country, in order to allow more mining activity.
Weakening environmental protections
A Nicaraguan environmental NGO, Fundación del Río, has denounced that with the approval in April of a new law on environmental conservation and sustainable development areas (Ley 1,248), the Ortega-Murillo government has effectively repealed a previous decree regulating protected areas. Ley 1,248 gives the government the power to redefine the boundaries of established protected areas and to allow more types of economic activities in them.
Based on these arguments, Pude demands the “immediate annulment of all illegally granted mining concessions and unrestricted respect for the territorial rights of indigenous peoples.” It also calls on the international community and human rights bodies in particular to condemn these rights violations by the Nicaraguan government and to “take concrete actions.”
Any actions by the international community would have to be carefully thought out however, as the imposition of economic sanctions and growing international isolation of the Ortega-Murillo government has made it more dependent on Chinese investment to drive domestic economic activity. Indeed, the rapid growth of Chinese mining firms began after the US imposed sanctions on Nicaragua’s state-owned mining firms in 2022 [EB-22-11].
Calibre Mining retreats
The growing presence of Chinese miners in Nicaragua comes as Western mining companies return their concessions, clearing the way for further Chinese expansion in the sector.
On 4 November, the Ortega-Murillo government announced that a Canadian-headquartered mining firm, Calibre Mining Nicaragua S.A., had decided to return to the state a 26,066 ha concession it had been awarded in Nicaragua’s North Atlantic autonomous region (Raan) in 2022.
According to the official gazette, which published the announcement, the company cited lack of investor interest in funding activity in the concession. This was the seventh concession that Calibre Mining, the largest mining concession holder in Nicaragua, had returned since 30 October citing the same reasons.
Calibre Mining’s retreat from Nicaragua has been attributed to rising frictions between the company and the Ortega-Murillo government over a tax rebate and suspected expropriation attempts. Notably, Nicaragua’s energy and mines ministry has stated that Calibre Mining’s relinquished concessions will become available to be awarded to other firms after a 30-day waiting period.
Expropriation attempt?
Calibre Mining’s dispute with the Nicaraguan government revolves around the latter’s refusal to allow it to claim a US$36.6m tax deduction. Concerns that the dispute could be part of an expropriation attempt stem from a 9 September decision by the energy and mining ministry (MEM) to forcibly assume control of a gold processing plant owned by a US firm, BHMB Mining Nicaragua, according to local press reports. The MEM reportedly justified the action by saying that BHMB had failed to pay taxes owed since December 2021. BHMB has filed appeals against the MEM’s decision, but these have been rejected. Observers speculate that the move against BHMB is part of a government campaign to force out Western mining firms and hand their assets over to Chinese companies.