US sanctions against Nicaraguan gold industry

The US Treasury Department has imposed sanctions on the Directorate General of Mines (DGM) of the Nicaraguan Ministry of Energy and Mines (MEME).

The regime of Daniel Ortega and Rosario Murillo uses the institution to fund its authoritarian and destabilizing activities, the Treasury Department said in a statement.

The sanctions come under a new executive order that expands Treasury Department powers to hold the Ortega-Murillo regime accountable for its ongoing attacks on free speech.

“The Ortega-Murillo regime’s continued attacks on democratic actors and members of civil society, as well as the unjustified detention of political prisoners, show the regime’s disregard for the rule of law,” said Brian E. Nelson, Undersecretary of the Treasury Department for Terrorism and Financial Crimes.

According to Nelson, with the new sanctions, the US government is able to deprive the Ortega-Murillo regime of resources to further undermine democratic institutions in Nicaragua.

Former Nicaraguan opposition MP Eliseo Núñez, who lives in exile in Costa Rica, told Diálogo on November 8 that “the gold sanctions on Nicaragua involve two conceptual changes […] that Ortega is keen to take into account.”

The first is that they move from individual sanctions to institutional sanctions. This can have a much broader impact and impact, Núñez said. The second change is that the new executive order will allow sanctions to be imposed on other Nicaraguan economic institutions.

GENERAL DIRECTORATE OF MINING

DGM manages most of Nicaragua’s mining activities, bypassing sanctions the US imposed in June on state-owned Empresas Nicaragüenses de Minas, which was formed in 2017 to increase the state’s involvement in the gold business.

The Ortega-Murillo regime uses profits from the production and sale of gold to line its own pockets and stay in power, to intimidate and imprison those who denounce the regime’s corruption, and to quell instability in the country around the world, including by supporting Russia’s further invasion of Ukraine, the Treasury Ministry said.

Gold is Nicaragua’s largest source of foreign exchange. In 2021, the country exported a record 348,532 ounces [9.9 tons] of the metal. According to the Nicaraguan Central Bank and forecasts, it could be around 500,000 ounces [14 tons] by 2023.

Nicaragua has seven industrial mining operations with an existing capacity of 500 to 6,000 tons per day, according to Costa Rican law firm BLP, which specializes in Central American companies, in a September blog post.

There are currently about 160 metal and 130 non-metal mining concessions granted by the regime. In addition, around 100 concession applications are pending, a clear sign that the sector continues to expand in Nicaragua.

The Ortega-Murillo regime has also awarded mining concessions in indigenous lands without consulting the communities whose lands are at stake, in flagrant violation of Nicaraguan and international law.

With information from latinapress