Although in Guatemala the right to operate the El Escobal mine was granted in law, the project has been suspended for two years, making future investments in the country unviable.
The disadvantages for Minera San Rafael's operations date back to 2017, when in May of that year the Guatemalan Center for Legal, Environmental and Social Action (Calas) filed a protective action, arguing that the Ministry of Energy and Mines had not conducted the necessary community consultations before authorizing the licenses.
The contribution of mining activities to GDP has reduced in recent years, and recent cases of suspension of operating permits are not helping to improve the sector's image.
In 2012 the contribution of mining activities represented 2.8% of the Gross Domestic Product (GDP), but this proportion has been decreasing in recent years, falling to 1.1% of GDP in 2015.On top of this are the recent cases of suspension of exploration permits, which have generated uncertainty among the sector's entrepreneurs.
The decline in production and lower international prices explain the 20% drop in sales abroad in the first half of the year compared to the same period in 2015.
The results from the first half of the year come at a time when the suspension of several mining licenses has started to cause uncertainty among companies and concessionaires in the sector. See: "Another Two Mines Suspended in Guatemala" and "Mining Moratorium Proposed".
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.
Elperiodico.com.gt reports that clashes with opposition social groups "is a matter of the state and could find a possible solution next year, said Fernando Castellanos, director of mining at the Ministry of Energy and Mines (MEM) . "
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%.
An article in Elperiodico.com.gt 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.
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.