Guatemala president pledges swift conclusion to Escobal consultation Bnamericas Published: Tuesday, October 08, 2019 Legislation & Regulation
Guatemala president pledges swift conclusion to Escobal consultation Guatemalan President Jimmy Morales said a consultation required to restart operations at Pan American Silver's Escobal mine will be completed by the time he leaves office in January.
The consultation, run by the energy and mines ministry (MEM) in communities around the suspended silver-lead-zinc mine, is one of four key projects Morales said he will conclude prior to the handover of power to president-elect Alejandro Giammattei on January 14.
The others are the US$59mn Chimaltenango bypass, the 2018 census and putting a US-backed migration agreement into effect.
"All will be finished by the end of my term," Morales was quoted as saying by local daily Prensa Libre.
Escobal, one of Latin America's biggest silver producers, has been halted since June 2017 due to a license suspension and roadblock.
REALISTIC?
The president's pledge – confirmed by social communication secretary Alfredo Brito – has met with skepticism with less than 100 days left of his term.
Giammattei – who won a resounding victory over former first lady Sandra Torres in the August run-off – urged Morales not to attempt in three months what he was unable to achieve in four years, Prensa Libre reported.
And a January target to conclude the Escobal consultation does appear optimistic.
The constitutional court last year ordered a four-stage consultation process, following the International Labour Organization's convention 169 (ILO 169).
The first stage review has been completed with the second stage pre- consultation underway, Vancouver-based Pan American said in May.
But doubts about the formal consultation (stage three) have emerged, with Giammattei saying rules over how convention 169 is applied have not yet been established.
The president-elect's choice for mining minister, Alberto Pimentel, told television station Canal Antigua he aims to settle the issue in the first 90 days of Giammattei's presidency.
LONG-TERM APPROACH
With question marks hanging over the formal consultation and a fourth- stage supreme court approval to follow, a swift conclusion – as outlined by Morales – appears unlikely.
Pan American CEO Michael Steinmann has said he is taking a long-term approach regarding the asset, saying he wants to take time to listen to communities’ concerns.
The company has also declined to give any estimate for the consultation timing.
“The ILO 169 consultation process is led by the energy and mines ministry, and we are supporting as and when directed,” Siren Fisekci, VP, investor relations and corporate communications, told BNamericas in an emailed statement.
“As this is a government-led process, we are not able to provide any timelines or estimates for completion at this time.”
FRESH APPROACH?
Giammattei's victory in the polls followed pledges to root out corruption and tackle widespread poverty in the Central American nation – areas in which Morales has failed.
While establishing the conditions needed for a mining rebound was not a key campaign pledge, the sector is a potential vehicle to lift communities out of poverty, while boosting tax receipts.
Incoming minister Pimentel highlighted restoring legal certainty as a top priority.
There is a long way to go to meet this aim.
While the Escobal consultation drags on, the situation for miners nationally deteriorated in July with the constitutional court's suspension of Solway Investment Group's Fénix nickel mine.
Kappes, Cassiday & Associates is also pursuing an international arbitration claim against the Guatemalan state over the previous suspension of its Tambor gold operation.
The timing of the Escobal consultation is unclear, but a successful conclusion would be just a first step toward putting Guatemala back on the map as a destination for mining investment.
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