Goldcorp Marlin mine in Guatemala has been dealt an adverse ruling from the Inter-American Commission on Human Rights, which has called on the project to be shut pending an investigation into alleged human rights abuses and environmental problems.
The commission, part of the Washington-based Organization of American States, considers its rulings binding on member governments, although media reports in Guatemala say the country's president, Alvaro Colom, used one of his regular radio addresses to indicate he opposes closing the operation.
The Marlin mine, a combination underground and open pit operation, produced about 275,000 ounces of gold last year, or about 11 per cent of Goldcorp's output, along with 4.1 million ounces of silver, worth a combined $416-million (U.S.) at current prices.
Goldcorp hasn't had a formal indication from the government on how it will respond to the ruling, which was issued on May 20 and reportedly requires Guatemala to comply within 20 days.
"I am not aware of any official statements from the government concerning the matter," Jeff Wilhoit, Goldcorp vice-president of investor relations, said of the ruling.
Maria-Isabel Rivero, commission press director, says the call to cease mining is obligatory on Guatemala and ensures that if the alleged environmental and human rights concerns are found to be valid, local conditions would not be worsened by continued activity over the year or two it would take to investigate the claims.
"For us it is binding and our reasoning is we are not [a non-governmental organization.]We're an intergovernmental organization created by the states themselves," she said.
Under prodding from a shareholder proposal from Vancouver-based Northwest & Ethical Investments LP, Goldcorp commissioned its own assessment into conditions at the mine, which was also released last month and was critical of Guatemala's poor human rights climate. Among the problems detailed were the 2005 murder of a local resident by an off-duty mine guard and the killing the same year of a protester at a mine blockade by public security forces. None of the police or military officers involved in the protester killing have ever been prosecuted or disciplined, according to the report.
The commission says it is investigating allegations that the government issued the mining concessions and allowed mining to begin "without the prior, complete, free, and informed consultation" of local Mayan residents, among other claims.