The following is excerpted from IKN75. We tend to excerpt from the 'Regional Politics' section of The IKN Weekly more than the other parts (Fundamental Analysis of Mining Stocks, Stocks to Follow, Copper Basket, Market Watching) because info contained in the other bits usually pertains to companies we cover or recommend, so it's only fair paying subbers to keep that from the blog. But 'Regional Politics' serves its purpose in the Weekly as well, trying to spot trends and anticipate actions taken by governments that affect the playing fields further down the line. So here are your author's thoughts about mining and Guatemala from last weekend's edition, starting with the current issues faced by Goldcorp and then expanding. DYODD.
Guatemala: Environment Ministry Files Criminal Charges Against GoldcorpStrangely enough (!) it’s been hard to find a decent English language news report about the action taken against Goldcorp (GG) by Guatemala’s MARN Environmental Ministry last week, but here’s a link to a translation done of one of many Spanish language reports (6) and here’s an excerpt:
Luis Ferraté, Minister of the Environment, has presented a criminal accusation to the Public Ministry against Montana Exploradora [Goldcorp Inc], insisting on an investigation into the discharge of residual waters from the tailings pond at the Marlin mine in San Marcos, because it may contaminate the Quivichil river.The accusation, received by the Ministry on September 28, states that on September 23, the Marlin mine, owned by Montana, a subsidiary of the Canadian company Goldcorp, discharged water from its tailings pond and that this water may cause heavy metal pollution.
The commentary after the report above then descends into “You Lie!” “No, You Lie!” etc, with GG denying and MARN assuring that GG had no right to discharge waters from its near overflowing tailings pond (due to recent rains) in the dead of night. There are better reports available in Spanish language (7).
However, be clear that this is a significant move on the part of Guatemala. The Marlin mine has long made the more polemic headlines of course, but this bringing of formal charges against the company by a government ministry is a different level from NGO accusations and GG platitudes. Frankly, our concern is less with Goldcorp at Marlin and more the general political risk atmosphere in Guatemala. The country is attracting attention from both sides of the mining sector, with the companies now looking at the country and its prospective regions with fresh eyes (note Tahoe THO.to, note Radius (RDU.v) and also the anti-mining activists looking upon it as a battleground laid out. With the government suspension of all new concessions and permits still in place (it’s been there a long time and the debate is now on to allow mining or not), the move made by MARN last week will strengthen the hand of those who would make the permitting ban more permanent. Personally speaking, I wouldn’t touch a Guatemala exposed project with a barge pole, no matter how good the rocks might be.