Nicaragua tipped for US$1bn gold exports in 2022

Nicaragua’s gold mining industry is tipped to reach a major milestone next year, with exports forecast to grow to US$1bn despite global outcry over a shift to dictatorship under President Daniel Ortega.

The mining sector has experienced a period of stability under Ortega, with a string of foreign-owned firms investing in growth projects in the Central American nation over recent years.

And further expansion is expected next year when the former revolutionary leader will embark on a record fourth consecutive five-year term in office, following victory in November’s presidential election, which world leaders denounced as rigged.

US President Joe Biden accused Ortega and his wife, vice president Rosario Murillo, of orchestrating a pantomime election, marred by the imprisonment of almost 40 opposition figures since may, including seven potential presidential candidates, and blocking the participation of opposition parties.

Both the US and the EU imposed sanctions against the Ortega family in the build-up to the election.

GOLD GROWTH

Despite these measures, Nicaragua’s gold mining sector is expected to continue on its growth trajectory in 2022, according to industry chamber Caminic.

“We are going to continue investing in new exploration and projects that will allow us to reach US$1bn in exports, providing income and quality jobs in mining communities,” Caminic president Sergio Murillo was quoted as saying by local television network Vos TV at an end-of-year event.

Gold exports in 2021 are on track to come in around 499,000oz, he added, worth some US$870mn, up around 38% from last year.

Data from export regulator Cetrex shows gold shipments were worth US$807mn in January-November, up 34.6% from the same period last year. Average prices increased 3%.

Gold has cemented its place as Nicaragua’s most valuable export after surpassing beef in 2020, following rises in volumes and prices.

PROJECT PROGRESS

The US$1bn export milestone will be achieved in part through investments in projects by companies including Calibre Mining, Hemco Nicaragua, Plantel Los Ángeles and Mako Mining, Murillo said.

BNamericas has identified projects – some of which have started operations – capable of delivering more than 300,000oz/y gold, which would nearly double the nation’s output from 2019 levels.

These include Canada-based Calibre’s Pavón Norte and Eastern Borosi projects, with ore production from the former surpassing the target 1,000t/d three months earlier than planned in September.

Mako Mining, another Canadian company, has also reached commercial production at its San Albino operation, and has plans to expand operations in its Nicaraguan concessions.

Hemco Nicaragua, a subsidiary of Colombia’s Mineros, has also forecast growth from its Bonanza mine, while UK-based Condor Gold is advancing its La India project, with work on a feasibility study underway.

MINING SAFE HAVEN?

Despite criticism of Ortega’s increasingly authoritarian rule, Nicaragua offers many benefits, according to mining companies, including positive relations with the government.

“We have got a strong, transparent mining-friendly jurisdiction [in Nicaragua]. It’s got a proud history. It understands the value mining can bring,” Calibre CEO Darren Hall told BNamericas in July.

Ortega has also made it clear to Hall that his administration has no plans to nationalize mines – a step which failed in the 1970s.

Since 2014, the government has granted 274 mineral concessions covering around 988,000ha, with a further 120 applications pending, relating to 1.93Mha, local daily La Voz de Guanacaste reported, citing data from the energy and mines ministry (MEM).

Export promotion agency PRONicaragua said around 49% of the country is available for mineral concessions.

And mining firms have so far been correct in their predictions that the November polls would not spark a fresh uprising of social unrest.

Anti-government protests broke out in 2018, with around 300 people killed in clashes with security forces.

But some experts warn the country’s unstable political situation poses significant risks for miners.

“Mining companies will need to think about whether it’s worth staying in the country and keep investing in a country where there is no security, there is no legal security, there is not transparency and a lot of corruption,” Valeria Vásquez, Central America analyst for UK-based consultancy Control Risks, told BNamericas previously.