Nickel for Your Life: Q'eqchi' Communities Take On Mining Companies in Guatemala


Susan Fitzpatrick Behrens –

Date of publication: 
25 October 2009

On Sunday, September 27, a violent conflict broke out in El Estor, a municipality near Guatemala’s Pacific coast, between members of a Q’eqchi’ community called Las Nubes and private security guards of the Guatemala Nickel Company (CGN), a subsidiary of the Canadian mining company Hudbay Resources. Community members report that CGN’s security forces kidnapped and killed Adolfo Ich Xaman, a local teacher and community leader, and gravely injured eight others.

Hudbay/CGN attributes Sunday’s violence to “organized” sectors within the community and asserts that “CGN Personnel showed great restraint and acted only in self defense.” The conflict arose in the context of company demands for the resettlement of Q’eqchi’ community members of Las Nubes, part of a more expansive process of expulsions CGN has carried out since 2005. Hudbay/CGN claims a legal right to the land occupied by the Q’eqchi’ communities based on concessions inherited from its corporate predecessors, EXMIBAL, INCO and Skye Resources. The company identifies the Q’eqchi’ people as “invaders.”

At about 11, the Sunday morning of the conflict, the governor of the department of Izabal came to the community center of Las Nubes accompanied by some 50 private security guards of CGN. Neither the governor nor the CGN forces had an expulsion order, but for the next four hours a “discussion” ensued, with the company calling for a “legal” resettlement. At some point, at around three in the afternoon, the guards opened fire on the community members resulting in the wounding of eight people. Adolfo Ich Xaman, say community members, was not killed at that moment, but had been kidnapped and deliberately murdered by the guards.

Representatives of Las Nubes and some 20 other Q’eqchi’ communities protesting the presence of CGN and the forced expulsions are demanding an immediate cessation of violent repression, an investigation into the killing and assaults of September 27, and a withdrawal of CGN from El Estor. They claim an ancestral and contemporary legal right to the land. The company, they say, is the invader. They assert that the Guatemalan constitution mandates respect for indigenous people’s interests, requires consultation prior to granting mining concessions, and demands protection of national land.

The recent violence in El Estor highlights the economic, political, and quasi-military forces against which impoverished Mayas in Guatemala are fighting to retain tenuous control over their land, and with it, the right to subsistence and to cultural autonomy in the face of the expansion of mining, hydroelectric dams, and export crops.

In 1996, peace accords in Guatemala ended a 36-year civil war and, as two indigenous-rights activists remarked to me in a recent interview, “made the country safe for investment.” The contemporary operations of Hudbay/CGN, they told me, are a direct product of the years of military repression and of the subsequent “peace.”

Hudbay/CGN’s corporate ancestry can be traced back to 1960, when a Canadian mining company, INCO, joined forces with the U.S. Hanna Mining Company to form EXMIBAL. In 1962, EXMIBAL filed for its first mining concession in Guatemala and began forcefully lobbying the military government for favorable conditions. In 1965, the company’s efforts were rewarded with a new mining law favorable to private investors, and a 365 square kilometer mining concession in the area of El Estor. (A good recounting of this story and a general history of resource exploitation in Guatemala is in Luis Solano, Guatemala: Petroleo y mineria en las entranas del poder, Inforpress Centroamericana, 2005.)

Solano documents the way in which, to minimize its tax obligations, EXMIBAL hired the Institute of Investigation and Industrial Technology (ICAITI), a company receiving funding from USAID for a geological study of exploitable mineral deposits in Central America, to push the Guatemalan government to declare it a tax-exempt “industry of transformation.” The classification was granted in 1968, even though the country’s weak civilian government initially opposed it. As a result, EXMIBAL paid royalties of a mere US$23,000 a year for the right to exploit El Estor’s nickel deposits and to expel Q’eqchi agricultural communities.

When EXMIBAL sought to negotiate a new contract with even more favorable terms, it faced massive opposition. At a local level, Q’eqchi communities vigorously protested expulsion from their ancestral lands. At a national level, groups within civil society – with unions and faculty of the University of San Carlos (USAC) in the vanguard – developed an organized opposition. Popular protest against the 1965 concession became so intense that EXMIBAL, in an effort to quell the public outcry, launched a costly and extensive public relations campaign. In 1969, USAC faculty formed a commission to analyze the terms of the concession and to demand an alternative. The commission, which presented a detailed study and recommendations, was (literally) short-lived.

In November 1970, Julio Carney Herrerra, a lawyer and member of the commission, was assassinated. In the same month, Alfonso Bauer Paiz, another commission member and law professor, was shot but survived. In January 1971, Adolfo Mijangos, a third commission member, confined to a wheel chair, was also assassinated. A month later, in February 1971, EXMIBAL came to an agreement with the government. The terms, not surprisingly, favored the company. In 1980, after three years of exporting nickel, EXMIBAL reported more than US$10 million in profits, but as researcher Solano documents, the Guatemalan government did not receive a cent. EXMIBAL hid profits by establishing a shell company and shifting resources to cover “expenses.”

