Tahoe Resources has terminated 250 Minera San Rafael employees at its Escobal mine in Guatemala due to the company being unable to resume mining following its mining license suspension on July 5. The Guatemalan Constitutional Court heard appeals of the Supreme Court’s decision to reinstate the Escobal mining license on October 25. According to Guatemalan law, the Constitutional Court must rule within five days of the public hearing. However, as of today, the Constitutional Court has yet to rule.
Should the Constitutional Court rule in the next several weeks to uphold the lower court’s reinstatement of the Escobal license, further workforce reductions may be avoided, the company said. Despite this difficult decision, Tahoe said it remains optimistic that based on legal precedent, the Constitutional Court will issue a favorable ruling reinstating the mining license and Escobal will resume production. At such time, Tahoe will seek to restore its workforce.
Prior to the license suspension, Minera San Rafael employed 1,030 people, 97% of whom are Guatemalan and 50% of whom are from the Santa Rosa region.
“Despite extensive efforts in Guatemala, we have been unsuccessful in reaching a favorable resolution that would avoid negative impacts for all stakeholders, especially for our workforce and the local economy,” said Ron Clayton, president and CEO of Tahoe Resources. “We are hopeful that the Constitutional Court will honor their own legal procedures and precedents and urge them to provide a fair and transparent ruling quickly that demonstrates Guatemala remains open for responsible foreign investment.”
Tahoe Resources said it is eager to resume operations at Escobal to return benefit to employees, communities, and the region. For every month of delay in operations at Escobal, approximately $4 million in taxes and royalties are not being paid to the government of Guatemala and the local communities, it added.