Topics CoveredWelcome to GuatemalaOverview of ResourcesIndustrial MineralsMetalsFossil FuelsInvestmentSources
Welcome to Guatemala
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Guatemala, with a total population of 14,099,032 as of July 2012, is located in Central America, bordering the Gulf of Honduras (Caribbean Sea) between Honduras and Belize, and bordering the North Pacific Ocean, between El Salvador and Mexico.
Guatemala covers a total area of 108,889 km2 and has a tropical climate. The country is densely populated with a GDP per capita that is about one-half that of the average for the Caribbean and Latin America.
In 2009, Guatemala experienced a very slow progress in its economy due to the global recession that reduced foreign investments and export demand from Central American and US markets. This depreciating economy status gradually recovered in 2010-2011 and by the year 2012 the country hopes to normalize its economic situation.
|The national flag of Guatemala.|
Image Credit: CIA factbook
Overview of Resources
Guatemala has abundant mineral reserves that include uranium, sand and gravel, nickel, limestone, petroleum, coal, gold, copper, iron ore and cobalt. These minerals play a significant role in providing investment potential for fostering development and exploration in the country.
In 2010 the revenues generated from Guatemala’s mining sector amounted to about $5.6 million in comparison to $4 million in 2009.
Details of Guatemala’s mineral production in 2010 are given below:
- Gold ranked first, accounting for 46%
- Crude petroleum ranked second, accounting for 35%
- Silver ranked third, accounting for 17%
In 2010, the production of industrial and metallic minerals in Guatemala saw an increase by 1.9%, compared to 1.6% in 2009. In 2009, Guatemala’s mineral production increased to $797 million as a result of an increase in the production of nonfuel minerals that amounted to $519 million.
In 2010, the mine output of gold in Guatemala increased by about 3.6% and silver increased by about 51% in comparison with the production status of 2009. The most important deposits of gold are located in the mining district of Concepción Las Minas, South East of the Department of Chiquimula.
The production of iron ore dipped to about 71% in 2010 as a result of the decreasing demand for iron ore from the domestic construction sector.
The map of Guatemala. Image Credit: CIA Factbook
Guatemala’s imports of lubricants and mineral fuels were valued at about $2.5 million in 2010. The export of crude petroleum was valued at $230 million.
In 2010, Guatemala received crude petroleum under preferential pricing from Venezuela and Mexico. According to the Caracas Energy Accord, Venezuela provided extra shipments of crude petroleum to Guatemala. Guatemala further became a member of the Petrocaribe Energy Cooperation Agreement (PetroCaribe), which allowed the country to obtain more petroleum from Venezuela by initially paying only 50% of the required cost and paying the balance within a period of 25 years.
Guatemala’s mining conflict is a major roadblock for mining operations in the country. Recently, many communities in Guatemala protested against mining companies as they fear that indiscriminate mining in certain areas will lead to damage of land and water pollution, thus affecting their livelihoods. These communities accused the government of permitting exploration in indigenous territories without consulting local communities and failing to fulfil its international obligations.
As a result of this ongoing protest, the government had delayed the revision of Guatemala’s mining law and had postponed the mining reform proposal according to which the government will purchase 40% shares from new mining companies. The government also made it clear that it has no plans to nationalize mines.
The revision of the country’s mining law is expected to boost several mining projects. The future of the mining industry in Guatemala will largely depend on the government’s ability to resolve the ongoing mining conflict and take necessary steps to stabilize its mining operations.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.