VANCOUVER (miningweekly.com) – TSX- and NYSE-listed Tahoe Resources reported Wednesday that a Guatemala-based nongovernmental organisation (NGO) had filed a claim against the Guatemalan Ministry of Energy and Mines (MEM), alleging that the Ministry failed to consult with a local indigenous group before granting the mining licence for the Escobal mine, the third-largest silver mine in the world.
Company management stated their belief that the claims were without merit and pointed to hundreds of documented public and private meetings and open consultations in, and around, the mine area dating back to 2010.
Tahoe pointed out that despite a local census having shown that no indigenous communities were located around the mine area, it had engaged with several indigenous people during its meetings.
The NGO, called CALAS, has led several challenges against the mining licence process over the years.
"This is an attempt by an anti-mining NGO to oppose mining and other development in Guatemala despite the many benefits that these projects bring to local communities. Given the extensive consultation and socialisation process followed by both MEM and [subsidiary] Minera San Rafael leading to issuance of the Escobal licence, we are confident that the current claim is without merit," Tahoe president and CEO Ron Clayton stated.
Desjardins Capital Markets analyst Michael Parkin noted in a memo to clients that the court decisions over the years had been mixed. For example in 2013, a court of appeal in Guatemala stated that MEM should have conducted a hearing about a written opposition to the Escobal mining licence, but did not go so far as to invalidate the mining licence.
Under Guatemalan law, the MEM has 48 hours to respond to the Supreme Court from the date of notice of May 23. The Supreme Court is expected to issue an initial ruling within the next four weeks. With few other miners in the country, it is difficult to assess the likelihood of the various outcomes.
Escobal remains Tahoe’s most valuable asset despite the recent merger and acquisitions activities, which have helped lower its exposure to Guatemala.
Tahoe reported that the claim has had no impact on existing operations at the mine, which continues to meet or exceed the company’s 2017 guidance.
Edited by: Creamer Media Reporter
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