The one-month-old newly elected government of Honduras announced on Monday a mining moratorium on the country.
The Central American nation held its general elections in November 2021, which saw former First Lady Xiomara Castro winning as president with 51.12% of the votes. Castro, representing the left-wing political party Libre, ran on socialist rhetoric, which included a promise to limit mining in her election manifesto.
The mining moratorium, announced by the country’s Ministry of Energy, Natural Resources, Environment and Mines, includes canceling the approval of extraction permits and declaring the nation free of open-pit mining.
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“The approval of permits for extractive exploitation is cancelled [sic] due to being harmful to the state of Honduras, threatening natural resources, public health and because they limit access to water as a human right,” said the ministry in its statement.
The announcement also said that since it has placed “a mining moratorium for metallic and non-metallic exploration and extraction,” environmental licenses, permits, and concessions are expected to be reviewed, suspended, and canceled.
Castro administration also plans to take over the management of areas it deems to be of “high ecological value” to ensure their conservation.
It remains unclear, however, if this new mining policy only applies to new applications or will also take effect on current mining operations.
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Aura Minerals (TSX: ORA) owns and operates the San Andres mine located 360 kilometres from the country capital Tegucigalpa. The Canadian mining firm addressed the ministry’s announcement, saying it “does not expect any immediate effect on production” and it is currently working to understand the implications of the new mining policy.
The firm, which regularly faced protests from locals, produced 60,769 gold ounces out of the San Andres mine in 2020. According to its latest mineral resource estimate, the property holds 1.36 million gold ounces in the measured and indicated category.
Aura Minerals shares fell as much as 17% as the market opened today.
According to a report by the global resources watchdog Extractive Industries Transparency Initiative, mining contributes 0.2% of the country’s gross domestic product and comprises 4.6% of its exports. In 2018, the industry contributed 429 million lempiras (US$18.1 million).
According to data from Honduran central bank, the country’s mining export revenue totaled nearly US$130 million from silver, zinc, and lead–excluding gold revenues.
Information for this briefing was found via BBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
