Otto Perez Molina will be the next President of Guatemala

The big news out of LatAm politics today is that Sandra Torres, the conveniently ex-wife of outgoing President Colom, has just been barred from running in this year's Presidential election by the country's supreme court. Check out Mike over at Central American Politics for more. The whole charade from start to finish has been an archetype TPLAC* episode in politics but I have to say that in the end, it's good to see the courtrooms stand up and be counted on rule of law. In the long run that alone will do Guatemala more good than harm.

So now barring a political upheaval of unheard of proportions, the way is clear for Otto Perez Molina (no relation of course) to be the next President. Make of that what you will.



*tin pot lil american country

Guatemala's Elections: Clean Polls, Dirty Politics

Thanks to a kind reader who remains nameless, IKN passes on this link to the International Crisis Group's June 16th report on the upcoming Guatemalan Presidential elections. Entitled "Guatemala's Elections: Clean Polls, Dirty Politics" it's an excellent job of work by the ICG and great background reading  material for anyone interested in how the vote is shaping up and what we can expect by way of results.

Meanwhile, since that report was released it's become uncertain whether second-in-running Sandra Torres will even make it to the ballot paper, as there's currently a court case, now at the country's highest court of law, that may stop her from running because of her deliberate divorce from her husband, Alvaro Colom, the country's current President, whilst opposition leader and ex-general Otto Pérez Molina has stretched his lead in the polls to 42.5%. Confused? You won't be... after this week's episode of... BananaSoap.

News roundup (no silly parentheses today as every time the word Japan floats back into my brain all the jokes disappear)

We're keeping it LatAm-focussed, but remember what's important in life and what's not. I really think you'd be much better off reading other websites today and not this one, as all LatAm has to offer is minutae.

Best political quote of the day is Alejandro Toledo's "Not all Apristas are corrupt." His new tactic is clearly "Remember folks, I'm the one you vote for if you don't like Alan" which is a smart strategic move.

Guatemala's youth killings. Central American Politics has the latest figures and they're not nice at all.

Today's good market link is Cam Hui over at Humble Student of the Markets and his "A test of the Bernanke put" because Cam is being as insightful as always. This is good.

For Spanish speakers looking for more insight on the Argentina political events and guidance to the 2011 Presidentials later this year, today's post by Abel is unmissable.

HudBay Minerals' (HBM.to) special brand of community relations coming to Peru

The thing about this Constancia place in the southern region of Peru is that the community relations between it and the exploration mining companies there hasn't always been the best. Things got a bit better last year when explorer Norsemont (NOM.to) finally got permission to access land that is part of its concession but still dosn't own and the local villagers around there have been given workshops and committee time to understand what the arrival of a big mining operation would mean, but it's still not the most welcoming place in all the highlands, gotta be said (ie the welcoming ones sell surface rights, they don't just say "yeah you can walk on my land"). Which brings us to the likely new owner of the project and their idea of community relationships with indigenous peoples. The (proposed) new owner of Constancia is HudBay Minerals (HBM.to), that made its offer for Norsemont (NOM.to) yesterday. So  let's recall its caring and loving way of community relations used recently in Guatemala via the words of a woman local to its Fenix project there:

"Just over a year ago, my husband, Adolfo Ich Chamán, was killed by security forces employed at the Fenix mining project in Guatemala – a mining project owned by Canadian company HudBay Minerals. In the afternoon of September 27, 2009, I watched my husband leave our house for the last time. I later learned that mine security forces had surrounded my husband, dragged him through a gap in a fence and hacked at him with machetes. Then the mine’s chief of security shot him in the neck at close range. This attack was unprovoked." CONTINUES

Adolfo Ich Chamán died because he had led a protest group against the Fenix mine. Now for sure Peru isn't Guatemala and there's always going to be apples-to-oranges comparatives between the community relations a mining company has with its locals, but in light of the pisspoor human rights record that the murderers at HBM.to have, it might be nice to get a quote or two from them about how they plan to treat the Peruvian local communities...before they start hacking them to death or shooting them, that is. It might save a lot of bother in the long run.

Tahoe Resources (THO.to) Bought Deal: That's 1% of its host country's GDP!

 True dat! Take Guatemala's 2009 official exchange rate GDP of $37.66Bn, take the deal and assume the overallotment happens, do the math and it's 0.93%..... close enough.

