Tahoe wants to put the record straight on Guatemala mine

Tahoe Resources (TSE: THO, NYSE: TAHO) on Friday issued a special blog post regarding its Escobal project in Guatamala, which faces opposition from non-governmental organizations active in the central American nation.

The Escobal project is a high-grade silver deposit discovered in 2007 located in Southeast Guatemala roughly 70km for the country's capital and is one of the biggest foreign investments in the impoverished nation.

The mine, which was awarded an operating licence in April, is expected to produce 20 million ounces a year when it goes into full operation next year, but the project has been plagued by violence and unrest.

The Reno Nevada-based company, listed on the Toronto and NYSE stock exchanges where it is worth some $2.6 billion, issued this statement on its corporate social responsibility website:

Dispelling Myths About Tahoe’s Escobal Project

The Escobal project has been the subject of some protest among activist groups in Guatemala. It has come to our attention that there is a lot of misinformation in the public record, and this article is intended to help clarify the information and set the record straight.

MYTH: A Guatemalan court of appeals has suspended the operating license for Tahoe Resources’ Escobal project.

TRUTH: The Escobal project’s operating license has not been, and never was, suspended. On April 3, 2013, Tahoe Resources received its final permit for the Escobal project, an exploitation license, from the Guatemalan Ministry of Energy and Mines. In late July 2013, a group of people who oppose the project challenged this license and several news outlets, acting on a false tweet, stated Tahoe’s mining license had been suspended. It never was. A ruling was made by the Civil and Mercantile Division of Guatemala’s First Court of Appeals, stating “the mines ministry director should have conducted hearings on some of oppositions that were filed many months ago against the issuance of the exploitation license.” Tahoe’s subsidiary company, Minera San Rafael, and the Ministry of Energy and Mines filed appeals less than two days later and the case was taken under submission. The lower court’s ruling refers only to the lack of a hearing. It does not challenge the validity of the exploitation license.

MYTH: Escobal will drain and contaminate the local water supply.

TRUTH: Tahoe Resources undertook extensive environmental and technical evaluations of the Escobal project to ensure it will not harm the environment, including local groundwater. The project’s fresh water comes from a very large and deep aquifer that is unused by local wells. Both the mine and the processing facility have been designed to recycle a majority of the process water, thus minimizing the amount of fresh water needed. In addition, the Escobal property has its own water treatment facilities and the design assures that any water discharged will be cleaner than the water currently flowing in the natural waterways. Throughout the life of the mine, Tahoe will maintain rigorous testing and control of any water leaving the mine site and will ensure it meets or exceeds Guatemalan and North America discharge standards.

MYTH: Tahoe Resources’ mining license was attained fraudulently.

TRUTH: The process to obtain a mining license in Guatemala is driven by the Guatemalan government and mining law. It is a lengthy, multi-stage process that provides for the thorough and integrated assessment of potential environmental, economic, social, heritage and health effects that may occur during a project’s life cycle. It also provides for meaningful public participation.

Tahoe Resources willingly submitted to the regulatory process and obtained every permit for the Escobal project in a lawful manner. In the first quarter of 2012, the Guatemalan government notified Tahoe that all legal requirements for approval of the exploitation license had been met and assured the company that the license was forthcoming. Tahoe received its exploitation license for the Escobal project from the Guatemala Ministry of Energy and Mines on April 3, 2013.

MYTH: The Escobal project does not have any community support/social license. Tahoe Resources does not consult with local community members and continues to operate in spite of requests by the community to cease operations.

TRUTH: There are many Guatemalans, including the majority of those in the San Rafael las Flores community, who support the Escobal project. On July 28, 2012, several municipal councils in the local area held a press conference to denounce activities of certain opponents and make clear their support for the Escobal project. Like many industrial projects around the world, the Escobal project is opposed by a small group of opponents who refuse to engage in meaningful discussions about the project. Local Guatemalan authorities have identified some members of the opposition to be from outside the local area, transported in and organized and funded by local and international NGOs. Some of these outsiders have resorted to violence and intimidation tactics against Tahoe Resource’s employees, contractors and local supporters.

The fact remains that Tahoe has exceeded legal requirements and demonstrated best international practices for engaging in dialogue with the community. The company has hosted hundreds of meetings with government officials and individual community members, providing project information and answering questions of supporters and opponents. In addition, hundreds of community members and government officials have taken site tours to become more familiar with the mine. Tahoe continues to seek meaningful and effective dialogue with community members.

MYTH: Tahoe Resources does not respect human rights. The Escobal project’s private security uses lethal and aggressive force against protestors and the company uses intimidation tactics to silence vocal opposition to the mine and is actively trying to destabilize the project area.

TRUTH: Tahoe Resources conducts its business to the highest ethical standards. The company has committed itself to uphold numerous human rights protocols including John Ruggie’s Business and Human Rights Framework and the Voluntary Principles on Security and Human Rights.
Security at the Escobal project use only defensive methods to protect the health, safety and welfare of employees, something Tahoe takes very seriously. On April 27, 2013, contract security employed non-lethal rubber bullets and tear gas to disperse opponents carrying sticks and machetes who were blocking the mine gate. At no time has the company ever used lethal force or intimidation.

Anti-development activity sometimes results in a highly-charged atmosphere in Guatemala. Tahoe fully supports the Guatemalan president’s mandate for strengthening the rule of law and strongly condemns any violent or unlawful actions directed against its law-abiding employees and workers. At the same time, Tahoe is always willing to engage with peaceful protestors and any law-abiding citizen or group with concerns about the mine.

MYTH: The mine will not contribute to the overall wealth of Guatemala and will take all profits out of the country.

TRUTH: The Escobal project already does, and will continue to, contribute to the economic prosperity of Guatemala. Right now, mining contributes 1.89% to the country’s GDP. When the Escobal project is operating, it will add an additional 2% to the GDP, more than doubling mining’s current contribution. It is estimated that the Escobal project will be the largest taxpayer in Guatemala when fully operational.

With respects to project revenues, 42 percent will remain in Guatemala for taxes, royalties and voluntary contributions alone. This represents a contribution of more than $50 million every year. Money paid by Tahoe Resources is already being used to help pay for clean water, education, infrastructure, nutrition and health in Guatemala.

Tahoe also purchases a significant amount of Guatemalan goods and services. During exploration and construction, the Company spent approximately $70 million with local suppliers and vendors and will spend approximately $26 million in Guatemala annually during operation.

Currently, the Escobal project employs more than 700 people, 96 percent of whom are Guatemalan. During operation, employment is expected to be more than 800. Tahoe will spend an average of $17.1 million in Guatemalan wages and salaries annually.

It is clear from the figures presented that Tahoe significantly contributes to prosperity in Guatemala.

Click here to read at www.tahoecsr.com