These conditions made EXMIBAL a standard target of the leftist Guatemalan Guerrilla Army of the Poor (EGP) and of the Guatemalan Workers Party (PGT). But, as Solano reports, even the military government of Romeo Lucas Garcia began to demand reforms. In 1980, Lucas Garcia presented a new contract to EXMIBAL requiring that 5% of the value of nickel extracted be remitted to the country. In response, EXMIBAL suspended operations.

With the government refusing concessions, the EGP continuing attacks, and global nickel prices falling, EXMIBAL left Guatemala, but it retained its mining concession. During its years of operation, EXMIBAL had massively displaced Q’eqchi’ communities, paid virtually no taxes, gained contracts resulting from the violent repression and assassination of local and national leaders, and devastated natural resources. But the company retained the right to “sell” its mining concession to the highest bidder after the military “pacified” the country by massacring some 200,000 people, most of them Maya.

In 1994, EXMIBAL returned, proposing to pay the cost of building two hydroelectric dams to generate low-cost electricity in the neighboring department of Alta Verapaz. In 1996, the year of the peace accords, the Ministry of Energy and Mines announced that it would “grant all facilities for the reopening of the company EXMIBAL.” In 1997, new mining legislation reduced the royalties mining companies paid to the government for the privilege of exploitation from 6% of the value of net production to 1%. In 2009, Yuri Melini of the Center for Social and Environmental Legal Action (CALAS), who survived a still unresolved assassination attempt that has left him severely handicapped, working with members of civil society, found that seven of the articles of the new mining law partially violate Guatemala’s constitution.

In 2003, the former director of INCO, which held 80% of EXMIBAL’s shares, became president and chief executive of the Canadian Mining Company, Skye Resources. In 2004, just days before EXMIBAL’s 40-year concession expired, the company announced the sale of 70% of INCO to Skye Resources, which, in turn, received a new three year exploration license with an option to renew.

Skye Resources, which later merged with Hudbay Resources, paid $636,000 to Guatemala’s minister of finances and $127,000 to the municipality of El Estor. These fees, said to cover the royalties that EXMIBAL failed to pay between 1978 and 1980, allowed the company to take control of what Guatemala’s El Periodico describes as among the ten largest nickel reserves in the world. The company forecasts that its mining investments, called the “Fenix Project,” will produce 50 million pounds of nickel a year with an export value of between $200 million and $300 million for 2010. In theory, it will provide $54 million a year in taxes to the Guatemalan government, which originally held a stake of 30% in CGN – a stake that has been reduced to less than 2%.

The concession also granted the company the “right” to expel Q’eqchi’ communities, whose land was effectively sold out from under them. This is a “right” the company has begun to exercise vigorously.

In 2005, nearly a thousand Q’eqchi’ Mayan women and men marched through El Estor to the headquarters of CGN, protesting the government’s granting the company an exploration concession without consulting their communities. Representatives of the communities also sent a letter to the president of Guatemala, the minister of Energy and Mines, and Skye Resources. The letter condemned the failure to consult Q’eqchi’ communities, denounced pressure by Skye Resource’s Guatemalan subsidiary, CGN, on communities to leave their land, and criticized the massive deforestation and environmental degradation caused by mining exploration. The protesters demanded a suspension of the mining license and reparations for the damages done and condemned the company for “entrapping, dividing, and intimidating our communities.”

In the four years since the Maya Q’eqchi’s initial protest, CGN has put more pressure on Maya Q’eqchi subsistence farmers by expelling communities, promoting divisions, and threatening opposition. Representatives of the Committee for Campesino Unity (CUC) and of Q’eqchi’ activists in El Estor recount that neither government officials nor representatives of CGN appeared at a meeting to discuss the mine and relocation just months prior to the recent outbreak of violence. Instead, community members assert that CGN used the presence of some 100 community leaders, who overwhelmingly rejected the mine, as an opportunity to gather their names, photograph, and film them. This information, fear the Q’eqchi’ activists, will later be used by CGN’s local forces of repression.

Unless and until a full investigation is conducted, the details of the conflict on September 27 will remain unclear and the people responsible for assassinating Adolfo Ich Xaman and injuring other community members will remain free. But it is clear that this “incident” is not isolated. CGN is one representative of a broader expansion of North American mining in Guatemala, which is devastating Maya communities and provoking large-scale Maya protests. Guatemala’s Maya majority is again paying the price of “development.” As one community leader explained to me, people need to understand that “it has to do with the so-called developed countries…. In exchange for maintaining their wealth, we have to die.”

Susan Fitzpatrick Behrens is Associate Professor of History at California State University, Northridge, and a NACLA Research Associate.