Industry Trend Analysis - Mining Sector To Face Headwinds - FEB 2017

BMI View: Guatemala ' s min ing industry value growth will face headwinds from the closure of a major gold mine, proposed tax increases, and strong local opposition to mining.

Guatemala's mining industry will post subdued value growth over the coming years, as the December 2016 closure of Goldcorp's Marlin mine dents gold output, and proposed tax increases and heightened tensions between the sector and local communities deter foreign investment. Despite significant reserves of gold, silver, lead and zinc, we forecast Guatemala's mining industry value to total only USD942mn in 2017, representing approximately 1.0% of the country's GDP.

Goldcorp's Marlin mine, which produced 169 thousand ounces (koz) of gold in 2015, was scheduled for retirement in December 2016. In October, the firm updated Marlin's proven and probable reserves to 70koz of gold from 130koz in 2015.

Gold To Lag Behind
Guatemala - Gold & Silver Production Growth (% y-o-y)
e/f = BMI estimate/forecast. Source: BMI, USGS

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