According to a recent study, companies that carry out mining activities in the country, operate with a profit margin of 22% before paying taxes.
The report prepared by Central American Business Intelligence (CABI), details that companies in the mining industry operating in Guatemala can achieve extraction costs of up to 55%.
The controversial taxes on the distribution of cement and mining royalties fell from $0.65 to $0.19 and from 10% to 1%, respectively.
With the publication of the new values in the official newspaper La Gaceta, an end has been put to the doubts that arose in companies over the fact that it was not clear what were the correct amounts for each tax, after the Constitutional Court declared that the mechanism by which initially the new taxes were set was unconstitutional.
The miners of construction aggregates oppose the increase of 1% to 10% on mining royalties and propose that the tax should be proportional to the volume and type of material extracted.
The Mining Association of Guatemala (AMG) wants royalties to remain at 10% for gold and silver, while for limestone, sand, plaster and other building materials for them to be reduced to 3%, negotiable.
The mining union is opposed to the increase from 1% to 10% for precious metals and the elimination of voluntary royalties to municipalities contemplated in the 2015 budget.
Besides the new tax on the distribution of bags of cement and telephony, increased royalties for the exploitation of minerals and construction materials are also part of the new fiscal package which comes with the 2015 budget.
The Guild of Extractive Industries would accept the increased royalties as agreed at the start of the Pérez Molina administration.
An article in Prensalibre.com reports that Mario Orellana, president of the Union of Extractive Industries, said "... The initiative proposed by the Ministry of Energy and Mines (MEM) is embodied in the agreement that we voluntarily accepted at the start of this government.
From these revenues the mine gave the State of Guatemala 4.25% in royalties.
The Marlin mine in San Marcos generated these revenues during the first half of 2013. "The cost of gold mining in San Marcos is $182 on average and is still the lowest of the 11 companies of which Goldcorp owns or has interests in in the continent," noted an article in Prensalibre.com .
Bill 618 establishes a system of royalties and taxes on companies engaged in oil exploration and extraction in Panama.
The project, which amends Act 8 of 1987, has been approved on its first reading by the Commerce Commission of the Legislative Assembly of Panama.
The rule "includes a legal and tax regime applicable to the exploration and production of hydrocarbons, making changes to the description of permits and contracts for exploration and exploitation, as well as adjustments to the percentage received by the state", reported Panamaamerica.com.pa.
The San Rafael mining company will contribute 5% royalties to the departments of Santa Rosa and Japala, amounting to more than $80 million annually in taxes and profits for the country.
After several months of conflicts the mining company San Rafael, which is expected to start exploiting minerals later this year, and these two departments have reached an agreement.
Royalties on mineral holdings in Guatemala will be imposed on three levels related to the base value of the extracted material.
According to Mario Marroquin, president of the Union of Mining and CEO of the company Montana Exploradora (main extractor of gold and silver in Guatemala), precious metals are those with the highest and there are other lower rates for base metals and non-metallic minerals.
The Guatemalan Nickel Company (CGN by its initials in Spanish) has reported that it will pay voluntary royalties semi-annually amounting to 2% of its commercialized mining product.
Under ministerial agreement 009-2013 signed on the 6 of December, the company CGN has agreed to pay a voluntarily contribution of 2% to the state and municipalities.
"Of that 2 percent, 1 percent is to be distributed equally to the State and the municipality of El Estor. The other 1 percent is to be split between the municipalities of Amates, Puerto Barrios and Livingston, in Izabal, and Panzós , in Alta Verapaz, and the Ministries of Environment and Energy and Mines.
Although the law does not require them to, the two mining companies pay voluntarily royalties of 4% to the Panamanian State.
Both mining companies indicated to Capital Financiero that although there was an amendment to the Code of Mineral Resources in Law 13 of April 3, 2012, their concession contract with the Panamanian state is governed by Law 9 of February 27, 1997 , therefore the changes made to the reform are not applicable to their activity.
The Constitutional Court of Guatemala has received allegations from indigenous groups regarding the constitutionality of the Mining Act which has been in force for 15 years.
Concerns about a possible court ruling in favor of the constitutional motion filed by the indigenous people was demonstrated by the presence of entrepreneurs in the courtroom.
According to an article in Siglo21.com "the first to make their arguments were the proponents of the constitutional motion, via their lawyer Lucia Xiloj, who explained that the mining law, as determined by the CPO, is unconstitutional because it was approved 6 days after the ILO Convention 169 took effect, which stipulates in Article 6 the right to prior and informed consultation. These arguments were refuted by Mario Fuentes Destarac, representing the Chamber of Industry. "
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.