It's not something we normally comment upon on these pages, but the bought deal financing just announced by Tahoe Resources (THO.to) is a big chunk of change, coming in at $306m (and Goldcorp committed to buying in and keeping their current 42% of the company intact). Here's the cover of the termsheet.

Issue Price:         C$14.10 per common share, 3.8% to market closed 
Jurisdictions:     All Provinces of Canada (excluding Quebec) and to the U.S. via Rule 144A/Reg D 
Settlement:       December 24, 2010

Gross Proceeds:	C$306,027,528
Underwriters’ Option:	The Company will grant the Underwriters an option (the “Over-Allotment Option”) to purchase up to such number of additional Shares as is equal to 15% of the number of Shares sold under the Offering to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option shall be exercisable for a period of 30 days following the Closing Date at an exercise price per Share equal to the Issue Price. The Underwriters shall be entitled to the same Commission (as hereinafter defined) provided for below in respect of any Shares issued and sold upon exercise of the Over-Allotment Option.
Use of Proceeds:	The net proceeds of the Offering will be used to fund the advancement and development of the Escobal Project, for acquisitions and for general corporate purposes.
Type of Transaction:	Bought deal, short form prospectus offering, subject to a formal underwriting agreement, including a standard industry “disaster out" and “material adverse change out” clauses running up to the Closing Date.
Jurisdictions:	The qualifying jurisdictions for this offering will be all provinces of Canada except Québec. The Shares will also be sold to U.S. buyers on a private placement basis pursuant to an exemption from the registration requirements in Rule 144A and/or Regulation D of the United States Securities Act of 1933, as amended. The Shares will also be sold to buyers in the United Kingdom on a private placement basis.
Listing:	The Company shall use best efforts to obtain the necessary approvals to list the Shares on the Toronto Stock Exchange, which listing shall be conditionally approved prior to the Closing Date.
Underwriters:	GMP Securities L.P. 1,2                                                                            50.0% BMO Capital Markets                                                                             15.0% Canaccord Genuity Inc.                                                                          15.0% CIBC World Markets Inc.                                                                       5.0% Merrill Lynch Canada Inc.                                                                      5.0% RBC Capital Markets                                                                                5.0% Dundee Securities Inc.                                                                           2.5% TD Securities Inc.                                                                                      2.5% (1)                                                                          Lead underwriter (2)                                                                         Sole bookrunner and step-up fee of 5.0%

HudBay Minerals (HBM.to): Great News! Pres/CEO David Garofalo to present next week

Hey there dudettes and dudes, do you live in the Montreal area? Do you follow the mining industry? Do you have Monday morning free? Well if so, IKN has the date for you! This excerpt from HudBay Minerals (HBM.to) NR out today gives us the lowdown:

TORONTO, ONTARIO--(Marketwire - 12/03/10) - HudBay Minerals Inc. ("HudBay", the "company") (TSX:HBM - News)(NYSE:HBM - News) announced today that David Garofalo, President and Chief Executive Officer, will be speaking on Monday, December 6, 2010 at 10:30 a.m. ET at the 2010 Desjardins Securities Basic Materials Conference held in Montreal, Quebec at Le Windsor. CONTINUES

Yes indeedy, you too can attend and find out stuff about this most fascinating of companies. And just in case the meeting gets a bit flat and you find the Q&A session at the end of Garofalo's presentation needs a bit of perking up, here's a bit of information you might like to quiz him on.

ANNOUNCEMENT OF LAWSUIT IN CANADA AGAINST MINING COMPANY RELATING TO KILLING OF MAYAN LEADER 

For immediate release: December 1, 2010 

Toronto, Canada and Guatemala City, Guatemala: Angelica Choc and her lawyers announced
today a lawsuit against Canadian mining company HudBay Minerals Inc. relating to the killing
of her husband, Adolfo Ich Chamán. On September 27, 2009, Adolfo Ich, a respected Mayan
Q’eqchi’ community leader and an outspoken critic of harms and rights violations caused by
mining activities in his community, was hacked and shot to death by security forces employed at
HudBay Minerals’ Fenix Mining Project in an unprovoked attack near the town of El Estor,
Guatemala. continues here

Interesting stuff, right? Well let's find out a bit more starting with the statement made by Angelina Choc, Adolfo's widow:

Angelica Choc’s Statement 

My name is Angelica Choc, and I am indigenous Mayan Q’eqchi’ from the community of La
Uníon, in the Municipality of El Estor, Republic of Guatemala. 

