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Harmful mining continues in Nicaragua despite U.S. sanctions, new investigation shows

  • The U.S. imposed sanctions against Nicaragua in 2022 but numerous mines are still operating like normal or even expanding, according to a new report from the Oakland Institute, a think tank dealing with social and environmental issues.
  • Despite the sanctions, the U.S. was Nicaragua’s largest gold importer last year, bringing in around $465 million.
  • Expanding mining concessions has resulted in pollution and human rights violations against Indigenous communities.

U.S. sanctions imposed in 2022 against Nicaragua’s mining industry were supposed to help combat a bloody wave of human rights abuses against local communities. But several years later, some aspects of the sanctions still aren’t being enforced, allowing mining companies to continue operations and even expand into new parts of the country.

Numerous mines are still operating like normal, according to a new report from the Oakland Institute, a think tank focused on social and environmental issues, contributing to escalating violence against Indigenous communities and the destruction of ancestral land.

“The Biden administration talks a big game about using targeted sanctions to hold human rights violators accountable in Nicaragua, but the Treasury Department lets the worst of these actors off the hook,” said report co-author Josh Mayer, an Oakland Institute fellow, in a press release.

The Treasury Department announced sanctions against state-owned mining company Empresa Nicaragüense de Minas (ENIMIENAS) in June 2022, saying it was “using gold revenue to continue to oppress the people of Nicaragua.” A few months later, President Biden used executive order 14088 to expand the sanctions to all individuals and companies operating in Nicaragua’s gold sector.

In theory, that meant anyone mining in Nicaragua was blocked from accessing financial entities in the U.S., including properties, capital and banking services. But sanctions have been historically hard to enforce and ineffective as a foreign policy tool.

Last year, the U.S. was the country’s largest gold importer, bringing in around $465 million between January 2023 and July 2023, according to Nicaragua’s Central Bank. The U.S. Treasury Department didn’t respond to a request for comment.

Between 2021 and 2023, the amount of Nicaraguan land concessioned for mining more than doubled, from 923,681 hectares (2,282,465 acres) to 1.8 million hectares (4,447,896 acres), according to the Ministry of Energy and Mines. Mining concessions now take up around 15% of the country’s total land area. The Ministry didn’t respond to a request for comment.

“This is something that we’ve been speaking out about a lot,” said Amaru Ruiz, head of Fundación Del Río, an organization that monitors land invasions and environmental issues in Nicaragua’s reserves and autonomous zones. “There’s been an increase in concessions in Nicaragua. The Ortega-Murillo regime has granted more concessions than ever before.”

Homes destroyed in the Wilú Indigenous community. (Photo courtesy of Oakland Institute)

Ruiz said industrial mining is largely done without adhering to basic environmental and public health regulations, like waste disposal and toxic chemical storage. They also don’t carry out prior consultation, a process in which a mining company meets with residents and lays out the parameters of a project before breaking ground. Nicaragua is part of an international treaty that requires prior consultation to be carried out.

Industrial concessions also attract artisanal mining by non-Indigenous Nicaraguans, known locally as colonos. They tend to relocate from other parts of the country and settle in autonomous regions belonging to Indigenous communities, in some cases resorting to violence to keep a hold on the area.

Artisanal miners often work with industrial mills to process gold, meaning there is a direct relationship between international companies and the land invaders committing human rights violations against Indigenous communities, Ruiz said. However, it has not been confirmed which companies work with which artisanal miners.

“There’s an important link between artisanal mining and industrial mining and that has consequences,” he said.

Indigenous communities in the Mayangna Sauni As territory on the Caribbean coast reported at least nine murders and nine kidnappings between January and July 2023, multiple injuries and the burning of one community, according to the Oakland Institute’s report.

One of the largest mining companies in Nicaragua is Calibre, a Canadian mining company susceptible to sanctions because it operates numerous subsidiaries in the U.S. Since the sanctions against ENIMIENAS were announced, the company has obtained 11 additional concessions totaling 336,598 hectares (831,751 acres), according to the report.

Calibre didn’t respond to a request for comment for this article. But it told Oakland Institute that it purchases ore from artisanal miners who meet legal and traceability requirements, and not from artisanal miners working inside Indigenous territories.

The company also has 15 pending concession requests totaling 445,655 hectares (1,101,237 acres). If granted, it would give the company over 1.6 million hectares (3,953,686 acres) of Nicaraguan land, according to the report.

The company has several U.S. shareholders, including mining company B2Gold, equity firm Invesco, investment firm Van Eck Associates and mining company ASA Gold and Precious Metals. None of the companies responded to a request for comment for this article.

Other connections to Nicaragua mining include U.S. investment firm BlackRock’s shares in Grupo Mineros through an index fund, according to the report. BlackRock didn’t respond to a request for comment.

“Given the control that multinational mining companies like Calibre and their investors yield on Nicaragua’s gold mining sector, the Biden administration must take immediate action to enforce Executive Order 14088, especially considering that the U.S. remains the primary destination for Nicaraguan gold exports,” the report said.

Banner image: A cloud forest in Nicaragua. Photo courtesy of Elena/Flickr.

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