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Economy & Business - July 2020


GUATEMALA | Operations suspended at ‘Fénix’ nickel mine. On 19 June Guatemala’s constitutional court (CC) upheld an earlier ruling ordering the suspension of the ‘Fénix’ nickel mine in El Estor municipality, Izabal department, on the grounds that it violates the right to consultation with local communities. Run by the Compañía Guatemalteca de Níquel (CGN), a subsidiary of Swiss-based Solway Investment Group, the Fénix mining project was announced in 2014 with US$1.5bn investment and predicted to create over 5,000 local jobs with the exploitation license granted by Guatemala’s energy & mines ministry (MEM) in April 2016. The CC had already suspended CGN’s licence for the Fénix site in July 2019, pending its final decision. However, CGN was not ordered to stop operations by the government and had continued to extract ore until the court issued its final ruling on 19 June. In its latest ruling the CC also ordered the government to reduce the size of the CGN concession from 248km2 to 6.27km2, as this is the only area covered by the company’s incomplete environmental study. Mining in this restricted area is also prohibited until the consultation with the local community has been carried out. The CC’s decision follows similar rulings against the Canadian-owned Escobal silver mine in 2017 and the US-owned ‘El Tambor’ gold mine in 2016, also for failing to consult with local indigenous populations. In 1996 Guatemala ratified Convention 169 of the International Labour Organization (ILO), which entitles indigenous communities to free, prior and informed consent before the commencement of development projects that will directly impact them. 

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