Solway gets nod to reactivate Guatemala nickel mine

Guatemala authorized the reactivation of a nickel mine owned by Swiss company Solway Investment Group, after the US lifted sanctions on its local subsidiaries.

"The mining department… authorized [the] export credentials" for Procesadora de Níquel de Izabal (Pronico), department head Julio Luna said in a statement.

“With these credentials, Pronico can begin the necessary actions to start up its processing plant, acquire raw materials from its suppliers and thus be able to market the processed product,” Luna added.

Pronico and Compañía Guatemalteca de Níquel (CGN) suspended operations in March 2023, four months after Washington sanctioned them for corruption and influence peddling.

CGN operates the mine and Pronico processes and exports the mineral.

The US Office of Foreign Assets Control lifted the sanctions in January and Pronico was awaiting the renewal of its export permits.

“Ferronickel production is expected to restart within 8 to 10 months, [after] securing financing from international banks to begin maintenance of the processing plant and carry out the necessary work at the mine,” Pronico said in a statement. 

Marco Aceituno, who became Pronico president in 2023, said the export authorization is only the first step in the process to reactivate operations.

Although Pronico does not yet have a product, the license provides the necessary certainty to attract the investment required to reactivate the production process.

“Solway and Pronico have adopted new practices to combat bribery and corruption, as well as respect for human rights, under the supervision of international experts,” the company added.

Prensa Latina quoted Aceituno as saying that the processing plant needs an investment of more than US$80mn to restart operations, adding that over 1,300 workers will be hired in the next 10-12 months.

The mine is located in the municipalities of El Estor and Los Amates, on the Caribbean coast, the epicenter of clashes between police and indigenous people who oppose mining on environmental grounds.

In November 2021, then-president Alejandro Giammattei, whose term ended in January, declared a state of emergency in the area following a long protest by indigenous people who blocked the passage of mining trucks. A protest left one fisherman dead in 2017, AFP reported.

At the end of 2023, the Inter-American Court of Human Rights ruled that Guatemala violated the rights of a Q'eqchi' Mayan community by allowing the operation of the Fenix mine on their ancestral lands.

The latest decision in favor of Pronico brings some optimism to a sector that has been severely affected by social unrest, the lack of clear rules and bureaucratic and political obstacles of recent governments.