Going for Gold in El Salvador

By Simon West

Breakbulk operators in Central America welcome El Salvador’s decision to lift its 2017 metals mining ban, anticipating a surge in logistics demand as new extraction projects take shape.

From Issue 2, 2025 of Breakbulk Magazine.

Breakbulk movers active in Central America have welcomed El Salvador’s decision to overturn its 2017 metals mining ban, a ruling set to generate fresh demand for logistics as the nation opens its doors to new extraction projects.

In late December, El Salvador’s 60-seat legislature voted overwhelmingly to lift the eight-year moratorium, originally imposed to protect water resources and public health. Speaking to Breakbulk, Eduardo Garcia, CEO, Latin America at WR Logistics, said it was a “great move” by the government that would stimulate economic growth.

“For our company it represents an excellent opportunity,” he said. “We have extensive experience in the mining industry in other regions, which will allow us to provide cutting-edge logistical solutions and comprehensive know-how to support sector growth. We aim to participate of course in this development in the near future.”

Claudia Kattan, vice president of Central America at Crowley Logistics, said more mining projects in the country would offer “significant opportunities” for logistics and shipping. “Increased demand for transporting raw materials, machinery and supplies will create new business for logistics providers,” Kattan said.

“This growth can also drive investment in infrastructure, such as ports, roads and storage facilities, to support mining operations. The government’s involvement in overseeing mining projects could lead to improved infrastructure to support these activities.”

Gold Rush

The reintroduction of metals mining had been driven by El Salvador’s president, Nayib Bukele, who had labelled the prior ban “absurd”. The new legislation gives the state exclusive authority to explore, exploit, extract and process metallic resources with the option of working with foreign companies to develop projects.

The government highlights El Salvador’s prime spot on the eastern edge of the Pacific Ring of Fire, an expansive tectonic belt of volcanoes and earthquakes rich in lithium, cobalt, nickel and other minerals. But gold is the real prize here, with lawmakers quoting studies estimating 50 million ounces in just 4% of land with mining potential.

“Gold could transform El Salvador,” Bukele said on X.

Charles Cooper, principal of UK-headquartered mining consultancy Jord Metals, said gold deposits in El Salvador tend to be small but high-grade. Such assets, typically found in northern provinces around the Lempa River, the country’s main watershed, would suit junior to mid-tier mining firms looking for smaller projects with a 15- to 20-year lifespan.

These projects would still need substantial logistics support, though on a more modest scale than developments such as Chile’s sprawling copper mines.

“Most mining equipment for restarting existing mines would be relatively small-scale given the predicted size of the operations,” Cooper said. “Mining is likely to be underground, which would require load, haul and dump machines (LHDs), drill rigs, supplies of concrete and shotcrete and roof bolts.

“The main large-scale equipment would be used in the process plant during construction, such as Ball and SAG mills (types of grinding machines used to crush and reduce the size of ore and rock), thickener tanks, diesel and gas storage tanks, pumping equipment and earth moving equipment. Most of this is likely to be imported. Roads and transmission power lines would need upgrading. Housing for locals, accommodation and office buildings would also be needed, but probably sourced domestically.”

The consultant warned though that it could be several years before mining operations begin. Any operator eyeing El Salvador will likely wait for clarity on a new mineral code outlining key details such as ownership rights, tax obligations, community relations and local content requirements – all of which will take time to finalize.

“We’re looking at probably three to five years at least,” Cooper said.

Challenges to development persist, including environmental opposition and a legacy of corruption and red tape that could spook investors. In a bid to ease widespread domestic hostility toward mining – one survey indicated about 80% of the population opposed its reintroduction – the use of mercury in mining operations has been prohibited.

“Mining companies are going to have to do a lot of handholding and get really involved in local level discussions to try to reassure the local population,” Cooper said.

