Multinational Gold Rush in Guatemala

September 25, 2007

Somewhere amid the chaos that erupted January 11 along a stretch of the Pan-American Highway in Guatemala a protestor lost his life. The victim was later identified as Raúl Castro. He was 37.

With the exception of the man’s name and age, information about what transpired that day in the northern province of Sololá is murky at best. Reports about how many police and soldiers the government dispatched vary from a couple of hundred to as many as 2,000. Nor is it clear who threw the first stone, fired the first shot or tossed the first Molotov cocktail. Simply put, the scene was pure chaos. Fires and exploded tear-gas canisters choked the air. The piercing sounds of gunfire, sirens and manic shouting replaced what would have normally been the hum of highway traffic. Hundreds of police, soldiers and campesino protestors scuffled half-blinded in the haze.

It’s sad to say, but the death of a single person under violent circumstances doesn’t usually constitute news in Guatemala, where murder and assassinations are rampant, even now, nine years after the official end of the country’s 36-year civil war. And yet the story of Castro’s death—presumably at the hands of government security forces—continues to arouse steady, albeit modest, public attention. There’s something about that death, or more specifically, about the circumstances leading up to the conflict, that has set off persistent alarm—not only in Guatemala but also abroad.

Protests in Sololá actually began more than a month before Castro’s murder. Starting in late November, demonstrators—campesinos (mostly of Mayan descent), local leaders, environmentalists and Catholic Church-affiliated representatives—took up positions along the Panamericana highway. Their goal was to impede the transport of materials and equipment for a soon-to-be-operating gold and silver mine in neighboring San Marcos province, some 93 miles away. For 42 days they were successful, and then the government called in its troops.

The mine, known as the Marlin Project, is located near the towns of Sipacapa and San Miguel Ixtahuacán. It is owned and operated by a company called Montana Exploradora de Guatemala. The company is not, as its name would suggest, Guatemalan. Instead, Montana Exploradora is a subsidy of Glamis Gold, a company that is registered in Canada (it has a post office box in Vancouver) but maintains its headquarters in the United States.

Glamis Gold stands to make a fortune on the Marlin Project. Once in operation, the mine, which is spread over some 250,000 acres, is expected to yield about 250,000 ounces of gold and 3.6 million ounces of silver per year, output that will quickly make it the company’s most profitable venture. Furthermore, of the company’s various operations, the Marlin Project will be its least expensive to run, with an estimated cash cost of just $90 dollars per ounce of gold, significantly lower than Glamis’ overall cash-cost average of approximately $150 dollars per ounce. Best of all, boasts the company on its Web site, “The project is fully permitted and enjoys strong local support, as well as backing by the Guatemalan Government and the World Bank.” Well, at least some of that is true.

The World Bank threw its weight behind the project with its private-sector arm, the International Finance Corporation (IFC), which recently granted Glamis Gold a $45 million loan for the development of the Marlin Project. It’s also clear that the Guatemalan government is fully supporting the project, as its willingness to send soldiers to aid the company suggests. Proponents of the project say Guatemala, one of the hemisphere’s most impoverished countries, desperately needs this type of foreign direct investment. Foreign companies, they say, create jobs and boost government coffers by supplying tax revenue.

In fact, the government is so supportive of foreign mining ventures that in the last decade (since the signing of the 1996 peace accords), Guatemalan leaders have granted foreign companies more than 300 exploration requests and mining concessions. Many of those companies are Canadian.

Not surprisingly, Canada’s Ambassador to Guatemala, James Lambert, has thrown his active support behind the country’s budding mining industry. In an article published last November in the Guatemalan daily Prensa Libre, Lambert penned a defiant defense of Canada and its mining companies as the Glamis controversy heated up.

“Is it possible,” asked the Ambassador, “for a country to be recognized as one of the most socially and environmentally responsible countries in the world, near the top of the list in the Environment Sustainability Index and, at the same time, be a major mining country, with a mining industry that contributes $41.1 billion to its economy?” And he answered his own question. “Yes,” said Lambert, Canada is that responsible country, and its companies mine responsibly at home. There’s no reason, therefore, why they wouldn’t do the same in Guatemala.

But there is a reason, say opponents to the project. The Ambassador’s assurances aside, Glamis Gold and the other companies waiting in the wings are likely to cause tremendous social and environmental damage. Why? Because in Guatemala, with its weak, pro-investment government, tightly controlled media and general atmosphere of repression, foreign companies can simply get away with it.

