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.
In 2017 the value of sales to Germany and Belgium fell by 6% and 29% respectively, which is explained in part by the suspension of operations at El Escobal mine.
According to figures from Banco de Guatemala, between 2016 and 2017 exports from Guatemala to Germany fell from $148 million to $139 million, and to Belgium they dropped from $128 million to $90 million.The decrease in sales to Belgium is explained by the decrease in the export of lead, as it went down from $70 million in 2016 to $17 million in 2017.
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.
Guatemala's industrialists are demanding speed in the resolution of the case against the La Puya mine, property of Exmingua, whose operating permit was annulled a year ago by the Supreme Court of Justice.
At the end of June last year, the Supreme Court of Justice "definitively" revoked theoperating permitfor the mine La Puya, awarded to the company Progreso VII Derivatives. Now the mining union is asking the Constitutional Court to resolve the problem more quickly, consistent with and as a consequence of the ruling issued to OXEC and as a sign of equal rights and respect for the legal certainty of Guatemala.
During 2016 the ten active oil fields produced a daily average of 8,976 barrels, below the 2015 average of 10,000 barrels per day.
Last year total production was 3,285,442 barrels, 10% less than the 3,664,279 barrels produced in 2015.
"... According to the expert Arturo Letona, for over two years no investments in developing new fields have been observed and in the short term it is not expected that there will be a context of rising oil prices on the international market. Letona said that the message for investors with the decisions taken by the Constitutional Court (CC) is one of uncertainty."
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".
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.
A mining group plans to invest $27 million in a specialized port in Izabal which will have the capacity to move half a million tonnes of nickel per year.
Businessmen linked to the mining industry, and especially to Compañía Guatemalteca de Níquel (CGN), could be investing $27 million in the construction of a port to move half a million tonnes of nickel per year.
The service sector is the fastest-growing (19.9%) with 53,129 social security contributors, about 8,850 more than in the same period in 2012. Up until last September 113,067 new contributors signed up, 15,104 more than the 97,963 reported in the same period last year.
Up until September 113 067 new contributors signed up , 15,104 more than the 97,963 reported in the same period last year.
In Guatemala you have to invest an average of $10,000 to cover the costs needed for equipment, furniture, tools, training and administration.
It has been estimated that Guatemalan companies invest an average of $10,000 in the generation of one job, an amount that may vary according to the activity being carried out.
This is according to the Ministry of Labour assessments (Mintrab) in the country.
The industrial and commercial sector of Guatemala believes the measure sends a mixed message and is unfriendly to investment.
According to the president of the Union of Extractive Industries, Mario Marroquin, "it sends a mixed message, because a few days ago the Investment Summit 2013 was held, which presented Guatemala as having potential for investment in many sectors, including mining, and now they are saying that licenses will not be granted, what then happens to those interested in the country? ".
The exploration license for project El Sastre 1 and the application for a similar license for project El Sastre 2 have been canceled.
According to the head of the Ministry of Energy and Mines (MEM) in Guatemala, Erick Archila, the process of forfeiture was started because MEM technicians have repeatedly been prevented from entering to inspect the area where the mine El Sastre 1 is operating, in San Antonio La Paz, El Progreso.
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.
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