The regime of Daniel Ortega and Rosario Murillo, in collusion with the Chinese company Zhong Fu Development S.A., forcibly took over the BHMB Mining Palacagüina plant in Madriz, which legally belongs to BHMB Mining Nicaragua, a subsidiary of U.S.-owned BHMB Inc., employees and local residents confirmed to La Prensa.
Since October 2021, BHMB Mining has operated the facility, which processes gold-bearing material from artisanal miners also registered with the Ministry of Energy and Mines (MEM). The company held a 10-year permit issued by the ministry’s General Directorate of Mines.
According to sources who spoke on condition of anonymity, the facilities and equipment are worth more than $4 million, in addition to gold-bearing material in storage and under processing valued at about $1 million at the time of the takeover.
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Witnesses and former employees said that on Tuesday, September 9, a group of Chinese nationals arrived at the plant with five armed Nicaraguans in civilian clothes, accompanied by a woman known locally as an MEM official, though she refused to present identification. “They came in aggressively, broke the gates, told the manager the plant was no longer his responsibility, and seized control of the facilities,” one source said.
La Prensa sought comment from BHMB Mining Nicaragua, but no response had been received by the time of publication.
A Timeline of the Seizure
Former employees said that on August 12, MEM inspectors carried out a routine visit to the Palacagüina plant. During the inspection, the manager was informed that operations had to be suspended immediately.
On August 13, the company filed a request for clarification with MEM, but received no reply.
On Friday, August 22, around 20 Chinese nationals arrived in Hilux trucks, accompanied by several Nicaraguans. While no identification was shown, some Chinese wore shirts with the logos of Zhong Fu and Santa Rita, while the Nicaraguans claimed to “work for engineer Salvador Mansell,” head of MEM. The plant manager allowed them in, and they spent four hours inspecting the premises and requesting equipment lists before leaving.
On Monday, August 25, BHMB officials were summoned to Managua, where they were handed a ministerial agreement dated August 13 and signed by Deputy Minister of Energy and Mines Santiago Bermúdez. The order mandated the “immediate and definitive closure” of the plant, nullified its registration, and authorized the confiscation of “all assets, machinery, and equipment” over alleged unpaid mining taxes since December 2021.
The document also claimed the August 12 inspection found gold processing activity without authorization, since the company lacked a mining concession and had not reported the origin of the material.
A BHMB source stressed that “the first invasion, on Friday the 22nd, happened before the company had received any official documentation from MEM about the confiscation.”
BHMB Left Defenseless
Documents reviewed by La Prensa show that BHMB filed motions for review and appeal, but MEM declared them inadmissible.
In its appeal, BHMB argued it was not obligated to pay “mining taxes” since it did not hold or operate a mining concession. Instead, the company ran a processing facility for artisanal miners’ material, which is legally distinct. The company insisted it had paid all other applicable taxes in compliance with the law.
Workers also refuted MEM’s claim of unauthorized gold processing, noting that “MEM strictly monitors every truckload brought in by artisanal miners. Since operations began, MEM has inspected the plant every three months and had never reported irregularities before.”
After the appeals were rejected, on September 9 the group of Chinese nationals returned, this time with armed men and the same MEM official, who again refused to identify herself. Armed men have remained at the facility ever since.
One Month Later: No Answers for Investors or Workers
More than a month after the shutdown, MEM has provided no explanation regarding the plant’s future or compensation for the more than 120 workers who lost their jobs.
“These people have been out of work for a month without severance pay because MEM shut the plant down arbitrarily and it was taken over by the Chinese. The company cannot pay compensation because the plant was confiscated and is no longer operating,” said a former employee. “That job was the only source of income for 120 families in Palacagüina,” he added.
This is the first case in which the dictatorship has acted jointly with a Chinese company operating in Nicaragua to strip foreign investors of their assets.
What Is Known About Zhong Fu Development S.A. and Santa Rita
Zhong Fu Development S.A., a Chinese-owned company, has become one of the biggest beneficiaries of the Ortega-Murillo regime following the rupture of diplomatic ties with Taiwan and rapprochement with Beijing in December 2021. In just two years, it has amassed concessions covering more than 180,000 hectares across the country, from the North Caribbean to Chinandega.
Environmental groups denounce that the concessions were granted without prior consultation with affected communities, without transparency, and under lax environmental controls, raising alarms over the impact on sensitive territories.
Meanwhile, Santa Rita Mining Company S.A., with historic operations in Rosita, has been accused by local communities of evictions, pressure on farmers, and inadequate compensation.
The aggressive entry of Zhong Fu Development and Santa Rita into Nicaragua’s mining sector illustrates the new map of economic interests under the dictatorship, where Chinese capital gains ground at the expense of Western investors, deepening social and environmental conflicts in affected communities.
