Updated

Honduran authorities announced Wednesday that the National Police have busted a rare, makeshift cocaine laboratory hidden in a remote, mountainous region near the Atlantic coast as part of their U.S.-backed anti-drug efforts in Central America.

Honduran Minister of Public Safety Ivan Mejia said a six-month investigation led agents Tuesday to the lab, where they found 500 kilograms of cocaine and the paste used to make cocaine. Mejia said authorities also seized barrels containing toxic chemicals used to make the drug, including hydrogen peroxide, potassium permanganate and activated carbon.

The lab was set up in an ordinary, two-story home, but the operations were sophisticated. Below ground were tanks used to hide money and drugs. Above ground were dryers, stoves and other laboratory equipment. No one arrested.

In March 2011, Honduran police busted a cocaine lab in what the U.S. State Department described as the "first of its kind" in Central America in recent years. The labs process relatively cheap cocaine paste from South America into higher priced, more pure cocaine destined for the U.S.

While Honduras is a major transit point for drugs heading from South America, Drug Enforcement Administration special agent Jeffrey Todd Scott in Washington said Wednesday that such labs are rare.

"While this is one of the first labs we've identified in Honduras, we're always concerned when we find any operational lab," he said. "We'll continue working with our counterparts to investigate and dismantle such sites as they are discovered."

Political analyst Robert Naiman, who studies drug policy in the region, said Honduras offers an "attractive location" for traffickers because its law enforcement agencies are plagued with corruption.

"Unfortunately, I fear this development will be used to justify further militarization of U.S. drug policy in Honduras," he said.

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Associated Press writer Freddy Cuevas reported this story in Tegucigalpa and Martha Mendoza reported from Santa Cruz, Calif.