Mining Secrets: Data Leak Reveals Aggressive Tactics of Mining Giant in Guatemala

From drafting proposals to spread rumors about and “buy” community leaders to transferring money to the national police, Solway Group, which owns the Fénix mine in El Estor, Guatemala, wields its money and power to influence decisions across the country. A massive data leak accessed by Forbidden Stories and shared with 65 journalists around the world gives unprecedented insight into how this secretive multinational operates.

Residents of the Las Nubes community in a photo from December 2021. (Credit: SVT)

By Phineas Rueckert
and Paloma Dupont de Dinechin
Reading time: 16m

MINING SECRETS | March 6, 2022

It was the result of months of intense dialogue and a long-awaited vote. On January 6, 2022, the Fénix nickel mine in El Estor, Guatemala – suspended since February 2021 for failing to sufficiently consult local communities on environmental and social concerns – was allowed to resume extraction, after the Guatemalan Ministry of Energy and Mines (MEM) signed a resolution in its favor.

The decision followed a consultation between the Guatemalan government, community leaders in El Estor, and representatives of Solway Group, a conglomerate headquartered in Switzerland whose management staff is mostly made up of Russian and Estonian businesspeople. Press statements from Solway Group, which bought the mine in 2011 and runs it through local Guatemalan subsidiaries CGN and Pronico, and the government depict a harmonious and inclusive process.

“The important thing about the process is that it started from the top leadership – from the communities – with the input gathered from the inhabitants of the communities in the area of influence,” Oscar Pérez, the Vice President for Sustainable Development at MEM, said.

But behind the scenes, it turns out, Solway was quietly pulling the strings. Through a foundation called Raxché, which is almost entirely financed by Solway’s subsidiaries, the company had been regularly donating money to community leaders involved in the consultation since at least October 2020 – one year before the process even started – according to bank records and invoices seen by Forbidden Stories.

Between October 2020 and January 2021, Raxché transferred 38,500 Quetzales (roughly $5,000 USD) per month to the National Association for Mutual Development (ANADE) for “strengthening” one of two indigenous councils that voted on the mine’s reopening. In at least two instances, 10,000 Quetzales ($1,300 USD) came in the form of direct “economic support” to four members of the council, a hefty sum in a country whose average monthly salary is 3,700 Quetzales, or $481.

A receipt from ANADE showing proof of payment by Raxché, which is funded nearly in full by donations from the mine’s subsidiaries CGN and Pronico. (Leaked document accessed by Forbidden Stories and 20 media partners)

“​​Some sell their wills here, as clear as day,” said Maria Choc, an El Estor resident, in an interview with journalists from the Forbidden Stories consortium.

In a letter to the Forbidden Stories and its partners, Solway denied any wrongdoing. “Solway Investment Group is operating fully in line with applicable national laws and international regulations,” wrote CEO Dan Bronstein. “We refute any allegations brought up without factual basis.”

Yet a trove of internal documents, accessed by Forbidden Stories and shared with 20 partners around the world as part of the Mining Secrets project, confirms El Estor residents’ long-held suspicions about the company.

For the first time, Forbidden Stories and its partners were able to peel back the curtain of the secretive and powerful conglomerate, and today are revealing efforts to manipulate local communities in the lead-up to the consultation, which concluded favorably of reopening the mine in December 2021. The documents, which include 470 mailboxes and 8 million documents, such as shipping records and financial information, are riddled with scandals: environmental damages; proposals for “buying” community leaders, as well as payments to police; detailed plans to displace local communities; and images documenting surveillance of journalists who investigated the mine.

The Fénix Mine shown from above. (Credit: Forbidden Stories)


Community consultation for sale

Nestled into the mountains of northeast Guatemala, El Estor sits near a nature reserve – home to a number of endangered animals – and the country’s largest lake, Lake Izabal. Indigenous Maya Q’eqchi from this region have traditionally lived off of cardamom, corn and bean cultivation. But the communities that make up El Estor are built on top of a more valuable resource: nickel.