A Logistics Hub in the Making

The new mining rules come as the populist Bukele – who once described himself as the “world’s coolest dictator” – makes it his mission to lure more overseas investment in a bid to revitalize one of the region’s poorest and most troubled nations. To support regeneration, millions of dollars are being allocated for roads, bridges and airport facilities, with a focus on boosting infrastructure in the country’s underdeveloped eastern region.

A major coup was struck last year after it was revealed that Türkiye’s Yilport Holding planned to spend US$1.62 billion to overhaul the strategic ports of Acajutla and La Unión, a move that could help create a new regional logistics hub.

Bukele posted a video on his X account describing how Yilport would form a “mixed economy venture” with El Salvador’s autonomous executive port commission, or CEPA, to jointly operate the facilities under a 50-year concession. The deal represented the “largest private investment in the country’s history,” the video said.

Expanding on the plans, Luis Canto, general manager of the Unión Portuaria del Pacífico venture and Yilport’s former chief technical officer, told Breakbulk the investment had begun late last year and would be staggered in three phases.

In a first phase, US$50 million would be spent on new specialized equipment for handling general cargo as well as upgrades to roads and improvements to power and water supply systems. A second phase, slated for completion by 2028-2029, calls for a new 550-meter dock at Acajutla with a 15-meter draft that will house four to five ship-to-shore (STS) cranes, and a backup yard equipped with automatic rubber-tired gantry (RTG) cranes.

An expanded Dock A will have the capacity for three or four multipurpose mobile cranes and additional general cargo warehousing.

The plan for La Unión, inactive since its completion in 2008, is to prioritize general cargo and roll-on, roll-off (RoRo) operations, with upgrades including new specialized equipment and possible dredging of the access channel. According to Canto, the investment will redirect cargo from neighboring countries and position El Salvador as a logistics hub.

“The construction boom will be more easily supported by an efficient port. The mining industry, which is on the verge of taking off in El Salvador, will find the ports as its natural allies for the import of necessary supplies and the export of raw or processed products to the markets that require them,” Canto said.

“Direct connections with China and the Asian continent will be quickly established, as well as an increase in trade with the U.S. West Coast.”

Christopher Knuth, CEO of KTC Heavy Lift in Honduras, welcomed investment in El Salvador’s ports, noting the poor state of ports in neighboring countries Honduras, Nicaragua and Guatemala.

According to the executive, well-equipped terminals along Central America’s Pacific coastline were sorely needed to handle cargo deliveries from Asia without diverting through the Panama Canal. “Strengthening the port of Acajutla reinforces that whole part of the Pacific,” he said.

Energy Diversification

Boasting solid infrastructure including ports and terminals will be crucial for El Salvador’s ongoing plans to diversify its energy use and economy. Beyond gold, the country has embarked on a program to build new geothermal power plants to help fuel its Bitcoin mining operations. Geothermal power contributes about 25% of El Salvador’s electricity generation, a share expected to rise with the start-up later this year of a new 7-megawatt (MW) binary cycle facility at Berlín, Usulután.

El Salvador is also expanding solar photovoltaic (PV) capacity through new large-scale projects, while last year lawmakers approved a nuclear energy law establishing a regulatory framework for building and operating nuclear power plants.

In one of his first actions in office, U.S. Secretary of State Marco Rubio signed a memorandum of understanding (MoU) with Salvadoran Foreign Minister Alexandra Hill Tinoco to cooperate on strategic civil nuclear development – the first nuclear energy deal between the U.S. and a Central American country.

“Nuclear energy is a strategic option which will not just help reduce our carbon footprint, it will also ensure reliable and efficient electric energy for our country’s development and for the well-being of our people,” Hill Tinoco said during February’s signing ceremony.

While not everything that glitters is gold, El Salvador’s ambitious drive to develop its resources and infrastructure signal a new era – one where breakbulk and project cargo stand ready to seize new opportunities.

Breakbulk Americas is happening this year on Sep 30-Oct 02 in Houston.