Controversial Canadian Silver Mine ‘Likely’ To Reopen in Guatemala Despite Opposition

A decade since it opened, Pan American’s Escobal silver mine awaits outcome of historic Indigenous consultation process

Guatemala, February 26 — For six and a half years, one of the largest silver mines in the world has sat dormant in southern Guatemala awaiting the outcome of a historic consultation process with Indigenous Peoples.

That process — ordered to take place by Guatemala’s highest court — has become the most comprehensive consultation with Indigenous communities ever undertaken on a resource project in the country’s history.

It will inform whether the Guatemalan government reinstates the suspended mining licence of PAS Guatemala, a subsidiary of the Vancouver-headquartered mining giant Pan American Silver (TSX:PAAS). A decision to do so would allow the company to begin extracting the 264.5 million ounces of proven and probable silver reserves accessible through its US$500 million Escobal mining operation.

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But after nearly three years of discussions between government and Indigenous Xinka representatives, opposition to the controversial project remains strong. And as the end of the formal consultation phase approaches, it seemed possible — if not likely — that, up until this year, the Guatemalan government was prepared to re-permit the mine, which first opened under previous ownership 10 years ago last month.

“The most likely thing is that we reach some kind of intermediate point between the two extremes that establishes measures that can be taken so that the project can be viable,” said Oscar Pérez Ramírez, former vice-minister of sustainable development in Guatemala’s Ministry of Energy and Mines, in an interview in Guatemala City last summer.

Earlier this year, Pérez Ramírez was replaced following the election and transition to power of a new government under President Bernardo Arévalo, who ran on an anti-corruption platform and faced repeated attempts to block his candidacy and ultimate inauguration.

One extreme, Pérez Ramírez explained at the time, is that the mine never re-opens. The other is that it restarts with no measures in place to address the needs and concerns expressed by the Parliament of the Xinka People, and the experts who were asked to participate in the court-ordered consultation process.

The anticipated outcome of the process — which was co-created by both governments — will be an agreement about the scope of those measures. What it isn’t is a joint agreement about the fate of the Escobal mine, a decision that ultimately rests with the ministry.

“There are groups that try to convince the Indigenous leaders that the consultation process is the opportunity to have the right to veto,” Pérez Ramírez said. “It’s not a veto.”

Guatemala’s new government has met with Pan American and Xinka Parliament representatives, and the consultation process is proceeding.

A legal right, ignored

Before granting a company a resource exploration or exploitation licence, the government of Guatemala has an obligation to consult with Indigenous Peoples who might be affected by the proposed activity.

Government also has a responsibility to assess the spiritual, cultural and environmental impact that development activities may have on those communities.

Both are requirements under the International Labour Organization’s Indigenous and Tribal Peoples Convention (ILO 169), which Guatemala ratified in 1997 — a year after the official end to decades of armed conflict in the country.

The state would go on to issue 350 mining exploration and exploitation licences between 1997 and July 2023, according to data provided directly by Guatemala’s Ministry of Energy and Mines. The ministry confirmed that in none of these instances did any government administration first consult with Indigenous Peoples in accordance with ILO 169. 

Of the total licences granted, 102 have expired, 229 exploitation licences are active and 19 exploration licences remain active. Guatemala’s new minister of energy and mines Víctor Huga Ventura Ruiz has committed to reviewing these licences and auditing what the ministry has done under previous administrations, according to local media.

Included in this data are the permits for the exploration of the Escobal mine site and for its commercial operation, which began in January 2014.

In 2018, following a temporary suspension of mine activity by a lower court, Guatemala’s Constitutional Court ruled that activity at Escobal remain suspended until a proper consultation process with Xinka people and their representatives could be completed by the government.

“The suspension order has been respected,” said Grahame Russell, director of the non-profit Rights Action and co-author of Testimonio: Canadian Mining in the Aftermath of Genocides in Guatemala. “It’s a hard battle. There’s been great suffering, there’s ongoing violence.”

In April 2013, 20 mine protesters were marching toward Escobal’s entrance when they say they were shot at by the private security personnel contracted to protect the project, which was then-owned by U.S.- and Canada-based Tahoe Resources through its Guatemalan subsidiary Minera San Rafael.

Seven of those protesters filed a lawsuit in B.C. Supreme Court, which was settled out of court by Pan American Silver after the company acquired Tahoe Resources in a US$1.1 billion deal in 2019.

Years of resistance

A 25-minute drive southwest from the Escobal mine, six men form a circle in a dusty dirt yard next to a red Toyota pick-up. They are among the dozens of Guatemalans who regularly volunteer to take shifts at one of two local encampments — small and informal outposts of an organized anti-mining resistance movement.

