Honduras To Remain Problematic For Mining Firms
BMI View: The Honduran Congress' recent lifting of the country's moratorium on new mining concessions, in place since 2006, may open the country to further mining investment in the coming years. However, foreign firms face a litany of operational challenges in the country, including significant environmental and local opposition to mining, poor rule of law, and high levels of violence, which suggests minimal growth for the mining sector.
The passage of Honduras' General Mining Law is meant to jumpstart the country's mining industry by opening up mining opportunities to outside investors. The country currently produces small amounts of gold, silver, lead, and zinc. The new mining law will enable the government to issue new mining permits, though it also mandates that citizen meetings, organized by local town councils, exert final approval on proposed projects. The law also modifies the country's current tax structure, by raising from 1% to 2% the tax on free-on-board exports. Additional taxes of 1% each will be levied on mining firms to pay for the country's mining watchdog and to support Coalianza, an organization that supports public-private partnerships. A couple major miners, including Belgium's Nyrstar and Canada's Aura Minerals have operations in the country. Nyrstar operates the El Mochito lead-zinc-silver mine through its Breakwater Resources subsidiary, while Aura Minerals operates the San Andres gold mine.
Honduras To Lag Others In Region
|Tepid Growth Ahead|
|Honduras - Mining Industry Value & Growth|