Symbolic Sanctions

Symbolic Sanctions

US Targets Nicaraguan Gold but Leaves Worst Actors Untouched
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On May 15, 2024, the US Treasury Department sanctioned two Nicaraguan gold companies, Compañía Minera Internacional (COMINTSA) and Capital Mining Investment Nicaragua (“Capital Mining”), claiming that they are bringing in revenue for the Ortega-Murillo regime and are engaging in “corrupt practices.” 1 

The sanctions were carried out under Executive Order 13851 2 signed by President Donald Trump in 2018, which authorized sanctions against individuals deemed complicit in government repression of democracy and human rights in Nicaragua. 3 Subsequently, in June 2022, the US Treasury Department sanctioned Nicaragua’s state-owned mining company, Empresa Nicaragüense de Minas (ENIMINAS). 4 The US Treasury Department’s May 2024 sanctions against COMINTSA and Capital Mining are also the result of Executive Order 14088, signed by President Joe Biden in October 2022, expanding sanctions to include all entities with financial ties to the United States involved in Nicaragua’s gold sector, 5 arguing that gold revenues are enabling the Ortega-Murillo regime’s continued stranglehold over Nicaraguan democracy and civil society. 6 Executive Order 14088 also led to sanctions against the General Directorate of Mines (DGM) in October 2022. 7 

Until May 2024, as previously reported by the Oakland Institute, the sanctions authorized by Executive Order 14088 had not been imposed on any foreign entities, despite the existence of clear violators such as the Canada-based Calibre Mining Corporation, which owns several mines in the United States and US subsidiaries and whose primary investors include US-based asset management giants. 8 In July 2023, Fundacion del Rio, a Nicaraguan environmental organization, denounced the approval of five concessions for Calibre in the South Caribbean Coast Autonomous Region of Nicaragua comprising of 226,083 hectares (ha) – almost the size of the Indio Maiz Biological Reserve size. 9 Calibre is reported to have worked closely with the Ortega regime to push through the Pavon mine project against the will of local communities. 10 Bishop Rolando José Álvarez Lagos of Matagalpa, who accompanied the peasants in their protest, was placed under house arrest in August 2022. In February 2023, the Ortega-Murillo regime declared him a traitor, stripped him of his citizenship, and sentenced him to 26 years in prison. In January 2024, Bishop Álvarez was expelled from Nicaragua and exiled to Vatican City.

“Pavon is the poster child of how morally bankrupted Canadian mining companies are willing to say and do anything to remain in the good graces of a dictatorship as long as there’s a bit of money to be made.” 11 

In part because of the failure to enforce these sanctions, Nicaragua’s gold rush has continued largely unimpeded. Nicaragua exported US$1.13 billions of gold in 2023, with almost 64 percent of it going to the United States. 12 In 2022, Calibre alone accounted for 35 percent of all Nicaraguan gold exports. 13 

Victim of the Wilu Massacre, March 2023

Nicaragua’s gold rush, largely driven by North American companies and financiers, has inflicted a wave of environmental destruction and violence against Indigenous and Afro-descendant Peoples. They have faced massacres, rape, serious injuries, forced displacement, the destruction of food and water sources, kidnapping and arbitrary detention, and other grave harms at the hands of colono artisanal miners and law enforcement conspiring to deprive them of their land to extract the gold wealth beneath. 14 Hundreds of Indigenous Miskitu people have had to flee their territories and seek refuge in Costa Rica or the United States. 15 As of October 2024, the Nicaraguan government is holding three Indigenous Miskitu political leaders and eight Indigenous Mayangna forest rangers in detention in retaliation for their efforts to protect their territories from colonization. 16 

With the May 2024 sanctions designations, the US Treasury Department chose to not sanction Calibre Mining or any other North American interests and to instead target two relatively small mining companies, COMINTSA and Capital Mining, which it says are affiliated with the Ortega-Murillo regime. 17 This reflects a lack of serious action to confront the drivers of violence and dispossession that are devastating Indigenous and Afro-descendant Peoples in Nicaragua.

