Article: Gold conflict continues

Gold project meets opposition in Guatemala

By Frank Jack Daniel

SIPACAPA, Guatemala, Feb 28 (Reuters) - A U.S. gold and silver miner's project is at the center of a conflict between the Maya Indians' traditional values and an impoverished country's need to attract foreign investment.

The future of Glamis Gold's half-built Marlin mine may provide some indication of whether Guatemala can become a mining nation while giving Mayan peasants a sense of autonomy, something they have lacked since the Spanish conquest.

Many of the Mayans see the mine in the civil war-scarred highlands as a symbol of foreign intervention and a threat to the environment and their agrarian way of life. But Glamis Vice President Steve Baumann says the project will create wealth in a neglected part of one of the hemisphere's poorest countries.

The Reno, Nevada-based company is looking to Marlin as a way to grow after a failed hostile takeover bid for Goldcorp Inc., a fellow midsize producer.

Glamis expects the mine to produce 217,000 ounces of gold and 3.33 million ounces of silver annually over 10 years -- if it can weather the criticism and protests directed against it.

"Over the life of the project, we will pay about $60 million in total taxes, including money that goes to the communities in the form of a royalty," said Baumann, watching local Maya Indians direct site-traffic below.

The $250 million project in the highland San Marcos province has encountered vehement opposition. Led by the Catholic Church, critics say Glamis is no different from gold-hungry Spanish conquistadors who invaded Guatemala more than 500 years ago.

Opponents say the mine will cause environmental and social damage and leave very little in return.

At an anti-mine march organized by the Catholic Church, thousands of Mayan villagers shouted the slogan, "Bread today, hunger tomorrow," protesting what they perceive as Glamis' short-term promises.

"It's another exploitation in an evolution that began 500 years ago, when the Spanish came to look for gold," said Roberto Magari, from the Catholic Church in Sipacapa.

San Marcos Bishop Alvaro Ramazzini, under government protection since authorities discovered a plot to kill him in the midst of anti-mine protests, called for the mine to share its profits with Guatemala.

The nation will charge Glamis 1 percent of the value of metals extracted from its soil, plus taxes, but that may not be enough for some farmers.

"We don't want gold; what we want is to defend our way of life and our water," said Timoteo Tujil during a moment in the cool, quiet courtyard of Sipacapa's colonial rectory, a gathering-place for local anti-mine activists.

The peasant farmer is worried that the mine will suck up or contaminate the region's sparse water supply, affecting his ability to make a living.

VIOLENCE

The villages scattered across jutting peaks and valleys in Guatemala's highlands are fertile ground for opposition to government initiatives.

In 1996, Guatemala emerged from a 36-year civil war fought mainly in these highlands as leftist insurgents tried to convince poor Indians to challenge army rule.

Brutal "scorched-earth" anti-insurgency tactics by the U.S.-backed army left about 200,000 dead or missing, mostly Mayans, according to a 1999 report by a Guatemalan truth commission supported by the United Nations.

Scars left by the war run deep, and mistrust of outsiders is so widespread that only recently have a few foreign companies considered investing in the region.

Construction began last year on Glamis' Marlin project, which soon attracted trouble.

Last month, tensions exploded and a villager was shot dead as police and soldiers helped escort equipment through road blockades set up by Mayan peasant highlanders.

Glamis Vice President Baumann and the government say the violence was the work of a few agitators dedicated to misinforming the population. Others see the conflict as a reaction to development projects imposed from above, with insufficient grass-roots support.

'TEMPORARY POSTPONEMENT'

Glamis appears to be working to counter the stereotype of foreign plunderer, paying for community school teachers, setting up a community trust fund and employing locals -- about 800 at the moment - to help run operations.

The company is also building new roads and putting in new power lines to some of the remote villages and hamlets that will supply labor for the mine.

The company's efforts have won the backing of the World Bank, which issued a $45 million loan to help develop the project, but have not convinced local activists.

"Why doesn't the World Bank spend $45 million on irrigation and education projects so people here can farm commercially?" asked Magari, adding that villagers were not properly consulted about the mine.

Guatemala Vice President Eduardo Stein said the government would honor its commitments to Glamis, even if it means using force to protect the mine and its workers.

However, no new extraction licenses will be issued for now, he said, and a commission is looking at ways to reform mining law and propose how best to consult indigenous communities.

"We might be facing a temporary postponement of the development of the mining industry in Guatemala that could last not months, but a few years," Stein said.

Posted by elcanche at February 28, 2005 05:49 PM