Despite Glamis Gold’s insistence that its operations “enjoy strong local support,” the list of people and organizations opposing the Marlin Project is growing. A poll conducted late last year by the survey company Vox Latina suggested that in Sipacapa and San Miguel Ixtahuacán more than 95% of local residents disapprove of the mining activity. Almost as many residents think metal mining will have a destructive influence on their towns, while only just under 9% are buying the line that the Marlin Project will bring wealth to the area. The poll, conducted in October 2004, involved 400 interviews with adults and has a 5% margin of error.

Backing the townspeople in opposing the mine are local Church leaders, labor unions, numerous mayors from across the country and several environmental groups. Alvaro Ramazzini, the Archbishop of the Diocese of San Marcos, has been a particularly outspoken critic of the project. In an open letter to Guatemalan President Óscar Berger last September, the Archbishop wrote that the country’s current laws provide an open invitation for potentially harmful mining practices. “A mining company will invest in countries where the laws governing mining constitute an open door. This is the case for Guatemala,” he explained. Ramazzini’s public stance against the project has earned him at least one death threat in recent months.

Nevertheless, the opposition has not been silenced. In early February, three weeks after the January confrontation, thousands of protestors in Sololá once again took to the streets, this time with the backing of 19 of the province’s town mayors. Also, Archbishop Rodolfo Cardinal Quezada Toruño, the country’s highest-ranked Church leader, has sided with the opposition, as has the San Marcos-based union, the Movement of Catholic Workers (MTC).

It was through the MTC that Father Ernie Schibli of the Montreal NGO Social Justice Committee first learned about the mining controversy in Guatemala. This is not simply a Guatemalan problem say Schibli and other concerned Canadians. Glamis Gold, at least in name, is a Canadian company, as are several other mining companies with plans to operate in Guatemala. “The whole country’s been mapped out,” he says. And since the Canadian Ambassador is actively backing these exploitative projects, says Schibli, people in Canada must direct opposition to their own government. “That’s where Canadians have the most leverage,” he explains.

Last November, Schibli went to Guatemala to investigate the situation in San Marcos firsthand. What he encountered confirmed the findings of the Vox Latina poll. The local, mostly Maya, residents simply don’t support the project. “Despite what the mining company has to say, the broader community and the indigenous people of Guatemala as a whole have rejected their claims. They’re firmly opposed to the mine,” says the priest.
Meanwhile, says Schibli, in Canada, opposition “has snowballed.” Canadian NGOs siding with Schibli’s Social Justice Committee include the Canadian chapter of Friends of the Earth, the Toronto-based Rights Action and the Atlantic Regional Solidarity Network (ARSN) of Nova Scotia.

In March, ARSN sponsored a tour in Eastern Canada called “Mining the Connections.” One of the principal participants was José “Filóchofo” Chacón, a well-known political cartoonist who also works closely with Madre Selva, one of several Guatemalan environmental groups trying to bring attention to the mining issue.

According to the cartoonist, the risks posed by Glamis Gold and other foreign mining companies are not only environmental but also economic and social. Problem number one, says Chacón, is the measly 1% in royalty fees companies like Glamis are required to pay under Guatemala’s flexible mining laws.

“One percent,” he emphasizes, “for every $100 that the mining company takes in earnings, they leave 1% for the country. In other words, we’re talking about a law that’s shameful, a law that’s defeatist, a law that belongs to governments that are willing to hand everything over. What’s more, that 1% is divided in half. They leave 0.5% for the communities being affected. The other 0.5% goes to the state.”

Undoubtedly, argues Chacón, communities such as Sipacapa and San Miguel Ixtahuacán are going to need every penny, because the Marlin Project will almost certainly result in environmental and health problems. One of the biggest effects of the mine will be increased competition for water. The average Guatemalan campesino, according to Madre Selva, uses roughly 30 liters of water per day. The Marlin Project, by its own estimates, will use 250,000 liters per hour, massive consumption that threatens to deprive local subsistence farmers of water they need to survive.

Pollution from the constant flow of trucks winding in and out of the mountainous region as well as from the oils and gases used to operate the mine’s heavy machinery is a likely problem. Most alarming, however, is the vast amount of cyanide used by the mining process to extract gold and silver. Inevitably, say environmentalists, at least some of that cyanide will be absorbed by the environment and poison ground water, posing a long-term health risk to nearby residents.

Glamis Gold insists these concerns are blown way out of proportion. For one thing, it says, water competition need not be a concern, as the Marlin mine will only be using water pumped from its own 1,000-foot well. Nor should residents worry about cyanide poisoning. “The cyanide process,” Glamis explains on its Web site, “is entirely contained in the process plant with redundant liners and safety systems.” After all, boasts the company, in preparing the Marlin Project for operation, Glamis Gold dutifully conducted the requisite environmental impact study (EIS), and was subsequently granted approval by all the necessary parties. The EIS alone, says the company, should convince residents they have nothing to worry about. Or should it?

