Ortega Grants Chinese Company a Huge Mining Concession

Erlin Jose Valdivia, mayor of Mulukuku, together with representatives of the Chinese company XinXin Linze. Photo from the Mulukuku mayor’s office.

By Confidencial

HAVANA TIMES – On World Earth Day, April 22nd, the regime of Daniel Ortega officially awarded a Chinese company a 25-year concession to mine 36,610 hectares of land in the municipalities of Siuna and Mulukukuu. Despite this large area now set aside for mining in Nicaragua’s North Caribbean Autonomous Region, the project has undergone no known environmental impact studies.

The concession was awarded to the company called “Nicaragua Xinxin Linze Mining Group,” represented by Edward Xiang Liu. The concession is: “for the exploitation of metallic and non-metallic minerals in the zone called Nuevo Bijagual, with an area of (…) 36,610 hectares,” according to the Ministry of Energy and Mines’ official certification published in La Gaceta, the Nicaraguan government Gazette.

According to the certification signed by Estela Martinez, Ministry of Energy and Mines vice minister, the concession was granted after fulfillment of “all the cadastral requirements of the law [establishment of exact boundaries],” and after consultation with the Regional Council of the North Caribbean Coast, which gave its approval (..) on February 16, 2024.”

The Nicaragua Xinxin Linze Mining Group “has at hand the required documents indicating their financial and technical capability to develop and carry out the mining activities within their concession,” the Ministry of Energy and Mines notice asserted.

In exchange for the concession, the Nicaragua Xinxin Linze Mining Group will pay the Nicaraguan government US 0.25 cents for every hectare in the first year, a quantity that will gradually be increased until it reaches 12 dollars/hectare on the eleventh year.

In addition, the government will receive 3% of the value of the extracted substances, for the rights to extraction and royalties.

Environmental studies unknown

Regarding this mining concession, environmentalist Amaru Ruiz, director of the outlawed NGO Fundacion del Rio [“River Foundation”]. pointed out that there are no known environmental impact studies. According to Nicaragua’s Law for Access to Public Information, the company should have presented these reports to the regime’s authorities, who would then make them available to the public.

“We have no knowledge or information about the presentation of those studies; nor if [those over 36,000 hectares] are located on indigenous lands or not; nor the endorsements they have received for the project; nor the results of the [required] preliminary open and informed consultation,” Ruiz indicated.

The environmentalist also expressed concern that, since it is a Chinese company, the environmental and labor standards could be inferior to the standards applied by other mining companies with concessions in Nicaragua.

“In the case of China, it’s known that historically they’ve maintained very low environmental and labor standards. That increases the worries about the impact [this project] could have on the environment and also on the people who work for the company,” Ruiz stressed.

The Indigenous Peoples and Afro-descendents Platform has denounced the concessions, declaring that they comprise an “expanding of extractivism and the creation of conditions for greater violence, colonialization and genocide of the people who inhabit these territories in the Moskitia.”

“The significance of the advance of extractivism lies in the fact that it represents an existential threat to the culture of the indigenous peoples and Afro-descendants, by being imposed against their will and leading to their persecution and expulsion through different forms of violence in case of their opposition,” the Platform denounced in July 2023.

23% of Nicaraguan territory now under concession or proposed concession

Data from the Nicaraguan Ministry of Energy and Mines reveals that as of March 1, 2024, a total of 2,778,081 hectares [10,726.2 square miles], equal to 23.3% of Nicaragua’s national territory, have either been granted in concessions or are being requested for mining concessions.

The area already under concession for metallic and non-metallic exploitation is 1,977,769.18 hectares, or 16% of the national territory. This new concession awarded to the Nicaragua Xinxin Linze Mining Group means that the country will easily surpass two million hectares given over to mining exploitation.

At the same time, another 800,312 hectares have been requested for mining, equal to an additional 6.7% of the national territory. Of that area, 788,897 hectares are for metals exploitation and 11,414 hectares have been requested for non-metallic mining.

In October 2022, the US Treasury Department sanctioned Nicaragua’s General Directorate of Mining, for being the instrument utilized by the Ortega regime to develop the mining sector, thus evading the US sanctions imposed on the state’s, Nicaraguan Mining Company (Eniminas) in June 2022.

The US treasury Department also accused the Nicaraguan authorities of utilizing the profits from the production and sale of gold to “oppress the Nicaraguan people,” and even to “support the Russian invasion of Ukraine.”

Between January and November 2023, Nicaraguan exports of raw gold were sold for $1.036 billion dollars, according to official statistics of the Nicaraguan Central Bank, published in January 2024. That makes gold now Nicaragua’s most lucrative export product.

Regime exploring new markets

Nicaragua Xinxin Linze Mining Group isn’t the first Chinese company authorized by the regime for mineral exploitation in Nicaragua. In July 2023, a concession involving two tracts of land totaling 15,400 hectares was awarded to the Chinese company Zhong Fu Development S.A., a subsidiary of the Zhong Fu Invest Group, with their main offices in Beijing, China, according to information from the Bilwi [Puerto Cabezas] Mayor’s office in Nicaragua’s Autonomous North Caribbean Region.

In November 2023, the Ministry of Energy and Mines awarded a second mining concession to the Zhong Fu Development Company, a plot with an area of 1,200 hectares located in the municipalities of Cinco Pinos and Santo Tomas del Norte in Nicaragua’s northwestern department of Chinandega.

Ruiz, from the Fundacion del Rio, believes the presence of Chinese business owners in Nicaraguan mining is part of the Ortega regime’s strategy to evade the US sanctions.

The regime is “seeking other markets,” the environmentalist remarked. In addition, “the interest in having Chinese companies come as part of a strategy to gradually change the market and have access to the Asian market for its gold.”

Read more from Nicaragua here on Havana Times.