Guatemala Said Goldcorp Must Suspend Operations at Marlin Mine Amid Probe

Goldcorp Inc., the second-largest gold producer by market value, must temporarily shut its Marlin mine in Guatemala during a probe into alleged environmental damage and human-rights abuses, a government official said.

“They have to suspend operations,” Fernando Barillas, an adviser to Guatemalan President Alvaro Colom, said today in a telephone interview. “It’s a resolution that has to be obeyed. But there’s no exact date yet. Perhaps within 15 days or a month. We have to give them time so they can close.”

The Inter-American Commission on Human Rights, an arm of the Organization of American States, asked Guatemala last month to close Marlin ahead of an investigation into human-rights and pollution complaints by nongovernmental organizations and local community groups. The mine, located in western Guatemala, produced 274,900 ounces of gold last year, or 11 percent of Goldcorp’s output.

The Vancouver-based company has denied the allegations and said today in a statement it expects to continue “normal operations” at the mine while Guatemala moves to address the concerns of the human-rights commission.

“We have been assured that we will have a full opportunity to present the compelling data that prove there have been no adverse environmental or health impacts from the mine,” Goldcorp Chief Executive Officer Chuck Jeannes said in the statement. “We continue to believe there is no basis for suspending operations at the mine.”

Delegation Visit

A delegation from the human-rights commission will likely visit the mine in July, Goldcorp said today, citing a statement yesterday from the Guatemalan government.

Jeff Wilhoit, a Goldcorp spokesman, referred Bloomberg News to the company statement.

“Guatemala is not going to close one of the country’s most important industries because of accusations that are probably based on anecdotal and non-scientific evidence,” said Patrick Chidley, a Stamford, Connecticut-based mining analyst at Barnard Jacobs Mellet USA LLC. “It’s like closing down a restaurant just because someone doesn’t like the food.”

Goldcorp fell 32 cents to C$46.09 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have risen 11 percent this year.

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. Goldcorp acquired Marlin when it paid $7.6 billion for Canada’s Glamis Gold Ltd. in 2006.

Human Rights

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.

Barrick Gold Corp., based in Toronto, is the world’s largest gold producer.

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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