60-year nightmare of Fenix Mine to continue

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September 4, 2024
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Solway Investment Group (Switzerland) & Fenix Nickel Company (USA) to re-open Fenix Mine in Guatemala
[link removed]

60-year Nightmare of Fenix Mine in El Estor to continue
* 1964-2004: INCO (Canadian owner) and EXMIBAL (subsidiary in Guatemala)
* 2004-2008: Skye Resources (Canadian, incorporated by former INCO directors) and CGN (new name of EXMIBAL)
* 2008-2011: Hudbay Minerals (Canadian, bought mine from Skye Resources) and CGN
* 2011-2022: Solway Investment Group (Swiss, with Russian investors) and CGN / PRONICO
* 2024: Solway Investment Group (Swiss) / Fenix Nickel (USA) and CGN / PRONICO

It appears that the 60-year nightmare of the Fenix Mine in El Estor will continue with Solway Investment Group (Swiss) and Fenix Nickel Company (USA), without ever having paid reparations for the multiple violences, evictions, human rights violations and damages of the last 60 years, without ever having carried out a community consultation according to the law with the Maya Q'eqchi' peoples of the area impacted and damaged by the mining operations for 60 years.

How did the U.S. get effective control over the mineral resources produced at the Fenix Mine?
Based on a variety of sources, Grahame Russell wrote in May 2024 ([link removed]) :

“[T]he US took advantage of the Russian invasion of the Ukraine in 2022 to force the suspension of the Fenix mine, using the excuse that Russians with interests in Solway engaged in acts of corruption in Guatemala. After over a year of backroom discussions and lobbying by top-end Washington DC insiders, such as Lanny Davis & Assocs., the blacklisted Russians were removed from the company and the sanctions were lifted in early 2024. As part of the deal to lift sanctions, Solway incorporated the US-based Fenix Mining Company that becomes the new owner of the Fenix mining operation in Guatemala. It is speculated that as part of the deal, Solway agreed to sell all or a significant amount of the nickel and other minerals to US markets.”

“In April 2023, Newsweek Magazine reported that the reason the US imposed sanctions on Solway was that “amid increasingly intense competition with China over strategic resources such as nickel, which is key to technologies including electric cars”, the US wanted access to the extensive nickel and other mineral resources found in the Q’eqchi’ territories of eastern Guatemala.”

“So it goes in the sacrifice zones of the Q’eqchi’ territories of eastern Guatemala. While rich, powerful governments and global mining companies make deals and flip companies back and forth to maximize their own political and economic interests, the Q’eqchi’ people – “illegal squatters in the way of development” – have no say in the matter and get steamrolled decade after decade.”

Financial support needed
Since 2004, Rights Action has funded and supported Maya Q’eqchi’ land, environment, human rights and justice defenders in El Estor, including the on-going landmark Hudbay Minerals lawsuits first filed in Canada in 2010 that are seeking a small measure of justice and reparations for some of the mining-linked violences, evictions and human rights violations of the past 60 years. (See information below)
* Clarification: The Prensa Comunitaria article below refers to Solway as a “Russian-Swiss” company. Solway Investment Group is headquartered in Switzerland. Solway recently incorporated the Fenix Nickel Company in New York, USA. Fenix Nickel Company (USA) is the owner of Compania Guatemalteca de Niquel (CGN) and Compania Procesadora de Niquel de Izabal, S.A. (PRONICO).

Grahame Russell
[email protected] (mailto:[email protected])

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Swiss mining company receives new ferronickel export certification in Guatemala
By Nelson Rivera, September 2, 2024, Prensa Comunitaria
(Translation by Rights Action)
[link removed]

Although the Ministry of Energy and Mines (MEM) did not officially make public the announcement of the certification given to the company, the news spread in El Estor related to the mining company that announced that PRONICO obtained the export certification this year from the government of President Bernardo Arévalo.

PRONICO and Compañía Guatemalteca de Níquel (CGN) are subsidiaries of the Russian-Swiss transnational Solway Investment Group, both of which operate open-pit nickel mining in the departments of Alta Verapaz and Izabal in the Guatemalan Caribbean region, and were sanctioned for corruption in 2022 by the United States.
* See clarification above: Fenix Nickel Company (USA) is the owner of PRONICO and CGN.

Fenix Mine nickel processing plant, El Estor, Izabal. Photo Forbidden Stories (France)

The news caused concern among the community and ancestral authorities of the Maya Q'eqchi people (Xyuwa' ch'och' ut xna' ch'och') in this region of the country. One of these groups spoke out in rejection of the new certification.

“...we express our concern about the interests of the mining companies to continue affecting our community harmony by expediting applications for more mining exploration and exploitation licenses... We demand that the Ministry of Energy and Mines (MEM) and the State cancel these permits...”.

The news also generated concern among local fishermen who claim that days before the certification was confirmed they observed the movement of a significant number of gondolas - massive cargo trucks - along the road from Rio Dulce to El Estor and on towards Panzós.

A villager in El Estor, who asked not to be named, stated that two weeks ago they felt a tremor and the noise generated when the processing plant, located 5 kilometers from the town center of El Estor, is operating. “It was a sign that the mining company would be restarting operations,” said the community member.

PRONICO announced receipt of this certification on August 27. This certification comes only seven months after the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department lifted sanctions against the three companies: CGN, PRONICO and Mayaníquel.

