MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Paso Yobai, Paraguay

Key Data

Company:Latin American Minerals Operational status:exploration Materials extracted:gold Type of mine:open pit Main issues:mining claims

Description

Synopsis: Paso Yobai is Paraguay’s only gold mining district, mined by artisanal miners in the mid-1990s. Latin American Minerals had allowed artisanal miners to continue their operations on a portion of their concession but this has turned to conflict with the formal beginning of operations in February 2012. Artisanal miners make a customary claim to the area based on discovery and first exploitation, while the company holds the legal claim granted by the government of Paraguay. Protesters successfully shut down the mine for several weeks, at which time the company granted artisanal miners the rights to 114 hectares of the concession. Unrest has continued due to ongoing uncertainty about the rights of artisanal miners and repeated violations of employees’ labour rights.

The Paso Yobai Gold Project, owned by Latin American Minerals, is located in the Department of Guairá, Paraguay, near the town of Paso Yobai.[1] Gold is a fairly recent discovery in the region, discovered during the Stroesser regime (1954-1989).[2] It has been exploited by artisanal miners and played an important role in the local economy since at least the 1990s.[3] Latin American Minerals purchased its concession in 2007 and soon began exploration of the area.[4] However, the terms of the sale were called into question. Two lawyers allege they were “deceived” by investors and that the company has avoided paying fees, and have taken legal action.[5] While this is the country’s first major gold mine, it may not be its last.  The Paraguayan government has since announced it sees the project as part of a path towards an expanded mining economy.[6] [7] In 2008, the government passed a new mining law that would increase the total number of concessions granted annually.[8]

Conflict at the Paso Yobai project has primarily been between the artisanal miners, who have been using the land since gold was discovered and have thus made a customary claim to the territory, and Latin American Minerals, which possesses legal title to the concession. In 2010, members of the community engaged in protests with some demanding that the mining company be expelled from Paso Yobai. At this time, the Paso Yobai Mining Association demanded the company give up 1500 hectares of the concession.[9] Despite these protests, Latin American Minerals completed its construction phase in 2011.[10]

Protest reached new levels of intensity in January and February, 2012. While some artisanal miners had continued to use the land in the years following Latin American Minerals’ purchase of the concession, they increasingly found their livelihoods to be under threat. After two weeks of intense protests during testing at Paso Yobai, the company suspended its inauguration ceremonies while members of the community engaged in protests and sit-ins. Company and community sources reported violence and even gunfire.[11] On February 1, the company announced it was suspending operations due to “unsafe conditions and violence”. It later secured an agreement whereby it surrendered 114 hectares to the Ministry of Energy and Mines, to be reserved for artisanal mining, and the mine re-opened several weeks later.[12] However, some artisanal miners remained concerned about the security of their livelihood.[13]

Disputes have continued in Paso Yobai. In 2014, protesters blocked a bridge over the Tebicuary creek, demanding the right to return to work after layoffs and increased protections for artisanal miners.[14] In 2015, former employees of the mine went to the press after the company reduced its workforce from 250 to 80 employees, also alleging the employees who had retained their jobs had faced massive reductions in number of hours worked and delays receiving payment for their work.[15] Labour concerns are especially notable given low royalties in Paraguay and the company’s promise that it would create employment in the region. In 2012 Mercedes Canese, Vice Minister of Mining and Energy, said the royalties were “hardly very much, but at least the company…generates jobs.” This last claim has been disputed.[16]

[1] Latin American Minerals. “Paso Yobai Gold Project.”  http://www.latinamericanminerals.com/properties/paso-yobai/. Accessed May 14, 2016.

[2] Diaz Valinotti, Elvio. “Paraguay, Su Oro, Diamantes Y Otras Riquezas.” http://www.abc.com.py/articulos/paraguay-su-oro-diamantes-y-otras-riquezas-286180.html. Accessed May 14, 2016.

[3] Proactive Investors. “Latin American Minerals Set to Benefit from Growth in Paraguay, Latin America’s Next Hot Mining Region.” http://www.proactiveinvestors.com/companies/news/84346/latin-american-minerals-set-to-benefit-from-growth-in-paraguay-south-americas-next-hot-mining-region-25968.html. Accessed May 14, 2016.

[4] Latin American Minerals. “Paso Yobai Gold Project.”  http://www.latinamericanminerals.com/properties/paso-yobai/. Accessed May 14, 2016.

[5] Ultima Hora. “Abogados Dicen Que Fueron Engañados Por Inversores De Mina En Paso Yobai.”  http://www.ultimahora.com/abogados-dicen-que-fueron-enganados-inversores-mina-paso-yobai-n888068.html. Accessed May 14, 2016.

[6] Color ABC. “Crece El Interés De Las Empresas Mineras En Trabajos De Prospección.”  http://www.abc.com.py/edicion-impresa/economia/crece-el-interes-de-las-empresas-mineras-en-trabajos-de-prospeccion-1227432.html. Accessed May 14, 2016.

