Guatemala Mines a Mother Lode of Trouble – by Mac Margolis (Bloomberg News – March 1, 2018)

A bitter fight over a silver mine points to the pitfalls of Latin America’s new resource nationalism.

Although it’s small and mostly poor, Guatemala sits on a heap of treasure. Last year, it ranked as the world’s 15th-largest producer of silver, a nest egg that could yield economic growth and taxes and royalties, helping to hoist millions from misery.

So why is the Escobal silver mine, one of the world’s largest, idle? In 2014, when the Canadian-owned Tahoe Resources Inc. started production, corporate touts projected a two-decade bonanza. Now they’re facing a shuttered mine, protesters, and a lode of legal troubles.

To hear tell from the mine’s backers, including U.S. legislators in a letter to President Jimmy Morales and Guatemalan industrialists, Escobal is the victim of choleric political activists, and even “criminal groups,” as one company official told me, who are using the courts as a fig leaf to thwart foreign investors.

Led by the militant indigenous rights group CALAS, opponents claimed that the government failed to consult them before Tahoe subsidiary Minera San Rafael S.A. broke ground in San Rafael Las Flores, near Guatemala City. They demanded the top court force the company to stop operations.

The issue ricocheted from bench to bench until last July, when the Constitutional Court suspended the mine’s operating license. The conflict is far from over, but it’s a glimpse into a shifting moment in Latin American democracy: Increasingly, newly empowered civil society groups are raising the flag of resource nationalism to press their claims for a greater say in the national conversation and a larger share of wealth.

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