The same day of the lifting of the sanctions last January, OFAC sanctioned the former Minister of Energy and Mines (of the government of then President Alejandro Giammattei), Alberto Pimentel Mata, and Oscar Rafael Pérez Ramírez, his Vice Minister of Sustainable Development, both accused of corruption and bribery in the extractive sector, a sanction that also extends to Luis Miguel Martínez Morales, former head of the Government Center.

MEM's version
Prensa Comunitaria asked the MEM mining director whether the MEM granted certification to PRONICO and what steps the company must follow in order to resume mining operations, to which Luna replied:

“The Ministry of Energy and Mines grants exploitation licenses and also export credentials. PRONICO was granted export credentials. This is a company dedicated to mineral processing. What they were given were export credentials that are valid for one year. That is, every year they have to apply for this export credential. They had credentials until 2022, but in 2023 and 2024 they had not been extended.”

“Additionally I want to mention that they already export processed minerals but they indicate that due to maintenance and operational issues, they will not be able to renew exports for a few months.”

Exports and sanctions in 2022
On November 18, 2022, the two companies owned by Solway, CGN and PRONICO, were sanctioned by the United States through the Magnitsky Act, so their assets and capital in that country were frozen. As of January 2023, Solway suspended labor relations with its workers in Guatemala. In a communiqué dated February 28, 2023, Solway announced that 500 workers accepted the voluntary suspension, and also informed of the temporary suspension of operations, which included CGN and PRONICO.

The Observatorio de Industrias Extractivas (OIE) confirmed that during 2022 Solway exported 295,207 tons of nickel ore, yet reported royalties to the State of Guatemala of Q124,372.42, equivalent to some US$16,152.

Community consultation carried out arbitrarily, violating rights of Q'eqchi people
In April 2022, the Constitutional Court annulled the community consultation carried out by the MEM related to the Fénix Mine, given that the MEM carried out the process in an arbitrary manner in violation of the rights of the Q'eqchi people.

That same year OIE discovered that Solway was selling its ferronickel below the market price per metric ton, according to the London Metal Exchange (LME), which registered the real value at US$25,834 per metric ton. The company was selling it at US$14,079 per metric ton. In other words, Solway registered sales of US$4,156,219,353, when the real price on the market was equivalent to US$7,626,377,638. OIE affirms that this type of sale allowed the company to pay less royalties to the State.

State must re-do community consultation process, according to decision of Inter-American Court of Human Rights (IACHR)
According to lawyer Rafael Maldonado, who has supported legal processes of the Gremial de Pescadores Artesanales and Q'eqchi people of El Estor, the Guatemalan State has pending legal issues to resolve. Regarding what was ordered by the Constitutional Court in April 2022, he affirms that judges of the Supreme Court of Justice decided not to review what was ordered by the highest court in constitutional matters. That is to say, the Supreme Court chose not to review the Fenix Mine consultation, despite the anomalies and violations of rights during the process.

Yet the State is obligated to repeat the community consultation process in a free, prior and informed manner according to the 2023 decision of the Inter-American Court of Human Rights issued in the case of Agua Caliente Lote 9 versus State of Guatemala.

In its decision, the IACHR recognized the seriousness of the violations of the rights of the Q'eqchi people to proper community consultation process and that what was done by the State was done in a discriminatory manner. Thus, the IACHR ordered the State to carry out a legal community consultation. (See here ([link removed]) sentence of Inter-American Court of Human Rights).

Rodrigo Tot, president of Agua Caliente Lote 9 land committee. Photo Goldman Environmental Prize

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Urgent call for suspension of Fenix Mine operations and reparations for long-suffering Maya Q’qchi’ people in El Estor, Guatemala

Rights Action supports this call of the Maya Q’eqchi’ people of El Estor, Guatemala ([link removed]) for:
* Suspension: Immediate suspension of the Fenix mining operations in Q'eqchi' region of El Estor and Panzos.
* Investigatory commission: Formation of a commission to investigate violences and harms of mining between 2004-2024.
* Reparations: Preparation of a compensation plan for people and communities that suffered the violences and harms.
* Consultation process: Then, the implementation of a consultation process, based on prior and complete information, in the ancestral Mayan language Q'eqchi', to decide if mining operations might continue in the future.

Rights Action calls on organizations and people - particularly in Canada, Switzerland and the US, home to the mining companies – to use this information to initiate, or continue with your education and activism work to pressure your governments and your companies to comply with these demands of the Maya Q’eqchi’ people.

Of all the community defense, mining resistance struggles Rights Action has supported in Guatemala since 2004 (documented in TESTIMONIO-Mining in the Aftermath of Genocides in Guatemala ([link removed]) , published by Between The Lines in 2021), the land, rights and environmental defense struggle of the Q’eqchi’ people has arguably been the most violent and harmful, going back to the 1960s when the Fenix Mine was first established by Canadian mining giant INCO (and its EXMIBAL subsidiary) in the aftermath of the U.S.-orchestrated coup in 1954 that ousted Guatemala’s democratic government of President Arbenz.

INCO/EXMIBAL initiated mining operations at the Fenix Mine in the 1970s, in direct partnership with the U.S.-backed genocidal regimes of Generals Lucas Garcia and Rios Montt.

More information
* Prensa Comunitaria: @PrensaComunitaria, [link removed]
* Decisión de Corte de Constitucionalidad, suspendiendo operación minera de Solway: Abogado Rafael Maldonado: [email protected] (mailto:[email protected]) , [link removed]
* Periodista Carlos Ernesto Choc: [email protected] (mailto:[email protected]) , [link removed], [link removed], #PeriodismoComunitarioMaya

Rights Action archives: [link removed]

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