Guatemalan Xinka oppose Pan Am silver mine restart

A Xinka Indigenous delegation visiting Canada from Guatemala had a clear message for Escobal mine owner Pan American Silver (TSX, Nasdaq: PAAS): “No.”

Escobal, suspended since a 2017 Guatemalan Supreme Court directive, was developed by former owner Tahoe Resources into one of the world’s largest silver mines. It started production in 2014 with annual output peaking at 20 million ounces. But it occurred under a cloud of violence, state-backed repression, forced displacement and water contamination, the Xinka maintain.

“Even if they offered us 50% or 70% share in the operations, the answer is no, we don’t want any mining company in our territory,” Xinka delegate Marisol Guerra told The Northern Miner in an interview on Thursday in Vancouver where Pan American is based. “We simply want them to go away.”

The Xinka Parliament last month filed a statement with the government after a seven-year consultation on the mine about 40 km southeast of Guatemala City. The Central American country’s Ministry of Energy and Mines is to meet this month to discuss it. Guatemalan law uses the International Labour Organization’s Indigenous and Tribal Peoples Convention, known as ILO 169, for negotiations. 

Pan American has a market capitalization of about C$13 billion. It bought Tahoe in 2019 for $1.07 billion and says it will keep an “open, respectful, inclusive, and transparent dialogue” until consultations are completed and the court ruling is fulfilled. The company confirmed to the Miner that it has received the Xinka statement. CEO Michael Steinmann declined to comment further when reached by email on Monday.

Environmental concerns

Other Guatemalan mines have faced similar fates. Newmont’s (NYSE: NEM; TSX: NGT) Marlin gold mine in the western highlands stopped operations in 2017 after reports of protesters being shot, water contamination and rights violations. In eastern Guatemala, Switzerland-based Solway Investment Group’s Fénix nickel project was subject to a court injunction in 2021 concerning environmental damage and a former FBI director tried to clear its path back to production. 

President Bernardo Arévalo’s government took power in January 2024 after an anti-corruption and social justice campaign. He aims to balance economic development with environmental protection and the rights of Indigenous communities, but his Movimiento Semilla party has a minority of seats in Congress.

Escobal holds some of the world’s highest documented silver grades. As of last June, it hosts 2.5 million tonnes of proven reserves at 486 grams silver per tonne for 40 million oz., and 22.1 million probable tonnes grading 316 grams silver for 225 million ounces. The probable reserve also grades 0.34 gram gold for 243,800 oz. gold.

However, testing in May by Washington, D.C.-based environmental advocacy group Earthworks and the Institute for Policy Studies’ Global Economy Program, a progressive think tank, found rising arsenic levels in local water and damage to homes in nearby La Cuchilla village due to increased seismic activity. A 2016 assessment had already declared parts uninhabitable – what community leader Marisol Guerra calls “forced displacement.”

Protest camp

Describing the early days of Escobal moving into Xinka land, Guerra and colleague Marta Muñoz spoke about state-backed repression while it offered royalties and job programs to local towns. The Indigenous group, which numbers about 264,000 people across the region, began protesting against the mine in 2013. It’s operated a permanent camp in Casillas municipality 7 km west of the mine since June 2017, halting fuel convoys.

Government soldiers and tanks have fired tear gas into the camp made random arrests and enforced a “state of siege” in four towns, the group says. It alleges violence against community leaders such as the deaths of 16-year-old youth leader Topacio Reynoso in 2014 and Noé Gómez Barrera in 2023.

In April 2013, private security for Tahoe Resources shot at peaceful protesters seriously injuring six people. The victims later sued in a British Columbia civil court. In a 2019 settlement, Pan American took responsibility for the shooting and related human rights violations.

“This project arrived in our territory, violating our rights,” Muñoz said. “Over time, we have lived with more poverty, more human-rights violations and deeper social divisions.”