Just over a year ago, my husband, Adolfo Ich Chamán, was killed by security forces employed at the Fenix mining project in Guatemala – a mining project owned by Canadian company HudBay Minerals. In the afternoon of September 27, 2009, I watched my husband leave our house for the last time. I later learned that mine security forces had surrounded my husband, dragged him through a gap in a fence and hacked at him with machetes. Then the mine’s chief of security shot him in the neck at close range. This attack was unprovoked. My husband was a teacher, a community leader and a defender of indigenous Q’eqchi’ land rights. I believe he was killed because he spoke out about the rights violations caused by Canadian mining in Guatemala. I believe he was killed because he was encouraging communities to stay united against the harmful practices of the mining company. It is very painful to remember such shocking tragedy. The days since my husband was killed have been very hard. There has been no justice. The man who killed Adolfo remains free. And the mining company has not been held accountable. My five children have lost a father; I have lost my husband; and our community has lost a leader. We need justice for these losses. 

If my husband were here today, I know what he would say. He would say the same things he has been saying for years. He would say that our Q’eqchi’ communities are part of an ancient people. That we retain our own customs, traditions and values from the time before our grandfathers and grandmothers. He would say that we reject the way the mining company has operated in our community. That we demand justice for the harms that they have caused to us. And he would say that we must continue the struggle.
This past year has been a time for silence and for mourning; now the time for action has come.

And for further fun reading, check out the legal proceedings papers filed in Canada against HudBay this week.  So once HudBay (HBM.to) has finished their slick and positive presentation on Monday I'm sure you guys won't be short of a subject of healthy and spirited conversation. And then when it's all over, don't forget to tell David Garofalo to go fuck himself.


UPDATE: Jack Caldwell over at I Think Mining also examines the HudBay Fenix case today. Fortunately for the world his prose is far more measured than the IKN snarkfest, but Caldwell does finish with a flourish (and one this author thoroughly agrees with):

"HudBay says it is continuing to evaluate the property.  I bet that they, as many other Canadian mining companies, will choose to stay away from mining in Guatemala for the foreseeable future.  I for one would not buy shares in the hope of successful mining by Canadians in Guatemala."

Here's the whole I Think Mining post. It's well worth a read and Caldwell knows Guatemala as well, having recently been there on mining biz.

Goldcorp (GG), Guatemala, Marlin, Criminal Charges and general country risk

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 Goldcorp

Strangely 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.

x

Colombia, bastion of human rights

To celebrate the Clintons' (both of 'em) arrival and hangout in Colombia, the International Trade Union Confederation (ITUC, the world's biggest union body) released its annual survey of world deaths due to trade union activity today. Here's how the numbers look in chart form.

click to enlarge

According to ITUC, when it comes to The Americas:

There has been no improvement in the plight of trade unionists on the American continent, undoubtedly owing to the impunity enjoyed by those responsible for trade union rights violations. This is, in substance, the main conclusion that can be drawn from the "Americas" section of the International Trade Union Confederation’s 2010 report on trade union rights violations around the world. It is not surprising that this continent continues to be the most deadly for trade unionists, especially in Colombia, where 48 were killed this year alone.

The American continent has long been the scene of anti-union murders, chiefly in Colombia, Guatemala (16) and Honduras (12), together with abductions, death threats, attacks and even raids on trade unionists’ homes.

Whilst Latin America may have shown greater resistance to the financial turmoil than other parts of the world, the global financial and economic crises have had a profound impact on the region’s real economy. The ITUC annual survey explains that many governments, such as that of Costa Rica, have used the crisis as a pretext for further weakening trade union rights, adopting measures, for example, to increase labour flexibility.

In Colombia, the world’s most dangerous country for trade unionists (Colombia accounts for 60% of all the murders committed around the world on the grounds of trade union activities), the endemic climate of anti-unionism would appear to have become even more deeply rooted. In addition to the many reported murders, there are the cases that have not been registered, as well as the attempted murders, disappearances and death threats. Violence against women is also on the rise: five of the 48 trade unionists assassinated were women. The facts established in the ITUC report point clearly to the fact that the impunity enjoyed by those responsible for these crimes erases any hope of eradicating the anti-union climate in Colombia continues here.

This must be why Mish Shedlock extols the virtues of Colombia. The full ITUC report or the regional sections thereof can be downloaded here.