Until the US Treasury Department truly enforces its sanctions on all corporations driving violence against Nicaragua’s Indigenous and Afro-descendant communities and financing the dictatorial Ortega-Murillo regime, Executive Order 14088 will be nothing more than a smokescreen to punish individual competitors of the US mining and financial interests instead of serving as a tool to pursue democracy and human rights that Washington claims to stand for. Meanwhile, Indigenous and Afro-descendant Peoples continue to suffer horrific violence, arbitrary detention, dispossession, displacement, and forced exile at the hands of gold miners and the Ortega-Murillo regime.

COMINTSA: An Intermediary for the Ortega-Murillo Regime

According to the US Treasury and local media, Compañía Minera Internacional (COMINTSA) is owned by Nicaraguan Minister of Energy and Mines (MEM) Salvador Mansell Castrillo, 18 previously sanctioned by the US Treasury in November 2021. 19 

MEM Minister Salvador Mansell
MEM Minister Salvador Mansell, invited to an interview with a Nicaraguan TV channel. Source: Empresa Nacional de Transmisión Eléctrica

Little is known about COMINTSA’s origins, but the earliest records of the company appear to be two letters from April 12, 2021, in which Ye Planet, a company that was once incorporated in the state of California 20 and which has a Mexican subsidiary 21 dedicated to iron mining, 22 expressed interest to MEM Minister Mansell and General Director of Mines Norman Henríquez Blandón in investing in Nicaragua alongside COMINTSA. 23 Between April and June 2021, COMINTSA formally requested three mining concessions in Nicaragua: Tutuwaka, covering some 6,000 hectares (ha); La Reyna II, comprising 4,132 ha; and El Ocote, with an expanse of 1,369 ha. 24 

All three requests were granted between April and June 2022. 25 Shortly thereafter, MEM rejected a concession request from a company owned by US citizen Randy Martin and instead granted it to COMINTSA. 26 Largely unknown to the public, COMINTSA became the subject of public and media speculation as it began accumulating concessions. As Nicaraguan newspaper La Prensa put it in 2022, “in the established mining industry nobody knows the mining company, and what little people know about it they prefer not to say for fear of reprisals.” 27 

COMINTSA has actually served as an intermediary for the Ortega-Murillo regime to deliver mining concessions to Chinese mining companies. 28 In April 2024, COMINTSA transferred its rights to the Tutuwaka concession to Zhong Fu Development S.A.. 29 

The presence of Chinese mining companies in Nicaragua has markedly increased in recent months. Between October 2023 and April 2024, three Chinese mining companies – Zhong Fu Development S.A., Thomas Metal S.A., and Nicaragua XinXin Linze Minera Group S.A. – received 13 metallic mining concessions from the Ortega government. 30 As of July 1, 2024, these three companies had been granted 14 concessions totaling 230,868 ha – 12 percent of all land granted in metallic mining concessions in Nicaragua. 31 These include a concession approved to Nicaragua XinXin Linze Minera Group S.A. on May 16, 2024 32 – the day after the US Treasury Department’s sanctions on COMINTSA and Capital Mining. The timing of this action indicates that the Ortega-Murillo regime has been largely undeterred by Washington’s targeted sanctions on the country’s gold sector.

Amid the threat of US sanctions on Nicaragua’s gold sector, the rise of Chinese mining companies since 2023 is allegedly part of an Ortega-Murillo regime effort to reorganize the country’s gold industry by increasing exports to China and decreasing its dependence on the US market. 33 This reportedly aligns with the Chinese government’s priority of diversifying its reserves with gold. 34 That said, as noted by Amaru Ruiz, Director of the human rights and environmentalist organization Fundación del Río, Chinese mining companies “are in the process of setting up their plants and operations, in other words, they are not at the export level.” 35 The US remains the top export destination for Nicaraguan gold, with 64 percent of Nicaraguan gold exports arriving in the United States in 2023. 36 Still, it appears the Ortega-Murillo regime has made headway on its goal to decrease reliance on exports to the US, as this figure is down from over 96 percent in 2021 and 2022 37 and 100 percent from 2016 to 2020. 38 

According to official records from MEM, COMINTSA now controls two 25-year concessions covering a combined 5,501 ha: La Reyna II (4,132 ha) and El Ocote, comprising 1,369 ha. 39 Through the El Ocote concession, the Ortega-Murillo regime is supporting artisanal mining operations in the North Caribbean Coast Autonomous Region. As previously reported by the Oakland Institute and others, artisanal mining in that region is driving violent displacement of Indigenous and Afro-descendant communities and causing environmental ruin. 40 

