Mining Concessions in Nicaragua: A Guide for Foreign Investors

By: Luis M. Canales, Director of CALA LAWYERS

Nicaragua continues to be one of the countries with the greatest mining potential in Central America, particularly in gold and silver. However, the legal and environmental framework is becoming increasingly demanding, making it essential to conduct a legal and technical Due Diligence before applying for a mining concession.

At CALA LAWYERS, we have extensive experience in Mining and Energy Law and have seen how the lack of prior analysis can jeopardize multimillion-dollar projects. In this article, we summarize everything a foreign investor needs to know to safely invest in Nicaragua's mining sector.

Current Legal and Regulatory Framework

Given that the mining sector is one of the most sought-after economic activities by foreign investors, Nicaragua has a set of laws that regulate and incentivize the sector, making it very attractive for foreign investors operating in this industry.

Below are some of the main laws that every investor should know before investing in Nicaragua:

1. Special Law on Exploration and Exploitation of Mines (Law No. 387)

This is the primary law governing mining concessions in Nicaragua. It grants exclusive exploration and exploitation rights for renewable periods and establishes the procedures that investors must follow before the Ministry of Energy and Mines (MEM).

It is worth mentioning that this legislation was amended by Law 1128 of 2022.

2. Foreign Investment Law No. 1240

This law provides guarantees for stability, capital repatriation, non-discriminatory treatment, and protection against expropriation. In general, it establishes that any investor must register with the Ministry of Development, Industry, and Commerce (MIFIC) to obtain their Unique Foreign Investment Registration Certificate (RUIE), which facilitates the development of operations in Nicaragua.

3. Environment and Natural Resources Law No. 217

The Environmental Impact Assessment (EIA) system and consultations with local and indigenous communities are also part of the legal framework that investors must consider. Environmental compliance is essential for the approval of any mining concession.

Competent Institutions in the Mining Process

Pre-Application Due Diligence: Key to Success

Conducting Due Diligence beforehand is not just a legal recommendation but a strategic requirement. Foreign investors, banks, and other involved entities demand a comprehensive Due Diligence report before financing or acquiring mining rights in Nicaragua.

This is why having qualified legal and accounting advice with experience is crucial, as even minor errors can jeopardize projects.

Objectives of Mining Due Diligence:

- Confirm legal availability of the area (Cadastre / MEM).

- Validate the legal status of the applicant (Public Registry, DGI, Municipality).

- Analyze environmental and social risks (protected areas, MARENA).

- Fiscal and contractual evaluation (royalties, contracts, tax incentives).

A well-executed mining Due Diligence can reduce up to 70% of legal and financial risks of the project.

Requirements to Obtain a Mining Concession in Nicaragua

1. Submission of the application to MEM: Must include the articles of incorporation, power of attorney of the legal representative, georeferenced map, technical program, payment of fees, and cadastral certificate.
2. Technical review and official publication: Once received, MEM publishes the notice in La Gaceta for third-party opposition.

3. Environmental evaluation: Requires submission and approval by MARENA.

4. Granting of the concession: If all is in order, MEM issues the Mining Concession Title.

5. Foreign Investment Registration: Recently, it has been required to obtain the Unique Foreign Investment Registration Certificate (RUIE) from MIFIC in addition to the above requirements.

6. Operational obligations: Include annual reporting and compliance with fiscal, labor, and environmental requirements.

Common Risks and Mitigation Strategies

Due Diligence as a Financing Tool

In the current environment, international funds and banks require proof of ownership and legal compliance. A Due Diligence should include at least:

- Certified copy of the mining title or application in process.

- Legal opinion by CALA LAWYERS on the validity of rights.

- Approved or pending EIA.

- Foreign Investment Registration Certificate (RUIE).

- Environmental and social management plan (ESG).

The attractiveness of Nicaragua's mining sector today depends on the legal and technical rigor applied at every stage. Pre-application Due Diligence is not optional: it is the foundation for obtaining financing, trust, and long-term legal stability.

At CALA LAWYERS, we assist investors from the initial area study to the granting of the concession, ensuring compliance with all laws, environmental regulations, and foreign investment requirements.