Costa Rica looking to roll back mining ban to open Crucitas gold mine

Costa Rican President Rodrigo Chaves announced that his administration is seeking to legalize open-pit mining by reversing a ban enacted 14 years ago in a country renowned globally for its environmental conservation and ecotourism.

“We're sitting on a gold mine,” the president said during a Wednesday press conference in San José, where the government revealed it had submitted bill 24,777 to the national assembly to lift the ban and start operations at a gold mine in the north of the country.

The gold deposit in question is located in Crucitas, approximately 200km north of San José, near the border with Nicaragua.

The proposed legislation is aimed at amending the mining code, granting an exception solely for this deposit, which could be auctioned off to one or more bidders, with a minimum royalty of 5% going to the State. Companies that have been penalized for environmental violations would be excluded from the bidding process.

At least 20% of the royalties would be allocated to infrastructure projects and environmental restoration efforts in San Carlos canton, where the proposed mine is located.

Crucitas was a site where Canadian company Infinito Gold had intended to establish an open-pit gold mine via its subsidiary, Industrias Infinito. However, its concessions were revoked following political measures taken in late 2010 to ban open-pit metal mining in Costa Rica.

Infinito launched arbitration against the Costa Rican state in March 2014 through the International Centre for Settlement of Investment Disputes (Icsid). The proceedings concluded in July this year, when the arbitration tribunal ruled against awarding damages to the company.

The day after the ruling was announced, the president stated that open-pit mining was among the options being considered to exploit the Crucitas gold deposit.

Renewed strategy for mining regulation

In early October, the Costa Rican government presented a strategy to the legislative assembly aimed at regulating gold exploration and production, minimizing environmental damage and addressing illegal gold mining in Crucitas.

The initiative was introduced by chief of staff Laura Fernández and other government officials. It included provisions for setting a minimum price per ounce for gold concessions to be auctioned to domestic and international companies.

BNamericas was unable to confirm whether the plan announced by Chaves corresponds to this earlier proposal or represents a new initiative. Nevertheless, the government’s decision could unlock the country’s mining potential, attract foreign investment, and improve the perception of this controversial industry.

On the same day, Salvadoran President Nayib Bukele criticized the blanket ban on mining in his country, calling it “absurd” and suggesting the industry could contribute a great deal to national economic and social development.

Additional legislative proposals

Aside from the government initiative, three other legal proposals related to mining regulation are also currently under discussion, local news outlet Delfino reported.

Since banning mining 14 years ago, illegal miners – known locally as coligalleros, mostly from neighboring Nicaragua – have been extracting gold from the Crucitas deposit and smuggling it out of the country. President Chaves confirmed that this activity was ongoing, adding that they have caused environmental damage.

Legislative proposal 24,577, was submitted by Jorge Antonio Rojas López, a legislator from the ruling Social Democratic Progress Party. It seeks to amend Article 8 bis of the mining code (law 6,797), which currently prohibits permits or concessions for open-pit metal mining, with the exception of exploration for scientific or research purposes. This bill is under review by the Alajuela province commission, according to Delfino.

Another proposal (24,675), was submitted by lawmakers Priscilla Vindas Salazar and Ariel Robles Barrantes from the Broad Front Party. It aims to restore the environment in areas impacted by illegal mining in Crucitas and establish a “development hub for the northern Huetar region,” which would promote sustainable economic activities, enabling local communities to generate income through low-impact utilization of resources.

The national system of conservation areas (Sinac) would be responsible for overseeing and managing the hub to ensure that the activities adhere to sustainability principles and respect the natural environment.

The proposal also includes recovering gold salvaged though the process of removing mercury, estimated at 145,645oz (currently worth approximately US$400mn), without resorting to open-pit mining. These funds would be supplemented by the US$600,000 environmental guarantee from Infinito Gold, international cooperation resources and national public funds.

The initiative suggests creating a trust, administered by Costa Rica's central bank, to finance basic infrastructure and development projects in the northern Huetar region.

Finally, independent legislator Kattia Cambronero Aguiluz introduced file 24,667, which proposes implementing sustainable artisanal mining practices in the districts of Cutris, Pocosol, and Pital in San Carlos canton. 

This bill aims to provide an alternative economic development opportunity for these communities through regulated small-scale artisanal mining, which is environmentally responsible and capable of generating local employment. It seeks to amend Articles 8 and 56 of the mining code.