"Searching for Gold in the Highlands of Guatemala: Economic Benefits and Environmental Risks of the Marlin Mine"

By Lyuba Zarsky and Leonardo Stanley

Download the report.

The Global Development and Environment Institute at Tufts University released a report by economists Lyuba Zarsky and Leonardo Stanley on the economic benefits and environmental risks of the Marlin mine in the Department of San Marcos, Guatemala, which is owned and operated by Goldcorp, a Canadian company. The mine has generated intense controversy since 2003, stemming from concerns about environmental contamination and violations of the rights of indigenous communities.

The Inter American Commission on Human Rights of the Organization of American States recommended in 2010 that Goldcorp suspend mining operations until the Commission could rule on the merits of the petition submitted by the communities. The company claims it is complying with environmental and human rights standards and that the mine offers significant economic benefits, to Guatemala and to local communities.

To assess these claims, GDAE researchers examined the economic benefits of the Marlin mine and assessed short and long-term environmental risks. The authors conclude that, overall, long-term environmental risks significantly outweigh the economic benefits of the mine based on three central findings:

1.    The Guatemalan government’s share of Marlin’s high profits is small. Guatemala receives about 42% of mine revenues, with local communities receiving only about 5% of revenues. This is far below the best practice in global mining operations.

2.    The environmental risk the Marlin mine poses to local communities is exceptionally high and likely to increase over the remaining life of the mine and in the post-closure phase. While the mine generates significant economic benefits currently, all benefits will abruptly cease when the minerals have been extracted and the mine is closed down.  Environmental risk is high due to inadequate government regulation and is likely to increase in the long-term due to heavy metals contamination in water from acid rock drainage, especially in the context of greater rainfall due to climate change.

3.    The Marlin mine is contributing little to long-term sustainable development in Guatemala.  Little of the royalty and tax revenue generated from the mine has been invested in public goods such as health, education and infrastructure, which could contribute to economic activities beyond the mine and after the mine has closed.

Zarsky and Stanley make several recommendations for both Goldcorp and the Guatemalan government to increase oversight and regulation of mining and assess the environmental risks to the local population surrounding the mine, with a particular focus on water contamination. They recommend that the Guatemalan government comply with the request to suspend mining operations and that Guatemala’s Mining Law should be amended to capture a higher share of mine revenue and give a substantially larger portion to affected communities. They also recommend that mine revenues be invested in building productive capacities for broad-based economic development in Guatemala.

The report (which is also available in Spanish) is a product of the GDAE-sponsored Working Group on Development and Environment in the Americas, which has examined the impact of foreign direct investment on the region. 

The full report, “Searching for Gold in the Highlands of Guatemala: Economic Benefits and Environmental Risks of the Marlin Mine,”  available in both English and Spanish, along with the Executive Summary and a Report Fact Sheet, can be downloaded at: http://www.ase.tufts.edu/gdae/policy_research/marlinminereport.html

Launch Events

The authors will be presenting the report in Guatemala, Ottawa, Canada, and Washington, D.C. and discussing their findings and implications for the future of the Marlin mine. Visit our website for details on the presentations.

Learn more about GDAE’s Globalization and Sustainable Development Program.