In 1960, the Fénix Project was launched to extract and sell this resource, which can be found in everything from granite countertops to skyscrapers and US coins. Solway bought the mine, nickel processing facility and power plant in 2011 and began operating it in 2014. The company says that Fénix provides nearly 2,000 jobs and that Solway invests in “developing the social infrastructure in its local areas of operation in Guatemala” through jobs, training programs and other projects. But in 2017, the company became the center of a controversy after it was accused by local fishermen of polluting Lake Izabal and a fisherman was killed by police during a protest. As Forbidden Stories reported in 2019 as part of the Green Blood project, which it coordinated, journalists for Prensa Comunitaria who covered the protest were threatened and forced into hiding.

The community won a major concession in 2019 when the Guatemalan Constitutional Court ordered the mine to cease its extractive operations. In February 2021, the order finally went into effect, with the mine and the Guatemalan government required to engage in a thorough consultation process with local leaders before reopening. But indigenous Guatemalans say that this process has been biased.

“There is no interest from the government in generating a real dialogue,” Lucia Ixchiu, an indigenous activist and founder of Festivales Solidarios, a collective that protested against the mine, told Forbidden Stories on the phone.

Community members say that four ancestral leadership bodies that represent the communities were blocked from the consultation process.

El Estor residents protest the mine in October 2021. (Credit: Prensa Comunitaria)

But in a letter from one of Solway’s Guatemalan subsidiaries, Pronico, the company argues this was by design. “[The participation of the ancestral leadership bodies] was rejected so as not to damage the integrity of the community consultation procedure established by the Constitutional Court,” Pronico’s administrative director Marvin Méndez wrote.

In at least one case, Forbidden Stories was able to confirm, an indigenous leader was kicked out of one of the indigenous councils after she refused to accept payments from the company.

In 2019, company representatives reportedly asked Guadalupe Xol Quinich, an ancestral leader and member of El Estor’s indigenous council, to appoint herself “amicus curiae,” a legal status under which a person offers to voluntarily present information to the court that may help it decide a case, without being directly connected to it. The price for her signature was 3,000 Quetzales (about $400), she said in an interview. When she refused to sign, she was replaced by another person on the council.

“We’re very divided among brothers and sisters of the community,” she told a member of the Forbidden Stories consortium.

Again, leaked documents confirm fears that the consultation was not fully independent. In one pre-consultation document, plans even included “compra de lideres” – literally “buying of leaders” – in two neighborhoods in El Estor. (In a written response to Forbidden Stories, Méndez said that no payments were ever made to these leaders.) In 2021, Solway’s subsidiaries scheduled more donations for “key actors and interested parties” related to the consultation.

“It is totally contrary to international standards on consultation and mainly to the principle of good faith,” Quelvin Jiménez, a lawyer in Santa Rosa who defends land rights for the Xinca community in southwestern Guatemala, told Forbidden Stories. “Cooptation of leaders, parallel negotiations or negotiations with certain interest groups are contrary to good faith and should not be allowed by the state,” he said, referring to a previous court ruling by the Inter-American Commission on Human Rights.

The tactics are no doubt familiar to members of the fishing association Bocas del Polochic, which had initially protested against the mine before later supporting it – to the extent of appearing in promotional videos for the company.

Cristobal Pop, a fisherman from El Estor. (Credit: Benjamin Thuau / Radio France)

Documents show how Solway turned the association into a friend of the mine.

“During the first quarter of 2020, make a donation of $34,000 for the purchase of 10 pieces of fishing equipment with the intention of maintaining the leaders and partners of Asociación Bocas del Polochic as allies,” a 2019 community engagement document from one of the company’s subsidiaries outlines.

“The company found weakness in the poverty of the community,” said Cristobal Pop, a fisherman from El Estor.


Solway’s work plan: “fictitious jobs,” “crop fires,” “rumors”

In Las Nubes, the signs of poverty are everywhere.

Members of this small indigenous community located several hundred meters from the mine’s nickel processing factory live in houses with dirt floors and roofs made of sheet metal. Faced with deteriorating environmental conditions affecting cardamom and other crops, many residents have had to take on jobs as manual laborers at the mine in order to survive.