CAPITAL MINING: Another Intermediary to Boost Profits for the Ortega-Murillo Regime

According to the US Treasury Department and Nicaraguan media, Capital Mining Investment Nicaragua (“Capital Mining”) is also controlled by MEM Minister Mansell as well as by Laureano Ortega Murillo, 41 son of President Daniel Ortega and Vice President Rosario Murillo. The company, according to its since-deleted Facebook page, extracts gold, silver, copper, zinc, iron, coal, oil, natural gas, and industrial minerals. 42 The company’s exploits in gold mining, however, are the most well-known. 

Laureano Ortega Murillo and Wang Yi
Laureano Ortega Murillo (left) with Chinese Foreign Minister Wang Yi. Source: Chinese Embassy in Nicaragua

Similar to COMINTSA, Capital Mining became publicly known in 2022 due to its involvement in the Ortega-Murillo regime’s seizure of mining concessions from Randy Martin. In June 2022, MEM issued a resolution canceling a concession held by Martin’s Plantel Los Ángeles, S.A., which first began operating in Nicaragua in 2016, 43 to buy and process minerals. 44 This cancelation was ostensibly  linked to its purchase of minerals extracted by artisanal miners in protected areas. 45 Plantel Los Ángeles, is the largest processor of illegally sourced artisanal gold in the country, extracted from the Indigenous and Afro-descendant Rama-Kriol Territory and the Indio Maíz Biological Reserve, among other protected areas, 46 leading to the displacement of local Indigenous and Afro-descendant communities as well as environmental destruction. 47 

Randy Martin
Former CEO of Plantel Los Ángeles, Randy Martin. Source: Forest Investment Conference Website

After the cancelation of Plantel Los Ángeles’ concession, local mining cooperatives sent a series of concerned letters and communiqués to MEM stressing the harms to artisanal miners’ earnings and to the cooperatives’ ability to organize.

In response to MEM’s decision, Plantel Los Ángeles’ American CEO, Randy Martin sent a letter to the President of the National Assembly, Gustavo Porras, requesting a meeting to discuss MEM’s decision. 48 While it is not clear if the two met, an industry source later said that “the concession was reinstated” and operations continued. 49 

Letter to MEM Minister Mansell
In a letter to MEM Minister Mansell, accompanied by numerous signatories, artisanal miners express anguish with MEM’s decision to prohibit Plantel Los Ángeles from processing their minerals. Source: Santo Domingo Comunica

In September 2022, Mines Director Henríquez ordered the closure of Plantel Los Ángeles’ operations in Río San Juan, again with the justification that Plantel Los Ángeles was purchasing material mined illegally by artisanal miners in protected areas. Henríquez reportedly then offered the concession to Capital Mining. 50 In a Facebook post, cooperatives from La Libertad and Santo Domingo wrote, “we reject the company imposed by the Mines Director [Henríquez], Capital Mining, and we reiterate that we will not allow them to curtail and violate our rights as artisanal miners.” 51 A week later, the cooperatives reaffirmed “the complete rejection of the company Capital Mining, created by the Mines Director,” adding, “We ask that he respect the law [and] free organization, and we will not give up. We will continue fighting.” 52 

On March 23, 2023, MEM submitted a resolution ordering that the plant be placed under its control, with MEM official Anyela Fernández charged with controlling the plant’s assets and directing its operations. 53 Fernández then transferred the plant to Capital Mining. 54 It has been reported that although Plantel Los Ángeles was indeed processing materials illegally mined by artisanal miners in protected areas – the justification provided by the government was not the real reason for the government’s closure and commandeering of the mill. Allegedly, concession transfer from Martin’s company to Capital Mining is part of a broader attempt by the regime to strip operations from companies it does not control and ensure industry dominance for those it does. 55 An anonymous source linked to the mining sector put the regime’s strategy more bluntly in an interview with media outlet Divergentes: “The message is clear: either you do business with me or I cancel and expropriate your concessions, like what happened with Plantel Los Ángeles.” 56 This ongoing reorganization of the gold sector to serve the regime’s interests has continued in 2024, with the cancelation of four mining concessions in June 2024 supposedly due to “inactivity,” building on the 20 concessions canceled by MEM in December 2023. 57 

Logo
Logo of Capital Mining Investment Nicaragua S.A. Source: Capital Mining

After receiving the concession formerly owned by Martin’s company, Capital Mining reportedly began processing material extracted from private lots belonging to other mining companies and selling it to Canadian companies, while also offering to process ore extracted by the new Chinese mining firms as they begin operations, 58 thereby ensuring the regime benefits more from it.