The Pacaya eruption, Guatemala

This Spanish language video is the last dispatch from Guatemalan journalist Anibal Archila before his death (QEPD).

In the report he talks of being as close as 60m from the lava flow and saying that the heat was almost unbearable. Shortly after filing this report on the scene of the Pacaya volcano eruption he was hit in the back by a flying rock from the eruption and disappeared from sight. Six hours later his body was found by rescuers. His is one of three deaths reported from the eruption, as well as many injured and some 15,000 evacuated people.

Meanwhile, President Colom of Guatemala has declared a 'State of Calamity' due to the eruption. Guatemala's main 'La Aurora' airport is closed due to ash falls on the runway and plenty more disruption to normal life is coming through.

We definitely don't like Lewis Amselem

I heart Machetera. Here's the start, click thru to read the rest. Seriously, quel sac de douche:

Lewis Amselem, the head of the U.S. delegation to the Organization of American States (OAS), who called President Manuel Zelaya’s return to his country “irresponsible” and “foolish” was denounced years ago for having concealed the identities of individuals, one of whom was a U.S. national, who tortured and raped a U.S. nun in Guatemala.

CONTINUES HERE

Also, check out the top compilation RB has put together over at ten percent.

Guatemala: President Alvaro Colom accused of murder by the murdered man

Check out this CNN report (extract below) that has Rodrigo Rosenberg Marzano, now dead, accusing the President of Guatemala of his death from beyond the grave and explaining why his President had him killed in meticulous, 18 minute detail in the youtube video that follows (it's part one of two, it's nine minutes long and it comes with good English subtitles...you can link thru to part two once it finishes).

Heavy, heavy stuff.

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(CNN) -- The Guatemalan government has dismissed allegations that it was behind the death of a lawyer who left a video saying President Alvaro Colom would be to blame if anything happened to him.

The lawyer, Rodrigo Rosenberg, was shot dead Sunday while bicycling in Guatemala City.

A video surfaced Monday in which Rosenberg -- seated behind a desk and speaking into a microphone -- linked Colom and an aide to his death.

"If you are watching this message," Rosenberg says on the video, "it is because I was assassinated by President Alvaro Colom, with help from Gustavo Alejos," the president's private secretary.

It was not immediately known when Rosenberg made the video. It turned up Monday after his funeral and was posted on YouTube and distributed to other media outlets by the newspaper El Periodico de Guatemala.

The government promptly responded, rejecting the assertions and saying they were meant to create "political chaos."

CONTINUES HERE

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Remittances in LatAm, 2008 (the chart of the day)

There has been ink spilled already on the slowdown on LatAm remittances (i.e. money sent back from industrialized nations by LatAm citizens living over there) that the financial crisis is causing, but so far the analysis has been stuck at the amounts of money being sent over and hasn't really examined which countries are more likely to feel the pinch.

This chart shows the percentage of GDP made up by incoming remittances for the major LatAm countries (with all due respect places like Belize are left out as their tiny GDPs skew the results out of shape and don't provide a fair comparative sample). The remittances data used comes from the Interamerican Development bank and the country GDP figures are from the CIA using the purchasing power parity (PPP) figures.

Click to enlarge

Top of the pops on this poll is El Salvador, a country that relies on cash sent home for 8.35% of its country GDP; that's an enormous figure and is comparable to the direct effect copper has on the GDP of Chile. Next up are three other Central American states, Guatemala (6.15%), Nicaragua (5.76%) and the Dominican Republic (3.73%). Only then does South America appear, with Ecuador (2.64%), Bolivia (2.51%) and Paraguay (2.4%).

Mexico is next at 1.59% but deserves a special mention due to the absolute size of its remittances trade. At U$25.145Bn it is by far the largest destination for remittances (second is Brazil at U$7.2Bn) and Mexico in fact accounts for 38.44% of all remittances received in LatAm in 2008.

Finally, the trio of Costa Rica (1.25%), Peru (1.24%) and Colombia (1.19%) are the other three countries that beat the regionwide average of Remittances/GDP of 1.09%. It's safe to say that all of the above countries will feel the effects of a slowdown in remittances in 2009 and beyond, with the first tranche of Central American states, Mexico, Ecuador, Bolivia and Paraguay feeling the worst effects.

