On the one hand, a dictatorship looking for easy profits and alternatives to alleviate the chaotic economic situation that it itself created. On the other, another dictatorship, hungry for resources that the other side can and wants to offer.
Allies, the authoritarian regimes of Nicaragua and China are intensifying a new front of partnership: mining concessions.
At the end of May, the newspaper Confidencial published a report that showed that in an interval of just six months, between October 2023 and April this year, three Chinese companies were awarded 13 mining concessions in the Central American country.
These lots correspond to almost 12% of the total area granted for this type of exploration in Nicaraguan territory.
Highlighting the atmosphere of camaraderie, these concessions – all valid for 25 years – were approved at a rapid pace, between just two and eight months after being requested, and Chinese companies are still awaiting responses to three other requests to explore areas for mining.
In addition to bringing money into the pockets of Daniel Ortega’s dictatorship, this partnership also helps Nicaragua to circumvent international sanctions.
Zhong Fu Development took over a concession from the Nicaraguan Compañía Minera Internacional (Comintsa), shortly before it became the target in May of sanctions from the United States Treasury Department, which accused it of being “affiliated” with the Sandinista regime and being involved in “ corrupt operations.”
In an interview with Confidencial, the president of the NGO Fundación del Río, Amaru Ruíz, said that Chinese action could further increase environmental and social degradation in mining areas in Nicaragua.
“In the case of China, it is historically known that its environmental and labor standards are very low. This increases concern about the impact they can have on the environment and also on the people who participate in these projects”, warned Ruiz.
During a public hearing held in November last year by the Inter-American Commission on Human Rights (IACHR), the Fundación del Río denounced that 23% of Nicaragua’s territory was occupied by mining concessions, many of which had illegal operations.
At the time, Ruíz said that the Sandinista dictatorship promoted a veritable wave of concessions since Daniel Ortega returned to power in 2007: from that year until the date of the hearing, there had been 114 concessions.
Ruíz reported that 79 of them were located in Bosawás, the second largest tropical forest in the Americas, behind only the Amazon.
In the Indio Maíz Forest Reserve, located in the southeast of the country and the second largest in Nicaragua, there are also mining sites, “despite the extraction of metals being prohibited in both reserves,” said the president of Fundación del Río. Ruíz reported that 30% of Nicaraguan gold was mined illegally.
China has been aggressively increasing its reserves of the metal, with the likely goals of reducing exposure to the dollar and guarding against likely sanctions from the West when it invades Taiwan.
Between 2019 and 2023, Nicaragua’s total gold exports grew 226.5%, according to data from the Central Bank. Judging by Chinese gluttony, the rain of money in Ortega’s coffers is not likely to stop anytime soon.
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