FALSE PRIORITIES AND MISPLACED SANCTIONS

COMINTSA and Capital Mining can be seen as intermediaries in the Ortega-Murillo regime’s larger effort to exert greater control over the gold mining sector to enrich itself and the companies it favors, such as newcomer Chinese mining companies as well as companies directly controlled by the regime. In the US Treasury Department’s announcement of its May 2024 sanctions against the two companies, it argues that the Ortega-Murillo regime uses the revenues it draws from the gold sector to oppress the Nicaraguan people. 59 Purportedly, the sanctions on COMINTSA and Capital Mining seek to cut off the regime from this crucial revenue source. 

However, the Treasury’s decision to sanction these two companies, and not the North American mining giants that currently dominate Nicaragua’s gold sector, demonstrates that the US government is more interested in safeguarding North American financial and economic interests than choking off the Ortega-Murillo regime from gold revenues. Despite the minimal attention they have received from US policymakers, Western gold companies control at least 63 percent of all Nicaraguan metallic mining concession area – over 10 percent of the country’s total land area. 60 

Nicaragua Concession Area Ownership 
by Companies’ Country of Origin

(as of July 1, 2024) 61 

Note: For subsidiaries, ownership was attributed to the parent company and the parent company’s country of origin.
 

Specifically, the US Treasury Department’s sanctions sidestep Canadian Calibre Mining Corp. (Calibre), which controls 57 concessions covering approximately 1.13 million ha, 62 58 percent of all land granted in metallic mining concessions in Nicaragua, 63 and nine percent of the country’s total land area. 64 Calibre has requested additional concessions, which, if  granted, will give it control over 13.5 percent of Nicaragua’s land area. 65 Calibre’s concession requests include three that were made on May 10, 2024, mere days before the US Treasury’s sanctions on COMINTSA and Capital Mining, and another on May 15, 2024. Weeks later, Calibre submitted another concession request for an area twice as large as COMINTSA and Capital Mining’s combined known holdings. 66 In 2023, Calibre mined 242,109 ounces of gold in Nicaragua, 67 worth over US$470.1 million. 68 It was responsible for 35 percent of all gold exports from Nicaragua in 2022 69 and claims to comprise two percent of the country’s GDP. 70 

Not only is Calibre by far the largest mining company in Nicaragua, but it also has significant assets and financial ties to the United States, putting it squarely within the purview of sanctions against the Nicaraguan gold sector authorized by President Biden’s October 2022 Executive Order 14088. Calibre owns four gold mines in the United States: The Pan Mine, Gold Rock Property, and Illipah Property in Nevada and the Golden Eagle Property in Washington. 71 In 2023, Calibre extracted 41,385 ounces of gold, 72 worth more than US$80.3 million, from its Pan Mine. 73 

Calibre also owns two companies in the United States – Calibre Mining (US) Corp. and Marathon Gold USA Corporation 74 – and nine US-based subsidiaries: Calibre Pan LLC (Nevada), Calibre Gold Rock LLC (Nevada), Calibre Golden Eagle LLC (Washington), Calibre Illipah LLC (Nevada), Calibre Services LLC (Colorado), Calibre Real Estate LLC (Nevada), Calibre Eland LLC (Nevada), Calibre Pinyon LLC (Nevada), and Calibre Mining Services Inc. (Colorado). 75 

Calibre Mining Corp.’s subsidiaries, based in Canada, Nicaragua, the United States, and Barbados

Calibre Mining Corp.’s subsidiaries
Source: Calibre Mining Corp.

