This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000774 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR OES/ETC and WHA/CEN 
STATE PASS AID FOR LAC/CAM 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: EMIN SENV EINV ECON PGOV HO
SUBJECT: HONDURAN ENVIRONMENT MINISTER ON MINING: SLOW 
PROGRESS UNDER HEAVY PRESSURE 
 
REF A: 05 Tegucigalpa 765 
 
    B: 04 Tegucigalpa 1466 
    C: 05 Tegucigalpa 727 
 
¶1. (SBU) Summary: EmbOffs and USAIDOffs met with the 
Minister of Natural Resources and Environment, Patricia 
Panting, on April 6 to discuss mining issues, specifically a 
ban that has been in place since June 2004 on the granting 
of any new mining concessions in Honduras.  Minister Panting 
defended the ban by saying it was a necessary response to 
the strong anti-mining pressures present in the country and 
presented herself as doing the best she can to support 
sustainable mining operations in the face of opposition from 
these "radical" pressure groups.  She also reported that a 
new national policy on sustainable mining is "75 percent 
complete" and suggested that the ban on new concessions will 
remain in place only for another month or two.  End summary. 
 
¶2. (SBU) EmbOffs met on April 6 with top GOH environmental 
and mining officials to discuss the current ban on new 
mining concessions in Honduras.  The Embassy was represented 
by EconChief, EconOff, and two USAID officers from the 
Office of Trade, Environment and Agriculture.  The GOH was 
represented by Minister Panting, two other officials of the 
Ministry of Natural Resources and the Environment (known as 
SERNA for its initials in Spanish), and Jesse Maria Andraje, 
the head of DEFOMIN, the GOH agency responsible for mining. 
(Comment: Andraje has been manager of DEFOMIN for only a few 
months, after the previous manager, Sandra Pinto, departed 
under a cloud of allegations of corruption.  Andraje seemed 
to be still getting comfortable in her new position, as she 
said nothing during the entire meeting, despite several 
occasions when Minister Panting tried to bring her into the 
conversation.  End comment.) 
 
--------------------------------------------- ----------- 
Background: June 2004 Decree Bans New Mining Concessions 
--------------------------------------------- ----------- 
 
¶3. (SBU) In June 2004, a decree issued by SERNA and signed 
by Minister Panting declared that no new mining concessions 
could be granted in Honduras until such time as a new 
"National Policy for Sustainable Mining" had been designed 
and implemented.  In the ten months since, there has been no 
public announcement of when this policy would be released or 
of when the ban on new concessions would be lifted. 
 
¶4. (SBU) The ban has had a particular impact on the gold 
mining company Tajo Minerales, a Honduran subsidiary of the 
Nevada-based Mayan Gold, Inc.  Tajo Minerales currently 
operates three concessions in the Choluteca Department in 
southern Honduras.  In late 2003, Tajo began the process of 
requesting permission to operate a fourth concession, and 
they believe their application was close to being accepted 
when the June decree forbidding any new concessions came 
into effect.  EmbOffs have accompanied representatives of 
Tajo Minerales and Mayan Gold to previous meetings at SERNA, 
but with no resolution in sight, EmbOffs took this 
opportunity to raise the issue with the Minister herself. 
 
---------------------------------- 
Implications for CAFTA-DR Approval 
---------------------------------- 
 
¶5. (SBU) EconChief began by thanking Minister Panting for 
her dinner meeting the previous week with visiting staffers 
from U.S. Congressmen who are undecided about CAFTA-DR (ref 
A) and for the other work that Minister Panting has done to 
support the agreement and encourage its approval.  He then 
led into the mining issue by noting that, since CAFTA-DR 
approval by the U.S. Congress is still far from assured, 
every vote counts, and any incident that leads to U.S. 
Congressmen hearing complaints about the investment climate 
in CAFTA-DR countries needs to be taken very seriously. 
(The Office of Senate Minority Leader Harry Reid (D-NV) has 
expressed interest in the Tajo Minerales case.) 
 