Goldcorp at Marlin, Guatemala

The BBC is running a report today entitled "Canadian mine accused of causing skin infections". The subject is Goldcorp's (GG) Marlin mine in Guatemala and the report contains the two photos of children you can see here. The BBC report is clearly a hit-piece, but that's not necessarily a bad thing, either. Sometimes the world needs a nasty photo and a story of mining hatred to get the real story out in the open...just ask the locals around Monterrico's Majaz /Rio Blanco project.

I'm telling you now that I'm not an expert on this mine and the ongoing controversy it has caused (today's BBC note is not new news in the enviro-world). There are always two sides to these issues and there's no way I'm going to ignore my own ignorance and rush to judgment on this. For a better idea of the story for the environmental protector's point of view (and with plenty of links) I found this post dated to 2007 that sums things up pretty concisely. As counterpoint there's a wealth of information, reports etc on Marlin and its operations (as well as the social spending projects that GG has sponsored) at this link on the GG company website.

What I will say is that those are really unpleasant photos for a father of two young girls who lives in mining country.

I'd be interested in getting a view from somebody at Goldcorp on this and I'll be writing to the company with a link to this post today.

Quiztime! The answer

Wow, eleven replies to last night's question! Not bad in such a short space of time. And even better is that nine of you got the answer right. The correct answer is that:

They have all visited Cuba

Yep, that's six heads of state racked up by Raul inside the first two months of anno domini two thousand and nine. For sure Chávez isn't much of a surprise, but Bachelet? That's the first Chilean visit since Allende if memory serves (historians feel free to correct). And Martín Torrijos made his second visit in less than a year. The USA losing regional influence? Surely not!

Anyway, the winner is the fabulous Bina, who managed to get her answer timestamped at 9:10pm last night, less than an hour after I hit the 'publish' button. Good job and rapid fire, Bina. The prize she asked for is a nude photo of Rafael Correa, which explains the image above. Waist-up only, Bina (though I can confirm Correa = 10X Berlusconi).

The final word goes to the most eloquent answer received, from reader MH. A very nicely written mail and deserves a wider audience. Particular agreement Chez Otto for the last sentence:

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Well I'd say they've all managed to catch the attention and likely 'outrage' of a certain group of Miami 'exiles'. The cause of this outrage is most likely because Bachelet, Chávez, Colom, Correa, Fernández and Torrijos have been able to have a native mojito with real Cuban mint and rum unencumbered by an embargo and travel restrictions, which means unlike a 'real' democracy all those leaders of faux 'dictatorships' have been able to visit Cuba in 2009.

I don't know if this however is held in common between all those leaders - but I hope it is true given how much Cuba has helped Latin America (Guatemala, Venezuela, and Ecuador I am sure about) - that all of these leaders have also pledged to help Cuba rebuild after the devastating hurricanes last year. The people of Cuba are amazing resilient, but they should never be forced to go it alone.

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The new Oxfam report on mining in Central America

Via the excellent Tim's El Salvador Blog, word reaches IKN that Oxfam has published a new report entitled "Metals, mining, and sustainable development in Central America" (get your copy of the report by clicking that title).

Now for sure, there are plenty involved in the mining industry that will read that first paragraph and roll their eyes while thinking "oh, gawd, another bunch of treehuggers that want to ban mining", but those eye-rollers would be wrong. Yes, the report is critical. Yes it does clearly point out that miners often exaggerate the potential benefits of a project to the local and national community and downplay the negatives that are then later experienced by those living in the area. But no, this isn't one of those "ban the dirty, horrible smelly miners" hit pieces.

What it does do is examine the patchy track record of mining companies over the last decades and say "look guys, you can't treat people like this any more". Here's the final paragraph of the conclusion to give you an idea:

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Given the high stakes involved, local communities must play a pivotal role in project and policy decision-making. This should start with universal support for communities’ right to free, prior, and informed consent. To support that consent process, host governments and mining companies should create a space in the public discourse where stakeholders’ interests can be respected and reconciled. This is especially true in Guatemala, Honduras, and El Salvador, where political and social factors may limit the role of certain groups, such as indigenous peoples, in the policy-making process.

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I think that's fair enough, and the enlightened mining companies of this world have now been operating responsible practices like these and more (and variations thereof) for plenty of years. With its report Oxfam is critical but constructive, laying out both sides, showing what hasn't been done right in Central America and saying how the industry could and, in its opinion, should move forward.

This is a useful report that gives the mining industry the other view without resorting to hyperbole and is highly recommended. Here's the link to the 40 page PDF report again, so there's no excuse. Wiser mineheads will read it.