El Salvador’s Congress Approves Law Allowing Metal Mining

El Salvador’s Congress has passed a law allowing metal mining in the Central American nation, ending a seven-year prohibition.

The decision, backed by 57 out of 60 legislators from the ruling majority and allies, has sparked widespread criticism from environmental groups over potential ecological risks.

The Mining Law

The legislation, promoted by President Nayib Bukele, permits the exploration, extraction, and processing of metal resources from both terrestrial and maritime territories.

However, it designates the state as the sole entity authorized to conduct mining activities, eliminating the granting of concessions, licenses, or permits to private entities. The law also bans the use of mercury in mining operations.

Ecological Questions

The government has committed to declaring certain areas incompatible with metal mining, including forests, protected natural areas, water recharge zones, and urban regions, to mitigate environmental impacts.

On November 27, President Bukele stated on X that studies have identified 50 million ounces of gold in just 4% of the potential mining area, valued at over $131 billion—equivalent to 380% of El Salvador’s GDP.

Despite assurances, protests erupted outside Congress, with demonstrators expressing fears that future projects could harm communities and ecosystems. Environmentalists and activists continue to oppose the law, highlighting concerns over the long-term sustainability of such ventures.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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