Miners see calm prevailing as Nicaraguans head to the polls

Mining companies in Nicaragua are not expecting significant fallout from the forthcoming presidential elections despite fears over a potential flare-up of social unrest as the country slides towards more authoritarian government.

President Daniel Ortega (in photo) is expected to secure a fourth consecutive term in office in Sunday’s (Nov 7) vote, with opposition parties weakened by a string of arrests of leaders and supporters, which have been condemned by political chiefs in Europe and the US.

Despite concerns over the political environment, Nicaragua’s mining industry has expanded under Ortega, one of the leaders of the 1979 Sandinista revolution.

Gold is now the nation’s most valuable export and companies are advancing a string of projects expected to deliver around 300,000oz/y of additional production in the coming years.

“I don’t anticipate any significant impact as a consequence of the election process or what comes subsequently,” Calibre Mining CEO Darren Hall told an earnings call on Thursday.

Companies have operated under relatively stable conditions since mass anti-government protests broke out in 2018, in which about 300 people died.

Calibre – Nicaragua’s biggest gold producer, with the output focused around the Libertad and Limón mines – has enjoyed continued strong engagement with the Ortega regime, with new mineral concessions and exploration permits approved, Hall added, and the situation on the ground appears calm.

“We're not seeing business interruptions, the government continues to function as normal,” he said.

“The communities continue to get about their daily lives, so the impacts associated with the elections are de minimis at best and we're not anticipating any significant issues over the weekend, and life goes on.”

‘FAIRLY QUIET’

The view was mirrored by Mako Mining CEO Akiba Leisman.

“There are always some challenges,” Leisman told BNamericas.

“There was some pretty extensive social unrest in 2018, so everybody was nervous about a replay of that, but by all accounts Nicaragua has been fairly quiet over the course of the last few months leading up to the elections.”

While the company, which is planning to expand production around its current San Albino gold mine, which began operations earlier this year, maintains an apolitical stance, its key focus ahead of the polls is on its continued ability to do business in the country.

“From my perspective it really just matters how we can advance our projects and make sure our communities and assets are protected, and that we're given the support we need, and make sure we're good stewards and are contributing to the economy, and to all stakeholders involved; and for the last seven years I've been involved [in Nicaragua], that has been the case,” Leisman added.

SANCTIONS THREAT

Amid jitters over President Ortega’s increasingly autocratic style, the US government has threatened to ramp up its sanctions against his Sandinista national liberation front government, which could present additional challenges for mining companies operating in Nicaragua.

But Hall said he is ready to adapt to any new measures.

“We adjust. When those sanctions are placed, if we find that puts us in a situation where we're dealing with someone or an entity which is sanctioned by the US government, then we make the change and progress forward,” he said.

But other experts have expressed concern over the environment for businesses in Nicaragua if President Ortega wins another five-year term.

The political situation is ‘super unstable,’ Valeria Vásquez, Central America analyst for UK-based consultancy Control Risks, told BNamericas previously.

“For now there hasn’t been violence, protests or civil unrest, but we don’t know what will happen in November,” she said.

“Mining companies will need to think about whether it’s worth it staying in the country and keep investing in a country where there is no security, there is no legal security, there is no transparency and a lot of corruption.”

Other mining companies operating in Nicaragua include Hemco Nicaragua, a subsidiary of Colombia’s Mineros, and Condor Gold, which is advancing the La India gold project.