Gold-rich Nicaragua hands Chinese miners rights to a tenth of its land

{"text":[[{"start":14.18,"text":"Nicaragua has handed mining concessions covering more than a tenth of its land to Chinese companies in the past three years, expanding Beijing’s foothold in the gold-rich country as it tussles with Washington for influence."}],[{"start":26.86,"text":"The Central American autocracy has awarded 80 concessions that together cover land roughly the size of Northern Ireland to Chinese miners since 2023, according to FT analysis of government data."}],[{"start":39.52,"text":"The concessions deepen China’s relationship with its closest partner in the region at a time when the US is expanding its reach into overseas mining and claiming dominance of the western hemisphere under the so-called ‘Donroe Doctrine’."}],[{"start":52.54,"text":"For Nicaraguan dictator Daniel Ortega, the mining concessions are part of projects designed to curry favour with Beijing, which include ports on its Pacific and Atlantic coasts and a major airport redevelopment."}],[{"start":64.62,"text":"While individuals in Ortega’s regime have been under US sanctions since 2017, China says its partnership with Nicaragua has enjoyed “tremendous development” since they re-established bilateral relations in 2021."}],[{"start":null,"text":""}],[{"start":77.02,"text":"Meanwhile Nicaragua has received more than $1bn in Chinese financing for infrastructure, energy and telecoms projects, and the Central American country has been very supportive of Beijing’s foreign policy. It was previously one of 15 countries worldwide that recognised Taiwan, but dropped that recognition in 2021."}],[{"start":96.3,"text":"“Each side gives the other what it needs,” said Javier Meléndez, director of Central American think-tank Expediente Abierto."}],[{"start":104.14,"text":"The relationship has been a tonic for Ortega, who has ruled Nicaragua for 30 of the past 50 years and faces increasing international isolation. The US first imposed sanctions over his internal repression in 2017 and pushed global institutions to stop giving Managua loans — a void Beijing has helped fill with financing deals."}],[{"start":124.92,"text":"Since 2023, 16 Chinese companies, mostly small and medium-sized, have won more new concessions than all other miners combined, Nicaraguan state data shows. The licences, which are not limited to specific metals or minerals, cover exploration and development of 1.4mn hectares, equivalent to 11 per cent of the country."}],[{"start":null,"text":"

"}],[{"start":145.34,"text":"Nicaragua is “highly” promising, “particularly for gold and to a certain extent for copper”, so “quite a bit is at stake” there in the global race for resources, said one western mining executive who has worked in the country."}],[{"start":158.26,"text":"China is the world’s largest gold producer and sees bullion as highly strategic because of its role as a central bank reserve asset."}],[{"start":165.38,"text":"“China is buying gold assets overseas in a big way,” said BMO analyst Helen Amos, estimating that Beijing has done about $18bn in public overseas deals in the precious metal since 2004."}],[{"start":178.58,"text":"But its companies’ push for expansion has often met resistance."}],[{"start":183.06,"text":"Nicaraguan non-profits say they are concerned about Chinese miners’ reputation for low environmental standards, particularly since Ortega has also gutted his country’s protections. Without the right safeguards, gold mining can cause damage through the use of arsenic or mercury to process the ore."}],[{"start":198.64,"text":"“The dismantling of the environmental legal system happened alongside the entry of Chinese mining companies,” said Amaru Ruiz, president of Fundación del Río, a Nicaraguan environmental non-profit. He noted some concessions also include indigenous land and protected reserves."}],[{"start":215.1,"text":"Gold mining is central to Nicaragua’s economy, providing more than a fifth of exports last year. Research consultancy Metals Focus estimates it has about 250 tonnes of gold resources in the ground."}],[{"start":null,"text":""}],[{"start":226.58,"text":"The country is particularly attractive to some miners as “a completely totalitarian state” that can restrict protests over pollution or labour rights, said Christopher Sabatini of Chatham House think-tank. “There are more gold deposits in places like Peru, but Nicaragua represents a compliant partner.”"}],[{"start":244.461,"text":"A US state department spokesperson told the FT it closely monitors Chinese activity in Nicaragua, including in mining where it sanctioned entities for enabling corruption and repression. The Trump administration’s strategy “makes clear we will deny non-Hemispheric competitors the ability to gain footholds or control strategic assets in our region”, they said in a statement."}],[{"start":264.94,"text":"Ortega’s co-president Rosario Murillo, who is also his wife, declined to comment in response to written questions about the concessions."}],[{"start":273.62,"text":"One western mining executive said there was a notable shift after the two countries repaired relations, with hotels in Nicaragua increasingly “occupied by Chinese and Russian guys” and licences not being given to non-Chinese companies."}],[{"start":287.9,"text":"Just one other foreign company has won significant concessions over that period: UK firm Metals Exploration, part-owned by developer Nick Candy, the treasurer of rightwing party Reform UK."}],[{"start":299.78,"text":"The largest gold producers in Nicaragua are western companies, including Canada’s Equinox Gold and Mako Mining plus Colombia’s Hemco, but they have not received significant new concessions in recent years."}],[{"start":null,"text":""}],[{"start":312.1,"text":"Chinese companies are involved in infrastructure projects including a $500mn upgrade of Punta Huete airport — formerly used for Soviet aircraft in the cold war — near the capital Managua and a major highway."}],[{"start":325.22,"text":"As the US tries to curb Beijing’s influence in the Panama Canal, Chinese companies are also working on ports on both Nicaragua’s coasts."}],[{"start":333.34,"text":"Evan Ellis, a professor at the US Army War College, said the China-Nicaragua relationship “introduces strategic concerns that the US has to look at” if it ever fights a war against the Asian nation."}],[{"start":345.74,"text":"China’s ambassador to the country recently told the head of Nicaragua’s armed forces that military co-operation was an “important part” of China-Nicaragua relations."}],[{"start":355.1,"text":"Ortega’s son Laureano Ortega, whom Washington sanctioned in 2019, has become central to the shift towards China and the main interlocutor between the mining sector and the government, said several people familiar with the matter."}],[{"start":368.78,"text":"Where the US has threatened further measures over Ortega’s constitutional changes to block opponents from standing in elections, China said it would “develop friendly ties with Nicaragua and other countries on the basis of mutual respect and win-win co-operation”."}],[{"start":384.02,"text":"China’s foreign ministry said it was unaware of the specifics of the mining licences but that it encourages Chinese companies abroad to co-operate for “win-win outcomes”. “We firmly oppose any attempt to politicise normal commercial co-operation or overstretch the concept of security,” it said."}],[{"start":400.9,"text":"Additional reporting by Alan Smith in London"}],[{"start":408.18,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790484433_1140.mp3"}