Behind them, a white banner strung up near the road reads, in Spanish: Rights must be respected, protected and not negotiated.

From picnic tables and plastic chairs, these community members sit and watch traffic trundle along the one paved road to San Rafael Las Flores and the US$500 million silver mine in its backyard.

Since July 2017, traffic monitoring has served as a proxy for determining whether mine activity was taking place during the project’s suspension. No activity has been reported outside of the mine’s care and maintenance operations, the volunteers say.

“More than anything, our struggle is what we can do for our children,” said one of the men, all of whom oppose the mine and all of whom asked to remain anonymous for fear of retaliation by individuals who support the project, which would be one of the country’s largest employers if it were operating at full capacity. “Everyone here knows we would rather die first than have the mine re-open.”

Legacy, for many of the Xinka people engaged in mining resistance activities, is an absence of mining activity on Indigenous lands and territories. It is also clean and potable water — a key focus of consultation discussions amid concerns that activity at Escobal has and will pollute local waterways.

“Our struggle is our own,” said another man. He spoke slowly, thoughtfully, and was dressed head to toe in denim. “We want everyone to understand that we don’t have to live off of the mine.”

But given its size, the economic impact of Escobal is hard to ignore and stands to be significant.

When it opened in 2014, the project had 1,500 employees and indirectly supported between 3,000 and 5,000 other people, said Sean McAleer, Pan American’s senior vice-president of strategic initiatives. His portfolio includes Escobal.

By comparison, the population of San Rafael Las Flores in 2023 was projected to be around 14,300, according to state data.

“It’s really a big part of the Guatemala economy, but it’s a huge part of the local economy. It’s a game changer for the local economy if things go forward,” McAleer said.

“There’s a larger community as well that’s there, that’s not involved in the process that are very hungry for employment, hungry for development and hungry for ideas on what the mine might do to contribute to that.”

If and when the mine resumes regular operations, it will contribute to state and local government revenue through mandated and voluntary mining royalties — revenue that could provide communities with financial support for programs or other initiatives that would not necessarily be funded otherwise.

Slow, steady progress

All key stakeholders in the ongoing Escobal consultation  — the federal government, the Xinka Parliament and PAS Guatemala — generally agree on at least two points.

The first is that progress has been made in establishing greater trust between Indigenous leaders and the federal government. 

The second is that no set timeline exists for the conclusion of the process, a point reiterated by Pan American president and CEO Michael Steinmann during an investor presentation last week. He added that company representatives have met with Guatemala’s new administration as recently as last week and that government had indicated its commitment to the ILO 169 process. 

“I think it is a very good process. We are solid. And it has been taking time, but it was necessary to get it to this point,” Roberto Vélasquez, manager of corporate affairs with PAS Guatemala, said in an interview last year. He previously served as Guatemala’s vice-minister of sustainable development from January 2016 to April 2017.

The Ministry of Energy and Mines currently lists the second phase — the formal consultation period — as ending in March 2024, but that could get extended for any number of reasons, including changes within government.

The third phase involves the Constitutional Court certifying that the consultation process was completed satisfactorily.

Though uncertainty still looms over the Escobal project — and how any government decision may be received by project opponents — one positive outcome has been the process itself, and the recognition of the basic human and Indigenous rights of Xinka Guatemalans.

“I perceive it as a revindication process,” said Aleisar Arana Morales, president of the Xinka Parliament, which is composed of individuals who represent 59 separate ancestral authorities. “We’ve managed to receive respect towards our people.”

Last year, Arana Morales travelled to Washington, D.C. to accept the Human Rights Award from the non-profit Robert F. Kennedy Human Rights organization, which recognizes human rights defenders who are coordinated and who assume a level of risk in the work that they do.  

“They’re doing extraordinary work,” said Angelita Baeyens, vice-president of international advocacy and litigation with Robert F. Kennedy Human Rights, in an interview prior to Guatemala’s presidential election.

“Think about the giant this Xinka Parliament has been fighting against for years. Their struggle involves one of the biggest companies in the mining industry that [had] the full support of a very corrupt government,” she added. Guatemala has repeatedly been ranked as one of the most corrupt countries in the world.

“It takes a village, no? More than a village in this case.”

Arana Morales said the parliament’s hope is that the ongoing consultation process offers a blueprint for how future consultations with Indigenous Peoples could progress in a meaningful and transparent way — not only in Guatemala, but throughout Latin America.

This reporting project was made possible by support from the Pulitzer Center, as well as the Overseas Press Club Foundation.