Guatemela laws & regulations

Mining Law Revisions

There are 395 active mining licenses with 383 still pending issue as of March 2009; however, a suspension on the issuance of all types of mining licenses is presently in effect.

In 2006, the Guatemalan based advocacy group CALAS (Center for Legal, Environmental and Social Action) mounted a successful court challenge to the existing mining law, arguing that it provided insufficient protection for indigenous communities living in close proximity to mining operations.

In granting mining licenses without the full and free consultation of affected communities, CALAS argued that the government failed to abide by the terms of the ILO's Convention 169 on Indigenous and Tribal Peoples, which it ratified during the 1996 peace accords.

As a result of the ruling, President Colom instructed the Ministry to suspend the issuing of any further licenses.

According to information provided by the Canadian Trade Commission in Guatemala, only companies that had their licenses issued prior to June 2008 are presently active and legally able to engage in resource exploration and extraction-related activities.

The Guatemalan government is currently drafting a new mining law and awaiting revisions in Congress. The revisions aim to tighten regulations surrounding environmental protection and address issues such as royalties paid by foreign companies, regulations on mine closings, and the consultation process with affected communities.

New mining licenses will not be issued by Guatemala for the time being; however, companies wishing to secure title can still submit applications.

Under normal circumstances, exploration licenses usually take between 3 to 6 months for the Ministry to process, but it may be some time before the moratorium is lifted and any new licenses are issued.


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Guatemala Mining Laws

The Guatemalan Ministry of Mines and Energy has published an English translation of Guatemala mining laws and the regulations that pertain to the industry.

Included here are the Guatemala mining laws and regulations that govern the 3 types of mining activities that the Ministry oversees:

  1. Reconnaissance
  2. Exploration
  3. Exploitation

Also included are:

  • Respective licensing requirements
  • Various licenses' durations
  • Stipulations for renewals
  • Information on royalties, taxes and fees
  • Environmental mitigation study requirements

This Guatemala mining laws document does not apply to the oil and gas industry.

Royalties, taxes, duties and tariffs

Under the present mining law, mining companies are obliged to pay a 1% royalty of the national market or international stock exchange value. This money is split equally between the national and municipal levels. This is a considerable amount: in 2008, Goldcorp paid over US $20 million in taxes and royalties to the Guatemalan government. Many at the local level feel this amount is inadequate, however. Some rights groups argue that 1% is low by international standards; if Goldcorp’s Marlin mine were located in Canada, they argue, it would be expected to pay a 13% royalty. Such criticisms have caused the government to review the way that royalties are determined.

The importation of machinery, equipment, parts, accessories, materials and explosives used in a company’s mining operations are presently free from tariffs and duties.

Environmental laws

The International Comparative Legal Guide Series publishes a comprehensive online guide to environmental law in Guatemala. Its question and answer format covers environmental policy and its enforcement. References to all relevant articles are given. Topic areas include environmental permits, waste, liabilities, contaminated lands, powers of regulators and reporting/disclosure obligations.

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