This is the Honduras EITI 2016 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
Honduras's extractive sector is small, but there has been interest in expanding mining investments and in developing the hydrocarbon sector. The mining sector contributes 1% to the GDP and makes up 4% of the country’s exports (statistics from Central Bank of Honduras). Informal mining activities are estimated to be three to four times larger than those of the commercial mining sector.
Development prospects in the extractive sector are uncertain. Low commodity prices, increased operation costs and a lack of social license weakens sustainability chances of junior mining companies exploiting gold, iron oxide, lead, silver and zinc. Plans for expanding the informal mining sector are delayed due to the failure to secure an operator for the proposed 200-hectare artisanal mining park.
The Government of Honduras signed, in 2013, a contract with British Gas (BG) now Shell, to explore for oil offshore. The area of approximately 300 million km2 is located in eastern province of Mosquitia near the Caribbean Sea. With current low oil prices, the outlook of this project is uncertain. If exploration goes as planned, the citizens of Honduras will know by August 2017 if their country has commercial quantities of oil.
Honduras sought beneficial ownership information from four mining companies operating in the country. Two of them provided information about their legal owners, noting that information about beneficial owners was not obtainable as the mother companies were registered in foreign jurisdictions. The report on beneficial ownership confirmed that Honduran legal framework does not require the identification of beneficial owners and does not allow mandatory declaration of personal information.
Honduras, through INHGEOMIN, is working to strengthen the monitoring of production data. Mining companies report production amounts in their annual declaration (DAC) to INHGEOMIN. The 2014 EITI Report reveals that Honduras exports 100% of its metallic mining.
|Company||Commodity||Production amount||Production value USD|
|Eurocantera S.A de C.V||Gold||71,94 Kg||2 052 514|
|Iron Oxide||515 800 TM||23 827 992|
|Five Star Mining S.A de C.V||Gold||2 162,27 Kg||2 791 158|
|Silver||3 163,05 Kg|
|Minerales de Occidente S.A de C.V||Gold||2 578,26 Kg||110 077 651|
|American Pacific Honduras S.A de C.V||Silver and lead concentrate||25 253,9 TM||97 602 797|
|Silver and zinc concentrate||51 921,52 TM|
|Other companies||Gold||124,21 Kg||4 496 019|
|Iron oxide||615 709,154 TM||25 988 933|
|Antimonium||12,5 TM||112 500|
|Agregados del Caribe S.A de C.V||Quarries||980 449,885 TM||8 986 146|
|2014 Value of production||27 055 905|
- EITI Report urges better tax collection
The report also identifies a revenue flow, that while mandated in the 2013 Mining law, has not been collected. The Coalianza is a government-led initiative to partner with the private sector in channelling funding to big infrastructure projects. The 2013 Mining Law established a contribution of 1% of the value of sales or exports of metallic mineral companies to Coalianza. However, the 2014 EITI Report finds that the government had yet to collect this revenue. The report urges the government to establish which collecting agency will be responsible for this tax and the collection procedures.
- Improving production monitoring system
The Independent Administrator for Honduras 2014 EITI Report recommends mandating reporting production information for all companies in Honduras.
exporting companies have the obligation to report mineral production. Moreover, production data is based on exporting companies’ self-declarations. The report recommends that Honduras makes mandatory to all producing companies to report their production volumes. In addition, INHGEOMIN could establish a monitoring mechanism to ensure data production is verifiable.
Honduras has now gotten quality licensing data.
Honduras 2014 EITI Report documents how the EITI has contributed to stregthen government systems. The Honduran Institute for Geology and Mines (INHGEOMIN), created on 2013, is legally mandated to manage the mining sector in accordance to EITI transparency principles. EITI reporting deadlines put pressure on INHGEOMIN to clean up the mining license register.The register went from a single database that merged active, expired, awarded and revoked mining rights along with other administrative data, to a system that produced clearer, categorised and complete data.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
Honduras completed a report on beneficial ownership disclosures in October 2015. The report reveals the beneficial owners from companies that voluntarily agreed to have these details published. The report includes disclosure on legal ownership of companies which parent companies are publicly listed. The report included a legal review concluding that Honduran legal framework does not require the identification of beneficial owners and does not allow mandatory declaration of personal information.
Honduras' second EITI Report, covering 2014, was published in September 2016. The Report provides payments data from the seven companies that account for 89% of the mineral exports and from one hydrocarbon company. According to the report, Honduras received USD 14.5 million in revenues from the mining sector. This EITI Report makes available for the first time clear and concise information about mining licenses, which complements data available in the transparency portal of the mining regulator INHGEOMIN.
Honduras produced the country's first EITI Report for fiscal years 2012 and 2013 in May 2015. In accordance with the EITI Standard, Honduras concilates payments done by 6 metallic mining companies with the receipts collected by central government and municipalities. The Report also includes a confirmation of the payment of US$ 300 000 made by BG International Limited, Sucursal Honduras for the concept of canon with the receipts of the Secretary of Natural Resources and Environment (SERNA).
Honduras became candidate on 22 May 2013. See Honduras' candidature application for more details. Following the transitions arrangements approved by the EITI Board on 21 August 2013, Honduras has a validation deadline on 1st Juy 2016.
Timeline of Honduras' implementation (click on image to enlarge):
Dr. Carlos López Contreras is the High Comissioner and Chair of the EITI-Honduras National Council. According to the Decree PCM-044-2012, establishing the EITI-Honduras MSG, the distribution of seats is as follows:
State Secretary of Enery, Natural Resources, Environment and Mining (SERNA)
Honduran Institute of Geology and Mining (INHGEOMIN)
State Secretary of Finances
Institute for Access to Public Information (IAIP)
Asociation of Honduran Municipalities (AMHON)
Honduran National Association of Metallic Mining (ANAMIMH)
National Industrial Association (ANDI)
Nationaol Federation of Trade and Commerce (FEDECAMARA)
Honduran Counsil of Private Companies ( COHEP)
National Anticorruption Counsil (CNA)
Alt. Foro Nacional de Convergencia (FONAC)
Federeation of Non-governmental Organizations for the Development (FOPRIDEH)
Alt. Foundation Democracy without Borders (FDsF)
Universidad Jose Cecilio del Valle (UJCV)
Alt. Universidad Nacional Autonoma de Honduras (UHAN)
This EITI Report covers Honduras' extractive sector in 2014. It was published in September 2016. A complementary note was released on November 2016.
This EITI Report covers Honduras' extractive sector in 2012 and 2013. It was published in May 2015.
This is Honduras 2015 Annual Progress Report in accordance with Requirements 7.4 and 8.4
This report was published in October 2015.
This is the Honduras EITI 2015 work plan (in accordance with Requirement 1.5).
Honduras' Validation commenced on 1 January 2017. On 25 October 2017, the EITI Board found that Honduras has made meaningful progress in implementing the 2016 EITI Standard.
The following documentation laid the basis for the Board's decision, attached below:
Santiago J. Dondo
Santiago J. Dondo is an expert in law and public policy related to the extractive industries. He is the Regional Director for Latin America and the Caribbean at the EITI.