¶6. (SBU) EconChief stressed that while, of course, Honduras 
has not only the right but the obligation to ensure that 
mining activities are conducted in a sustainable way and 
with minimal environmental impact, a balance should be 
struck that allows some extraction of the country's mineral 
resources to be carried out.  The June decree, which imposes 
a complete and, it has appeared, indefinite ban on all new 
mining activity, does not seem to strike this balance, as it 
sends a message that Honduras is closed to all new foreign 
(or, for that matter, domestic) investment in the sector. 
 
--------------------------------------------- --------- 
Panting: Doing the Best I Can Under Political Pressure 
--------------------------------------------- --------- 
 
¶7. (SBU) Minister Panting responded with an extensive 
account of the strong anti-mining pressures that, in her 
view, have been building in Honduras over the last few 
years.  She began by recounting the "March for Life" that 
took place in 2004, led by the Salvadoran Catholic priest 
Father Andres Tamayo, who is based in the eastern Honduran 
Department of Olancho (ref B).  While the main focus of the 
March for Life was illegal logging, Panting cited it as an 
example of large-scale popular pressure being brought to 
bear on the GOH regarding environmental issues.  She also 
mentioned the tremendous influence of Honduran Cardinal 
Oscar Andres Rodriguez, who has opposed mining in Honduras 
for environmental and social reasons and has led marches 
against mining operations, including those by U.S. companies 
(ref C).  "This is a very Catholic country," said Panting, 
"and when the Cardinal speaks, people listen."  The Minister 
further cited the formation of local anti-mining committees, 
including one in the Choluteca Department (where Tajo 
Minerales currently operates), as evidence of a growing 
opposition to mining activities in Honduras.  She even 
expressed frustration with the tactics used by some of these 
groups, acknowledging that, in an open society, everyone has 
the right to voice their opinions but arguing that blocking 
off public highways, as many Honduran protests do, is a step 
too far. 
 
¶8. (SBU) Those pressures, Panting implied, are what made the 
June decree and the ban on all new mining concessions 
necessary.  Fortunately, she went on, progress has been made 
in formulating the new "National Policy on Sustainable 
Mining" which the decree calls for.  She said this policy is 
about 75 percent complete and should be ready for release 
within a month or two.  A draft is currently being shared 
with various interest groups for their input. 
 
¶9. (SBU) Minister Panting also mentioned a proposed new 
mining law, which was drafted by anti-mining groups last 
year, but was quite frank in her opinion that this new law 
would not do anything to calm the controversy around mining 
in Honduras, as it was drafted by "radicals".  (Comment: In 
this, Minister Panting was echoing statements previously 
made to EconOffs by the former head of DEFOMIN and by the 
Minister of Trade and Industry, Norman Garcia.  Mining 
sector contacts who have reviewed the law find it so extreme 
that, were it enacted, a near total, instantaneous shutdown 
of existing and proposed mining projects would result. 
Fortunately, there seems to be little chance that the law as 
currently drafted will ever reach a Congressional vote.  End 
comment.) 
 
¶10. (SBU) In addition, Panting spoke favorably of the 
current operations of Tajo Minerales, and she was aware that 
the June decree has delayed the processing of their 
application for a fourth concession.  She specifically 
stated that, in her opinion, the proposed new concession "is 
viable", giving EmbOffs reason to hope that, once the new 
mining policy is released and the ban on new concessions is 
lifted, approval of the Tajo concession could follow without 
undue further delays. 
 
¶11. (SBU) Comment: "One or two months" in Honduras often 
means six, and with November's presidential elections 
approaching, Post is far from confident that a new national 
policy on what is, as Minister Panting correctly pointed 
out, a very hot issue politically, will in fact be released 
any time soon.  We will continue to convey the message that 
an all-out ban on new mining activity does not seem to be 
the best solution for Honduras, a poor country with still 
untapped mineral resources lying beneath the surface. 
Rather, as with other controversial environmental issues 
including the misuse of forestry resources, the solution 
should be for the GOH to put into place appropriate 
regulations and environmental protections and then ensure 
adequate resources for the effective enforcement of those 
regulations.  End comment. 
 
Palmer