Guatemala court confirms suspension of Tahoe mining licenses

By Sofia Menchu

GUATEMALA CITY (Reuters) - Guatemala's highest court on Monday confirmed the suspension of mining operations at the San Rafael unit of miner Tahoe Resources Inc. (TAHO.N), and ordered the government to carry out an immediate consultation of the local indigenous population.

The Constitutional Court upheld the suspension of licenses at Tahoe's Escobal mine, one of the world's biggest silver mines, and at the company's smaller Juan Bosco mine.

The licenses for the two mines were suspended in July 2017 after an anti-mining group alleged that the energy and mining ministry had not consulted with the Xinca indigenous people before awarding the license to Tahoe.

Constitutional Court magistrate Martin Guzman told a news conference that the suspension would remain in place until the consultation had been carried out. After that, it was possible that Tahoe could regain its licenses, he said.

Tahoe said in a statement it did not yet know how long the ministry would take to complete the consultation. Nevertheless, the company noted that a consultation in a similar case had been carried out by the ministry within six months.

The court was expected to issue a formal resolution in coming days, Tahoe said. The company would provide further updates after reviewing the written ruling.

The suspension of Tahoe's operations in Guatemala has hurt the company, leading to a second-quarter loss. The company's chief executive said last month that ending the dispute over the San Rafael unit was his top priority.

(Reporting by Sofia Menchu; additional reporting by Ismail Shakil; editing by Tom Hogue and Richard Pullin)