Guatemala to review all mining licences, including Bluestone’s just-granted permit

Just two weeks after Guatemala’s new President Bernardo Arévalo took office on Jan. 15, its Ministry of Energy and Mines says it will revise all decisions made in the recent past related to mining exploration, exploitation and export licences.

According to local media, the new head of the ministry, Víctor Hugo Ventura, announced the measure in response to multiple complaints regarding bribes, corruption and other illegal activities taking place within the country’s mining sector. 

Talking to journalists, Ventura noted that mining started in Guatemala 70 years ago and that all decisions that are made regarding the sector will balance out the social, economic, environmental and financial costs and benefits. 

To deal with bribery and corruption accusations, the minister requested the support of the Comptroller General of Accounts, as well as information from interested parties, including countries such as the U.S.

Ventura recalled that back in 2022, the U.S. applied sanctions to the export licences of Compañía Guatemalteca de Níquel (CGN), Compañía Procesadora de Níquel de Izabal (ProNiCo) and Mayaníquel, which are subsidiaries of the Swiss-based Solway Investment Group. These sanctions were lifted on the third week of January 2024 and Guatemalan authorities are asking for further information to re-authorize their operations.

The mines ministry’s approach is aimed at following the principles of transparency and zero tolerance for corruption that President Bernardo Arévalo is promoting.

Bluestone reversal?

At the same time, the Guatemalan Ministry of Environment and Natural Resources announced that it will review Bluestone Resources’ (TSXV: BSR) Cerro Blanco operation, whose environmental licence was granted in 2007 and updated on Jan. 9, 2024, giving the green light to open-pit mining of its gold deposit in the Asunción Mita municipality. 

The news sent its stock down 12.5% to 42¢ in morning trading on Monday. The company’s shares had previously doubled on news of the open pit approval less than two weeks ago.

Initially, the Vancouver-based miner had proposed an underground operation but decided to switch the mining method as a response to the results of advanced engineering and optimization work that revealed an opportunity to capitalize on the project’s near-surface, high-grade mineralization through open-pit mining. The assessment showed a doubling of the gold resource ounces and production profile.

A feasibility study for Cerro Blanco released in February 2022 outlined for an open-pit gold mine with average annual production of 197,000 oz. over 14 years. At peak production, the operation would produce 347,000 ounces of gold a year.

However, the fact that an open-pit operation would require the use of cyanide set off the alarms of nine environmental groups both in Guatemala and El Salvador, which expressed concern over the potential contamination of shared freshwater bodies such as the Güija lagoon and the Lempa River. The latter is the main water source for San Salvador, the Salvadoran capital.

In a recent meeting between the Salvadoran Foreign Affairs Minister, Alexandra Hill, and the Guatemalan ambassador to El Salvador, Rubén Estuardo Nájera, the former expressed her concern over the mine.

Yet, Bluestone has said that the mine’s development plans include a cyanide destruction process to neutralize it, which should ease such concerns. It also says it has local support for the project, despite the claims of environmental groups.