A protest that blocked access to the world’s third-largest silver mine ended this pastFriday (June 23).Tahoe Resources (TSX:THO,NYSE:TAHO) announced lastMonday (June 19) that protesters had begun blocking the primary access road to its Escobal mine in Guatemala, delaying shipments and supplies.
On Friday, the company reported that the Guatemalan government had taken legal action to disperse protesters. Police used tear gas to clear people off the road that connects Guatemala City to San Rafael Las Flores, near the mine. Tahoe said it was not aware of any serious injuries resulting from the action, and stressed that police intervention came after days of dialogue between protesters, government and the company.
As annunciated in Tahoe’s Human Rights Policy, we support freedom of association in the Guatemalan communities and are always open to dialogue about any concerns over the Escobal Mine, said Ron Clayton, president and CEO of Tahoe Resources.
The protesters are concerned that mining at Escobal is causing seismic activity in Casillas, which is located 16 kilometers from the mine. However, Tahoe said the Guatemalan agency responsible for studying seismic activity (INSIVUMEH) has confirmed that the seismic activity is naturally occurring and not caused by operations at the mine.
That does not appear to be the only concern the locals have with the Escobal mine. Last month, anti-mining organization CALAS filed a claim against Guatemala’s Ministry of Energy and Mines, alleging that the ministry violated the Xinco indigenous people’s rights of consultation before granting Tahoe’s Guatemalan subsidiary, Minera San Rafael, the mining license for Escobal.
In January, the BC Court of Appeal ruled that a lawsuit filed against Tahoe by seven Guatemalan men can proceed. The Vancouver-based company faces claims of battery and negligence related to an incident near Escobal in 2013. In March, Tahoe said it would appeal the ruling.
In 2016, production at the Escobal mine reached a record 21.2 million ounces of silver in concentrate. Tahoe has maintained since Monday that it has no reason to believe that its output this year will be impacted by the blockade.Our operations are performing well and we anticipate that our performance at mid-year will be well within expectations relative to our guidance, Clayton said. The company expects to produce 18 to 20 million ounces of silver in 2017.
Tahoe’s share price is down 8.54 percent year-to-date, but has risen 5.79 percent since the miner first released an update on the issue at Escobal on Monday.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.
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