Nicaragua Grants First Open-Pit Mining Lease to China

Nicaragua’s communist regime awarded its first open-pit mining lease to a Chinese company, state media confirmed on Tuesday, further granting China control of the country’s mineral resources.

The lease is the latest on a growing list of roughly 15 mining leases that communist dictator Daniel Ortega has awarded China since October 2023. The contracts, often signed outside the scope of legal processes, have granted China significant control of Nicaragua’s gold, the country’s top export.

La Gaceta, the official newspaper of the Nicaraguan regime, published on Tuesday the Nicaraguan Energy and Mines Ministry agreement that awards a 25-year mining lease to China’s Nicaragua Xinxin Linze Minería Group company for “the exploitation of metallic and non-metallic minerals” in Rio Dorado, a more than 3,600-hectare plot located in the municipality of San Juan del Limay, Estelí. The 25-year lease is effective from the moment of its official publication on Tuesday.

In exchange, the Chinese company will have to pay the Ortega regime two annual payments of $0.25 per hectare for the first year. The amount will progressively increase to $12 per hectare from the lease’s tenth year onward. The Chinese company will also have to pay the Ortega regime three percent of the value of the extracted minerals in extraction rights fees.

According to the agreement, Nicaragua Xinxin Linze Minería Group is represented by a Chinese national identified as Edward Xiang Liu. The Chinese company has reportedly been awarded nearly 43,000 hectares worth of mining leases since February 2024.

Some of the areas that the leases to Nicaragua Xinxin Linze Minería Group cover include territory that belongs to Nicaragua’s North Caribbean Coast Autonomous Region, an area mostly inhabited by the Miskitos and Mayangnas indigenous communities.

The Nicaraguan newspaper Confidencial reported on Tuesday that, with the latest mining lease, Nicaragua granted 15 mining concessions to three Chinese companies between October 2023 and August 2024 that total more than 234,496.31 hectares. Similarly to the recently granted lease, each mining lease is valid for 25 years, and the three Chinese companies enjoy exclusivity rights for the exploration, exploitation, and establishment of processing plants for mining materials.

Since January 2022, Ortega has forced Nicaragua to rapidly accept a swell of favorable business for China after he had the country join China’s predatory Belt and Road Initiative (BRI) debt trap program. Ortega also signed a “lifeboat” Free Trade Agreement with China that went into effect in January 2024.

Ortega’s rapid embrace of China began one month after Nicaragua broke ties with Taiwan in December 2021, adopting communist China’s “One-China Principle,” which falsely claims the sovereign nation of Taiwan as a province of China.

Some of the agreements — which grant China a significant amount of influence in Nicaragua’s resources and infrastructure — include numerous gold mining leases to Chinese companies awarded in an expedited manner and without undergoing the corresponding due processes or environmental studies.

Ortega has also begun to borrow more money from China for infrastructure projects, including a $400 million loan for the renovation of an abandoned military airport near the capital city of Managua that the Sandinistas built in the 1980s with the assistance of Cuba’s communist Castro regime and the Soviet Union. Ortega aims to turn the old facility into Nicaragua’s second international airport.

Daniel Ortega, in his ongoing “weaponization” of migration against the United States, has allowed hundreds of thousands of migrants to pass through Nicaragua on their route to the U.S. southern border.

The communist dictator’s tactics have allowed Managua’s airport — presently the country’s only international airport — to experience profits that have erased more than ten years of financial losses for the regime’s airport authority.

Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.