Along with its US mines and subsidiaries, many of Calibre’s largest investors are US-based. Of the company’s five largest shareholders, three – Van Eck Associates Corp., Invesco Ltd., and Franklin Resources Inc. – with a combined US$134.3 million worth in shares are based in the United States. 76 Calibre’s largest shareholder is the Canadian mining firm B2Gold Corp., whose seven largest institutional shareholders – which together own over 35 percent of the company’s shares – are headquartered in the United States and include US asset management giants such as BlackRock Inc., Fidelity Institutional Asset Management, and Vanguard Group Inc. 77 

Not only does Calibre own considerable US assets and have extensive ties to the US financial sector, but the company has also provided millions of dollars in gold revenue to the Ortega-Murillo regime and has been accused of being one of the regime’s biggest allies. 78 From 2020 to 2023, the company paid US$117.7 million in taxes and royalties to the Nicaraguan government as well as nearly US$8.7 million to municipal governments in Nicaragua, 79 most if not all of which are likely controlled by the central government as all 153 of Nicaragua’s municipal governments have been controlled by the Ortega-Murillo regime since the country’s 2022 municipal elections. 80 Calibre Mining Corp. has provided three times more direct revenue to Nicaraguan authorities as a proportion of total revenue produced than they have to US authorities. From 2020 to 2023, Calibre Mining Corp. produced over US$1.51 billion worth of gold in Nicaragua, paying more than US$126.4 million to Nicaraguan authorities over that period, some 8.37 percent of total revenue generated. 81 In 2022 and 2023, Calibre produced approximately US$163.4 million worth of gold in the United States, paying US$4.22 million, or 2.72 percent, in taxes and fees to US authorities. 82 

Despite Calibre receiving more than US$134 million in financing from US-based investment firms and close to US$120 million in direct revenue the company has provided to the Ortega-Murillo regime since 2020, the US Treasury Department opted to sanction two companies, COMINTSA and Capital Mining, which appear to collectively control three concessions with a total area of 5,513 ha – less than half of one percent of Calibre’s total holdings of 1.13 million ha. 83 Furthermore, while not much is known about the gold production at COMINTSA’s concessions, Plantel Los Ángeles, which is now owned by Capital Mining, produces 14,500 ounces of gold annually, 84 less than six percent of Calibre’s gold production in Nicaragua in 2023 85 – 242,109 ounces. 86 Plantel Los Ángeles claims to have paid US$4.25 million in taxes to the Nicaraguan government in 2020, 87 compared to the over US$21.6 million paid in taxes and royalties by Calibre that same year. 88 In 2023, Calibre paid nearly US$37.4 million in taxes and royalties to Nicaraguan authorities. 89 

Aside from the lack of US sanctions, Calibre may be on the verge of even greater power and protection in Canada. David Splett, Calibre’s Chief Financial Officer, 90 resigned in July 2024 to run for the British Columbia Legislative Assembly as a Conservative Party candidate. 91 The election will be held on October 19, 2024, and the latest polls show an extremely close election between the Conservative Party and the incumbent New Democratic Party. 92 Should Splett win and the Conservative Party form a government, it may be in a position to set provincial legislation and influence federal policymaking to shield Calibre from scrutiny for its business practices abroad.

Former Calibre Executive, with a Record of Devastating Latin American Communities, Seeks Elected Office in Canada

David Splett
David Splett. Source: Conservative Party of British Columbia

David Splett, Calibre Mining’s Senior Vice President and Chief Financial Officer (CFO) from 2021 to 2024, has been nominated by the Conservative Party of British Columbia to run for the North Vancouver-Lonsdale seat in the British Columbia Legislative Assembly in the upcoming October 19, 2024, provincial elections. Splett credits his 25 years of senior level experience in the resource extraction industry working in Canada, Mexico, and Latin America for giving him “extensive experience in policy making, cost controls, infrastructure project management, taxation, and sustainable development.” His campaign page claims, “David’s commitment to community sustainability and operational excellence reflects his belief in the importance of giving back and making a tangible difference in the lives of others.”

However, examining the experiences of communities living near mining operations where Splett previously served in senior management roles reveals a drastically different reality. In addition to Calibre’s conduct in Nicaragua, Splett’s tenure at other major mining operations overlapped with serious abuses against local communities.

