Consultation starts in Guatemala over future of Pan American Silver’s Escobal mine

Escobal silver mine in Guatemala. Image from Tahoe Resources.

The Xinka Parliament of Guatemala announced this week the start of a court-ordered consultation over the future of Pan American Silver’s (TSE, NYSE: PAAS) Escobal mine, according to a release from US environmental organization Earthworks.

Once the world’s third-largest silver mine, Escobal was acquired by Pan American through its $1 billion takeover of Tahoe Resources in 2018. A year prior, Tahoe was forced to halt operations at Escobal after Guatemala’s Supreme Court suspended the mine licence.

That decision supported a claim brought by environment and human rights group CALAS against the country’s Ministry of Energy and Mines (MEM), alleging it violated the local Indigenous people’s right of consultation in advance of granting the Escobal mining licence to Tahoe’s Guatemalan subsidiary.

A group of protesters that year near the town of Casillas blocked access to Escobal, delaying shipments and supplies.

The Constitutional Court’s ruling ordered MEM to carry out a consultation with the local Indigenous population, the Xinka communities, and it also upheld the licence suspension for Tahoe’s smaller Juan Bosco mine.

The underground operation, located in southeast Guatemala, about 3 km from San Rafael Las Flores, was in operations from 2014-2017. According to Pan American, it has 264 million oz. in proven and probable silver reserves and a 4,500 tonne-per-day plant throughput capability.

Escobal operations are on care and maintenance pending completion of an ILO 169 consultation. No timeline has been set for a completion of the consultation process or a restart of operations.