[7] No a la Mina. “Quieren Que Paraguay Se Convierta En País Minero.”  http://www.noalamina.org/latinoamerica/paraguay/item/9744-quieren-que-paraguay-se-convierta-en-pais-minero. Accessed May 14, 2016.

[8] Mines and Communities. “Corporate and Smallscale Miners Vie for Gold in Paraguay.”  http://www.minesandcommunities.org/article.php?a=8451. Accessed May 14, 2016.

[9] Beltran, Harvey. “No Deal yet on Paso Yobai Gold Mining, According to Expert.”  http://www.bnamericas.com/en/news/mining/No_deal_yet_on_Paso_Yobai_gold_mining,_according_to_expert. Accessed May 14, 2016.

[10] Latin American Minerals. “Management Discussion and Analysis for the Three and Six Months Ended June 30, 2012, and 2011.” 2012.

[11] Ibid.

[12] Ibid.

[13] Guido Perez, Alberto. “Continúa Conflicto Minero En Paso Yobai.”  http://www.abc.com.py/nacionales/continua-conflicto-minero-en-paso-yobai-1243393.html. Accessed May 14, 2016.

[14] Ibid.

[15] Guido Perez, Alberto. “Empresa Minera, En Conflicto Con Sus Trabajadores.”  http://www.abc.com.py/nacionales/minera-racionaliza-a-su-personal-1376138.html. Accessed May 14, 2016.

[16] Jamasmie, Cecilia. “Despite Violent Demonstrations and a Cancelled Inauguration Ceremony, Latin American Minerals Starts Operations in Paraguay.”  http://www.mining.com/despite-violent-demonstrations-and-a-cancelled-inauguration-ceremony-latin-american-minerals-starts-operations-in-paraguay/. Accessed May 14, 2016.

Bibliography

Beltran, Harvey. “No Deal yet on Paso Yobai Gold Mining, According to Expert.”  http://www.bnamericas.com/en/news/mining/No_deal_yet_on_Paso_Yobai_gold_mining,_according_to_expert. Accessed May 14, 2016.

Color ABC. “Crece El Interés De Las Empresas Mineras En Trabajos De Prospección.”  http://www.abc.com.py/edicion-impresa/economia/crece-el-interes-de-las-empresas-mineras-en-trabajos-de-prospeccion-1227432.html. Accessed May 14, 2016.

Diaz Valinotti, Elvio. “Paraguay, Su Oro, Diamantes Y Otras Riquezas.” http://www.abc.com.py/articulos/paraguay-su-oro-diamantes-y-otras-riquezas-286180.html. Accessed May 14, 2016.

Guido Perez, Alberto. “Continúa Conflicto Minero En Paso Yobai.”  http://www.abc.com.py/nacionales/continua-conflicto-minero-en-paso-yobai-1243393.html. Accessed May 14, 2016.

Guido Perez, Alberto. “Empresa Minera, En Conflicto Con Sus Trabajadores.”  http://www.abc.com.py/nacionales/minera-racionaliza-a-su-personal-1376138.html. Accessed May 14, 2016.

Jamasmie, Cecilia. “Despite Violent Demonstrations and a Cancelled Inauguration Ceremony, Latin American Minerals Starts Operations in Paraguay.”  http://www.mining.com/despite-violent-demonstrations-and-a-cancelled-inauguration-ceremony-latin-american-minerals-starts-operations-in-paraguay/. Accessed May 14, 2016.

Latin American Minerals. “Management Discussion and Analysis for the Three and Six Months Ended June 30, 2012, and 2011.” 2012.

Latin American Minerals. “Paso Yobai Gold Project.”  http://www.latinamericanminerals.com/properties/paso-yobai/. Accessed May 14, 2016.

Mines and Communities. “Corporate and Smallscale Miners Vie for Gold in Paraguay.”  http://www.minesandcommunities.org/article.php?a=8451. Accessed May 14, 2016.

No a la Mina. “Quieren Que Paraguay Se Convierta En País Minero.”  http://www.noalamina.org/latinoamerica/paraguay/item/9744-quieren-que-paraguay-se-convierta-en-pais-minero. Accessed May 14, 2016.

Proactive Investors. “Latin American Minerals Set to Benefit from Growth in Paraguay, Latin America’s Next Hot Mining Region.” http://www.proactiveinvestors.com/companies/news/84346/latin-american-minerals-set-to-benefit-from-growth-in-paraguay-south-americas-next-hot-mining-region-25968.html. Accessed May 14, 2016.

Ultima Hora. “Abogados Dicen Que Fueron Engañados Por Inversores De Mina En Paso Yobai.”  http://www.ultimahora.com/abogados-dicen-que-fueron-enganados-inversores-mina-paso-yobai-n888068.html. Accessed May 14, 2016.