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The politics of gold

Tuesday, September 20, 2011

Central America has plenty of gold, the price of which has more than tripled in the past five years.

The region also has major deposits of other metals, including silver, nickel and copper, whose prices have likewise surged.

The result has been that mining companies are interested in Central America, where six mines currently operate, and another 20 are in the process of exploration. Nine other projects have been suspended, mainly in El Salvador and Costa Rica, as a result of pressure from environmental groups.

The conflict between miners and environmentalists respects neither national nor political frontiers. The government of Nicaragua, usually regarded as leftist, welcomes miners, as do those of Panama and Honduras, generally seen as pro-business. These countries must take into account the potential environmental impact of mining operations.

On the other hand, mining projects should produce enough revenue, to let governments pay for first-quality environmental supervision. In addition, Guatemala has insisted that miners pay higher royalties for the ore they produce, given high international prices. For their part, El Salvador and Costa Rica ,which have the right to reject extraction industries, must accept the financial consequences of their decision.