Honduras’ newly elected government has said that the nation will be prohibit open pit mining, according to a statement released by the country’s environment ministry.
The ministry stated that the approval of “extractive permits” which threaten natural resources, public health and limit access to water will be cancelled.
“The natural areas of high ecological value will be intervened immediately, ensuring their conservation and common benefits for the people,” said the ministry.
The statement, however, doesn’t mention when the process would begin.
The country’s new government was elected in November 2021 and is led by president Xiomara Castro, who had pledged to limit mining prior to her victory.
Aura Minerals (TSX: ORA) owns the San Andreas open pit mine, located about 360 km away from Honduras’ capital of Tegucigalpa. The mine produced 88,410 oz. gold in 2021, up from 60,769 oz. in 2020.
The company wasn’t immediately available to comment on the issue.
Last year, Aura had to suspend its operations at the mine for nearly three weeks in July due to a blockade by a group of people from the local community, which the company had described as “illegal.”
Jean Labrecque, the CEO of Glen Eagle (TSXV: GER) which runs a gold processing plant and owns mining concessions in Honduras, told The Northern Miner that he wasn’t concerned about the latest announcement.
“This is a press release and it obviously needs to be accepted by members of the congress,” he said. “I have seen mining laws …and (laws) important to mining take two years before being passed.”
He added that Honduras would have to adhere to its treaty with Canada, which required the nation to respect the laws by which Canadian companies invested in Honduras.
As far as Glen Eagle is concerned, Labrecque doesn’t believe the law would impact the company since it doesn’t run an open pit mine.
Maverix Metals (TSX: MMX), another Canadian-listed company, holds a 25% silver stream on the El Mochito mine in Las Vegas, Honduras. The underground mine has produced over three million oz. of payable silver between 2019 and 2022.
The company wasn’t immediately available for comment.
Honduran mining export revenue from silver, zinc and lead projects totalled nearly $130 million last year according to central bank data, reports Reuters.
Taylor Combaluzier, a mining analyst from Red Cloud Securities describes the latest announcement as “slightly negative” for the company, but doesn’t expect any immediate impact on the San Andreas mine.
“The Ministry did not clarify whether the permit cancellations would only effect new projects or if they would apply to existing ones,” Combaluzier wrote in a research note to clients. “Overall, we believe this press release requires additional clarification by the Ministry and would likely be challenged by the impacted sectors and companies.”
At presstime in Toronto, Aura Minerals’ shares were trading at $12.00, down 37¢ or 2.99%. within a 52-week trading range of $9.01 and $17.50. The company’s shares recovered from a day low of $11.87. The company has 72.6 million common shares outstanding for a market cap of $886.1 million.
Be the first to comment on "Honduras to ban open pit mining"