Colorado-based geologist Dr. Robert E. Moran, who’s reviewed EIS’s from all around the world, has carefully reviewed Glamis’ impact study and isn’t so sure the document offers anything in the way of assurances. Simply put, “the general quality [of the report] is poor,” he says.

“Let me start by saying it’s not the kind of report that would be acceptable in Canada and the U.S. It’s too poorly written, too poorly organized. It lacks the basic information you need. There’s not much data there.” Moran says he’s heard the 1,000-foot well promise before. “It’s a pattern you see over and over with projects in developing countries.” As far as potential cyanide pollution, it’s the same story. “They all have redundant protection systems, but they almost all have leakages,” says Moran. “It’s over simplified to say waste doesn’t get released. If you leave out about 50% of the facts, then their statement is OK.”

While in Canada, José Chacón was able to meet with at least a few Canadian public officials, who made some sympathetic comments. Certainly, for those opposing the Marlin Project, some response is better than no response. However, the real power to influence the situation rests in the hands of the Guatemalan leaders themselves. Unfortunately, says Chacón, President Berger’s government simply won’t listen.
“If the government of Óscar Berger were really democratic,” he insists, “the first thing they’d do is pay attention to what the communities are saying. The mayors of many communities are getting together to say they don’t want this. But the mining companies have a lot of economic power.”

Guatemalans have seen gold prospectors before, starting with the first Spanish conquistadors who ventured into the country during the early part of the sixteenth century. They’ve also had a tumultuous past with North American companies that have set up shop and, like the United Fruit Company in the 1950s, haven’t hesitated to use any means necessary in protecting their interests.

In the early 1950s, Guatemalans remember, then-president Jacobo Arbenz instituted a number of “radical” measures, including a land reform plan that involved exercising the government’s powers of eminent domain over uncultivated land owned by United Fruit. The government, said the President, was prepared to pay for the land fair-and-square, basing purchase prices on the company’s own grossly undervalued land assessments. The plight of the well-connected U.S. company soon caught the attention of authorities in Washington, and in 1954 the CIA successfully executed an operation that resulted in Arbenz being ousted in a coup. In 1960 war broke out. The conflict didn’t officially come to an end until 1996. By then, more than 200,000 people had been killed, most of them indigenous, murdered by government troops who forced their way into villages in the same highland regions that are now being prepped for exploitation by North American mining companies.

Taking all of that into consideration, it’s easy to see why the specter of government troops, dispatched in the hundreds to break up a protest against Canadian and U.S. mining interests, might arouse a sense of foreboding among villagers in highland Guatemala and among the people who empathize with their plight. Indeed, Raúl Castro’s death, even in a country that continues to be as violent as Guatemala, is eerily disconcerting. “When we talk about the army,” says José Chacón, “we’re talking about an army that’s been accused of massacres. We’re saying that now, during this time of peace, the army is returning once again to the communities. This produces a psychological impact.”

In signing the 1996 peace accords, authorities in Guatemala agreed to abide by a number of international laws, including Convention 169 of the International Labor Organization (ILO). Among other things, this law states that indigenous peoples must be consulted and allowed ultimate say over any development plan that could affect them or the land on which they live.

“The peoples concerned,” ILO-169 reads, “shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development.”

Despite what Glamis Gold says on the matter, that consultation never took place. This is not, of course, the first time Guatemala’s highland Maya have been shut out of national dialogues. But this refusal by the government and by companies such as Glamis Gold to inform, consult and ultimately listen, breeds frustration. Without avenues to express their political voices, Guatemala’s campesinos take to the streets—they protest, they block highways. And on January 11 and on countless other days in the country’s tumultuous past, their mobilization has been met with heavy repression.

“Our concern is that democratic spaces, through dialogue, don’t exist in Guatemala,” says a wary Chacón. “In this very moment, every type of demonstration has been repressed brutally. Land seizures, by people trying to gain access to land in the country’s interior, have been repressed in a bloody way. There is incredible violence in the city. Just last year they reported more than 500 murders of women. Within this context of violence, generated by different factors, you get the issue of mining. This is what scares us, that this is going to generate another period of violence like the one we’ve only just gotten out of.”

About the Author
Benjamin Witte is a Vermont-based freelance writer. A former editor of the Santiago Times, he also worked as a reporter for the Tico Times.

Tags: Guatemala, Glamis gold, mining, multinationals, mining protests, indigenous

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