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About Publications Researchers
Searching for the gold:
A mid-term evaluation of the costs and benefits of
Goldcorp’s Marlin Mine in Guatemala
The Marlin Mine
Goldcorp’s Marlin gold and silver mine in western Guatemala is now at the halfway mark of its estimated life of 11 years. At the outset, the World Bank, the mine operator, and the Guatemalan government made optimistic projections about the economic and social benefits of the mine to local communities and to the national economy. Since then, there have been two key developments.
First, the mine has generated intense local, national and international scrutiny and controversy focused largely on the adequacy and legality of public information and local consultation procedures, as well as environmental impacts. A host of studies have raised concerns about social and environmental impacts. However, to date there exists no aggregated study evaluating economic costs and benefits.
Second, Goldcorp began and is now nearing completion of the construction of another, nearby mine. The Cerro Blanco gold mine is set to begin operating later this year, with the potential of processing ore at the Marlin mine. Beyond a single mine, Marlin may represent the first step towards a regional mining economy.
GDAE will carry out a comprehensive assessment of the costs and benefits of the Marlin mine based on the experience to date.
The Study
This study gathers available empirical evidence to evaluate the tangible economic costs and benefits of the Marlin mine to local communities. The central research questions are: 1) will the mine generate net benefits to local communities? and 2) what is the distribution of costs and benefits?
The analytical framework of the study encompasses costs and benefits in both the operating and closure phases of the mine. It will examine the following potential benefits:
1. Income - Royalties, taxes, fee; export earnings; jobs (direct and indirect);
2. Development - Supply linkages (enterprise growth/formation); human capital (skills, technical capacities); social investment
The study will examine the following potential costs:
1. Environmental - Water quality degradation and loss of access; post-closure clean up and liability;
2. Health - Toxic exposure;
3. Livelihood - Asset damage/loss; opportunity costs
4. Social - Migration (in and out); income/asset inequality.
The distributional analysis will focus on the distribution of costs and benefits between: 1) national and local governments/communities; 2) local residents and foreign shareholders.
Project methodology and timeline
The study will be based on a review of available literature and on interviews in Guatemala and the US with a range of key players, including in the Guatemalan government, International Finance Corporation, Goldcorp, academia, and Church, environmental and human rights NGOs. An initial draft will be available for comment at the end of September 2010. The final report will be published in late 2010.
Project team
Lyuba Zarsky - Principal Investigator, is Senior Research Fellow at the Global Development and Environment Institute and Associate Professor of International Environmental Policy at the Monterey Institute of International Studies in Monterey, California. With Kevin Gallagher, she is the author of The Enclave Economy, Foreign Investment and Sustainable Development in Mexico’s Silicon Valley (MIT Press, 2007).
Leonardo Stanley - Principal Investigator, is Associate Researcher at the Department of Economics, Centro de Estudios de Estado y Sociedad (CEDES) in Buenos Aires, Argentina.
Kevin P. Gallagher - Project Director, is Senior Researcher at the Global Development and Environment Institute and Associate Professor of International Relations at Boston University.
Timothy Wise - Project Coordinator, is Director of the Research and Policy Program at the Global Development and Environment Institute.
Related Publications
Can Mining Promote Sustainable Development? Maybe, But Not Without State Muscle, by Lyuba Zarsky, GDAE Globalization Commentary, from Triple Crisis Blog, November, 23, 2010.
Gold Fever: Global investor search for “safe haven” makes indigenous Guatemalan communities unsafe, by Lyuba Zarsky, GDAE Globalization Commentary, from Triple Crisis Blog, July 2, 2010.
Read more on GDAE’s work on Foreign Investment for Development
Read more on GDAE’s Globalization and Sustainable Development Program
The Global Development and Environment Institute’s Globalization and Sustainable Development Program examines the economic, social and environmental impacts of economic integration in developing countries, with a particular emphasis on the WTO and NAFTA's lessons for trade and development policy. The goal of the program is to identify policies and international agreements that foster sustainable development. |
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