Guatemalan president retracts proposed mining law reform

President Otto Perez Molina has officially withdrawn two proposed amendments to the Guatemalan Constitution pertaining to mining law reform, including a highly controversial trial balloon which would have permitted state ownership of up to 40% in new mining projects. If adopted, Article 125 would have allowed the Guatemalan government to acquire up to 40% ownership or equity in future new mining projects, which were not already operating in Guatemala. Officials had said the government would have had to purchase shares in a mining company in order to participate and that it would not nationalize mines.

The president and his advisors also withdrew the proposed Article 242, which would have created a Sovereign Fund to be funded by profits generated by state companies, along with revenues from mining and oil industries. The Sovereign Fund would have been used for large infrastructure projects. A Government spokesperson said the decision to exclude the mining sector from proposed constitutional reforms was due to the concern of foreign investors regarding a possible destabilization of their mining investments resulting from the constitutional changes.