Guatemala Will Not Participate in Existing Mining

The mere announcement of the draft constitutional reform in Guatemala so that the State can participate as a partner in mining companies has brought down the shareholder value of Tahoe Resources by 22%.

Wednesday, July 11, 2012

An article in reveals the uncertainty and the damage amonst investors and businesses caused by the announcement of reforms to the Constitution that would include authorization for the State to participate by holding up to 40% of the shares belonging to companies engaged in metal extraction.

According to the president of the Union of Extractive Industries (Gremiext), Mario Marroquin, President Perez Molina and the Minister of Energy and Mines, Erick Archila, clarified that the measure "is not an expropriation or nationalization, that it will not apply to companies already operating in the country and it will be participation of an optional nature", but also making clear that the proposed reform is being upheld.

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More on this topic

Mining Companies Concerns in Guatemala

December 2012

Mining businesses are concerned about communities who are resistance to mining activities, delays in the approval of permits and amendments to the Mining Act.

Next on the list of concerns for the sector, is the evolution of the global crisis, which investments in the extractive industry are dependent on.

Opposition to Mining Law Reform

July 2012

Mining companies in Guatemala are opposing the state being able to become their business partner, noting that it may be the prelude to nationalization or confiscation.

Article 125 of the bill to reform the current legal framework for the extractive industries in Guatemala, would enable the state to have participation in companies that exploit natural resources.

Guatemala’s Constitution Reform

June 2012

President Pérez Molina has presented his proposal for constitutional reform, which includes allowing the state to hold up to a 40% stake in companies that exploit natural resources.

The project presented aims to reform 51 articles of the Constitution of Guatemala.

Regarding for the exploitation of nonrenewable natural resources, it proposes:

Guatemala Negotiates Mining Royalties

January 2012

While waiting for the new mining law, the future Minister of Energy and Mines is negotiating a increase in payments to the State, which currently stand at 1%.

Erick Archila, the newly appointed Minister of Energy and Mines of the government of President-elect, Otto Perez Molina, who will take office on January 14, said that they are holding meetings with various sectors, including the Extractive Industries' Guild, with whom they will negotiate the royalties.