HONDURAS – MINING REGULATION
Honduras, officially the Republic of Honduras, is a republic in Central America. The country is bordered to the northwest by Guatemala, to the southwest by El Salvador and to the south by Nicaragua. It also has a small border with the Pacific Ocean and a long border with the Caribbean Sea. Honduras spans an area of about 112,492 km² and has a population exceeding eight million. It is best known for the production of coffee, tropical fruit and sugar cane, as well as for its growing textiles industry, which serves the international market.
In Honduras one can find gold, silver, copper, cadmium, lead, zinc, iron ore, antimony and coal. Silver, gold, lead and zinc, however, are the most important minerals mined in Honduras. Nevertheless, production is small relative to potential and accounts for less than 2% of the economy. The El Mochito Mine, in Santa Bárbara, is a longstanding producer of zinc, once held by Breakwater Resources of Canada and now owned by Belgium’s Nyrstar N.V. Gold production takes place at the San Andres Mine, which is owned by Aura Minerals Inc. of Canada, as well as Goldcorp’s San Martin Mine.
In 2008, the government of President Zelaya placed a moratorium on the granting of new mining licenses, following a 2006 Supreme Court ruling that over a dozen articles of the mining law were unconstitutional. In 2013, a new mining law was passed that aimed to overcome these constitutional problems. According to miningwatch.ca, however, the new law is under fresh constitutional attack by the Honduran Institute for Environmental Law and the Honduran Center for the Promotion of Community Development, which have apparently filed separate actions in 2014 on behalf of two groups of petitioners.
PRINCIPAL LEGISLATION AND REGULATOR
The principal legislation consists of the General Mining Law of 2013 (Decree 238/2012) (GML) and its regulation, the Environmental Law (Decree 104/1993) and its regulation, and the Environmental Impact Assessment Law. Minerals belong to the state and are divided into metallic, non-metallic and gems or precious stones. Mining rights constitute a different right from the land.
The Secretariat for Energy, Natural Resources and the Environment, or Secretaría de Estado en los Despachos de Energía, Recursos Naturales y Ambiente (“SERNA”), is the ministry responsible for Honduras’ energy, environmental and natural resources policies. SERNA has several departments: Dirección General de Control Ambiental (“DECA”), Centro de Estudios y Control de Contaminantes (“CESCCO”), Dirección General de Biodiversidad (“DIBIO”), Dirección General de Recursos Hídricos (“DGRH”), Unidad de Servicios Legales (“USL”) and others. Pursuant to the GML, The Mining and Geology Institute of Honduras, or Instituto Hondureño de Geología y Minas, is responsible for granting, modifying and terminating mining rights and other mining obligations.
GRANTS AND FORMS OF MINERAL TITLE
Pursuant to Article 63 of the GML, the principle of first come / first served applies. All individuals or entities established in the country or authorised to engage in commercial activities in Honduras are entitled to mining rights. The GML distinguishes among the following mining rights:
- Prospecting (or reconnaissance) activities: These activities are not regulated and may be carried out freely within the country (Art. 13, GML).
- Exploration Concessions: These concessions are granted for a period of up to two years in the case of non-metallic minerals and gems or precious stones, and up to five years in the case of metallic minerals. In both cases the concessions may be extended for the same period for which they were granted. The licences are mineral specific though one can apply to include additionally discovered minerals. In order to obtain a licence, competence to undertake the work must be demonstrated.
- Exploitation Concessions: Exploitation concessions have a duration of up to 10 years in the case of non-metallic minerals and gems or precious stones, and 15 years in the case of metallic minerals. This period may be extended based on the rate of mining and remaining reserves. A suspension of mining activities shall not exceed four years, else one must decommission the mine (Art. 28, GML). For metallic minerals, mining concessions may vary from 100 to 1,000 hectares with a maximum of 10 concessions. Non-metallic minerals and gems or precious stone concession areas may vary from 100 to 400 hectares also with a maximum of 10 concessions. Foreigners or nationals may apply for mining rights, but foreigners must have legal representation in the country (Art. 54(g), GML).
The mining operator may treat and sell recovered minerals freely, either in national or international territories. The mining concession may be transferred, but only with the prior agreement of the mining authority (Art. 60, GML).
The application for an exploitation concession must include the results of exploration to date, an investment program, a community program, and a feasibility study; the decision as to whether or not to grant the concession is made within 45 days of submission (Art. 69, GML). The GML requires a public consultation within the affected municipality(ies) in accordance with the Municipalities Act; if the consultation is negative, the mine cannot be permitted and another application cannot be made for three years (Art. 67, GML). Article 51 of the GML states that mining operators may establish easements over state land in order to develop mining activities, but prior agreement with private landowners is required for private land. An environmental licence is required in order to acquire an exploitation concession. As well, municipal operating permits are required for all activities in Honduras (See Municipalities Act, or Ley de Municipalidades (Decree 134‐90, and its regulation (Reglamento General de la Ley de Municipalidades (Executive Agreement 018‐93, Tegucigalpa, February 18, 1993)).
See Honduras – Environmental Regulation.