Splett served as the CFO of Latin America and the Mexico Country Manager for Vancouver-based Goldcorp 93 between 2016 and 2019. His tenure coincided with extreme hostility between communities and the company’s Peñasquito gold mine in Zacatecas, Mexico. Environmental and labor abuses led communities to hold several prolonged protests and blockades, disrupting operations at Mexico’s largest goldmine. In May 2019, residents from Cedros, Mazapil, marched to protest against the mine’s impact exhausting critical water supplies. As one protestor summarized, “They are going to leave us with a sinkhole with totally contaminated land, water, and soil that are useless, and what is left for Zacatecas?”

In April 2019, during a blockade by the company’s truckers, the company suspended all grants, productive projects, trusts and social investments for communities, which a representative justified by saying, “The blockade leaders are trying to extort us and our company will not give in to this extortion.” In 2021, two years after Splett departed the company, the body of José Ascensión Carrillo Vázquez, a local activist at the forefront of the trucking protests, was found along a highway after he was kidnapped, tortured, and killed. A group of community organizations issued a statement following his murder, demanding that the “mining company stop using armed groups as agents who are regularly trying to intimidate all social activists,” in the area.

From 2008 to 2013, Splett served as the VP of Finance and Administration for Antamina, one of the world’s largest copper and zinc mines located in the Andes Mountains of Peru. During this time, dust emitted from the mine negatively impacted the health of impoverished communities and their crops and livestock. Tests done from 2006-2009 by government health agencies found elevated levels of lead and cadmium in the blood and urine of villagers, a major health risk. The company was fined for a June 2009 leak of copper, zinc, and lead into a river. In 2012, a pipeline rupture exposed hundreds of villagers to toxic materials, resulting in the hospitalization of over 40 people. Despite “strong local opposition,” the mine proceeded with a US$1.29 billion expansion in 2010.

Protest in Zacatecas
Protest in Zacatecas in 2019 against Peñasquito gold mine © Flor Castaneda

Splett’s track record managing mining companies responsible for serious abuses against local communities and environmental devastation in Latin America seriously undermines his stated commitment to ensuring sustainability and community well-being.

Conclusion

In its supposed attempt to cut off gold revenues to the Nicaraguan government, the US Treasury Department sanctioned two companies whose total concessions make up just over 5,500 ha – less than 0.3 percent of the more than 1.96 million ha of land granted as metallic mining concessions in Nicaragua. While COMINTSA and Capital Mining have direct ties to the Ortega-Murillo regime, they appear to be otherwise small actors in the Nicaraguan gold mining industry. Meanwhile, North American firm Calibre Mining Corp. has faced no consequences from the US Treasury Department despite owning 58 percent of all land granted in metallic mining concessions in Nicaragua; having over US$134 million in US-based financial backing; owning fifteen mines, companies, and subsidiaries in the United States; and providing an average of US$31.6 million annually in revenue to Nicaraguan authorities from 2020 to 2023. 94 If Executive Order 14088’s authorized sanctions on the Nicaraguan gold sector are, in fact, targeting the actors doing the most to violate human rights and prop up the Ortega-Murillo regime, Calibre appears to be the model target.

The US Treasury Department’s sanctions on COMINTSA and Capital Mining do not demonstrate a commitment by the US government to defend democracy and human rights – contrary to official statements contending otherwise – but rather further prove Washington’s commitment to pursuing North American profit above all else. It is evident that the US government is more concerned with protecting the profits of Western corporations and US financiers than truly depriving the Ortega-Murillo regime of gold funds that the US Treasury Department claims are being used to stymie Nicaraguan self-determination and freedom. Until the US Treasury Department truly enforces its sanctions on all corporations driving violence against Nicaragua’s Indigenous and Afro-descendant communities and financing the dictatorial Ortega-Murillo regime, Executive Order 14088 will be nothing more than a smokescreen to punish individual competitors of the US mining and financial interests instead of serving as a tool to pursue the democracy and human rights that Washington claims to stand for. Meanwhile, Indigenous and Afro-descendant Peoples continue to suffer horrific violence, arbitrary detention, dispossession, displacement, and forced exile at the hands of gold miners and the Ortega-Murillo regime.

By Anuradha Mittal, Eric Heilmann, Josh Mayer with Andy Currier.

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