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Guatemala Says No Evidence of Pollution Found at Goldcorp's Marlin Mine

Guatemala’s vice president said government studies haven’t found evidence to substantiate alleged environmental damage and human-rights violations at Goldcorp Inc.’s Marlin mine.

Further investigation is needed and the government is seeking funding for a two-year probe by U.S. researchers, Rafael Espada said in Washington.

“We will not allow any damage to our people, but at the same time, we have to respect industry and investments,” Espada said. “We want to give investors proof, and show evidence if there’s contamination.”

Marlin is among mines in Guatemala established without full consultation of indigenous Maya residents, said Rural Unity Committee, a rights group. The Maya allege Marlin put metals in water supplies, damaging the health of local people, according to a University of Michigan study. The Inter-American Commission on Human Rights, an arm of the Organization of American States, has given Guatemala until June 24 to close Vancouver-based Goldcorp’s mine while the claims are investigated.

The IACHR’s demand is “based on environmental allegations that are entirely without merit,” Goldcorp said in a June 9 statement. Company spokesman Jeff Wilhoit declined to comment further.

Guatemala won’t suspend Marlin unless the OAS orders it to, Espada said in the June 14 telephone interview. IACHR representatives have been invited to the country to clarify their position, he said.

“Depending on what the conclusion is, then we will respect whatever the OAS says,” he said.

Goldcorp Shares

Goldcorp rose C$1.01 or 2.2 percent, to C$46.15 at 4:15 p.m. in Toronto Stock Exchange trading.

Goldcorp has spent $12.6 billion on six acquisitions in the past 10 years to create the world’s second-largest gold producer ranked by market capitalization. Its shares have advanced 12 percent this year in Toronto, valuing the company at C$33.9 billion ($33 billion). Toronto-based Barrick Gold Corp., the world’s biggest gold producer, rose 4 percent to C$46.10. Gold for immediate delivery in London traded at a record $1,252.11 an ounce on June 8.

Goldcorp acquired Marlin when it paid $7.6 billion for Canada’s Glamis Gold Ltd. in 2006. The mine, located in western Guatemala, produced 274,900 ounces of gold last year, or 11 percent of Goldcorp’s total output.

Independent Assessment

In 2008, the company agreed to an independent assessment of the mine’s impact on human rights, the first such report commissioned by a resource company to be released to the public, according to Robert Walker, vice president of sustainability for Northwest & Ethical Investments LP in Toronto. The report was published last month and recommended the company halt exploration and expansion at Marlin until consultations are held with local communities.

The Goldcorp unit that owns and operates Marlin “has mainly been in a reactive and defensive mode” when dealing with complaints that affect human rights, the report said. The unit’s “reliance on national legal frameworks has not provided an adequate foundation upon which to respect human rights, particularly in the areas of indigenous peoples rights.”

The United Nations said its Special Envoy James Anaya arrived in Guatemala on June 14 to analyze allegations that indigenous Maya weren’t consulted before the mine started operations.

Toxic Metals

University of Michigan researchers found “elevated” levels of toxic metals in rivers near the mine and among indigenous local residents. Their study, which was released last month, called for the creation of a panel to oversee a more “rigorous” investigation.

Studies by the health, environment and energy ministries found no contamination, Espada said. The work by U.S. scientists and Guatemalan authorities is “very preliminary,” he said.

Still, Guatemala’s Ministry of Environment and Natural Resources recommended in a May 27 memo that the IACHR’s request for the mine’s suspension should be obeyed, and it called on prosecutors to take legal action.

Should Guatemala fail to comply with the IACHR’s demands, the commission may ask an affiliated organization, the San Jose, Costa Rica-based Inter-American Court of Human Rights, to order the temporary closure of Marlin, IACHR spokeswoman Maria-Isabel Rivero said in a June 14 interview from Washington.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@bloomberg.net; Christopher Donville in Vancouver at cjdonville@bloomberg.net

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