The community’s strategic location has long posed a major challenge for Solway’s subsidiaries CGN and Pronico. Starting in 2014, these two local subsidiaries authored dozens of reports about Las Nubes – with an escalating range of tactics envisioned to gain access to the valuable land below their homes.

As it appears to have done with members of the community consultation, Solway lavished the Las Nubes community with donations. Over four years, the company indirectly invested more than $200,000 into Las Nubes through Raxché, the foundation that in 2019 and 2020 was nearly completely funded through donations from Solway’s subsidiaries, according to an internal report.

Residents of the Las Nubes community wash dishes. (Credit: SVT)

Documents show how the company attempted to gain insight into community relations by plying Las Nubes with favors: repainting the church to “improve the relationship with local religious leaders,” organizing a soccer friendly to “gain proximity to important leaders in community decision making” and participating in a Mother’s Day march as a way to help with the “evaluation of group behavior.”

Other donations were more targeted. In a 2021 document titled “Specific Plan,” for example, the company planned to provide a job for the son of one community leader and a new chainsaw for another.

One 2016 document suggests the company didn’t stop there, also proposing the creation of so-called “fictitious jobs,” such as road flaggers, and paying “artificial salaries” to residents. (In a written response to Forbidden Stories and its partners, Méndez denied that the company had paid fictitious salaries, saying: “This information does not correspond to reality.”)

The aim of these investments, according to numerous reports iterated between 2016 and 2019, was simple: “To obtain the voluntary relocation of the population outside the area of mining interest in the shortest possible time.”

An internal work plan from Solway’s subsidiary Pronico, which proposes strategies for relocating the Las Nubes community.

But community members refused to leave Las Nubes, citing ancestral ties to the land.

Paolina Chetek, a resident of Las Nubes whose family members work at the mine and whose husband was reportedly offered money by the company to give up his land, told members of the Forbidden Stories consortium that donations were of little interest to her: “We don’t want to receive money, because money is like carbonated water: bubbles that disappear.”

“I will resist until the end, because my children have no other place to grow up and for their future life,” she added.

Paolina Chetek, a resident of Las Nubes. (Credit: SVT)

When voluntary displacement failed, more coercive measures were also envisioned – although it’s unclear whether these plans were ever carried out.

A February 2020 “work plan” aimed at achieving the resettlement of the Las Nubes community included proposals such as firing workers who refuse to give up their land and contaminating cardamom crops with agrochemicals.

In an email from the same month, sent by the local subsidiary’s community relations expert to administrative director Marvin Méndez with the subject line “Complementary Proposition Las Nubes,” ideas for displacing Las Nubes residents were even more radical: spreading rumors of an HIV epidemic among community leaders, paying local criminals to set off intentional fires to destroy cardamom crops, and starting a rumor that one community leader was given his home as a bribe. The authors of the report note the “pros” and “cons” of each possible strategy. In the section on hiring criminals to set off crop fires, for example, the authors write that the advantage is the “destruction of their methods of subsistence,” but note in the disadvantages column that the criminals might reveal who paid them. The proposed methodology for achieving these different strategies was consistent: “payment of a bribe.”

A screenshot of an internal document labeled “Ideas Plans Las Nubes.” The first proposed idea reads: “Rumors of HIV-AIDS infections promiscuous leaders.”

Asked specifically about these methods, Méndez, the recipient of the email in question, reiterated: “This information does not correspond to reality.”

Later that year, however, Solway’s strategy appears to have changed. Instead of attempting to voluntarily displace the community, the company began buying up individual parcels of land within Las Nubes – allowing it to start mining operations in those areas, according to one report.

In one negotiated parcel, the estimated nickel haul was 500 tons – when mined worth about $165,000, according to their own calculations.

“The company is hurting our community. They are harming our environment and our cultures,” Abelino Pantzir, a Las Nubes resident and father of eight, said in a December interview in Las Nubes, but “when they give us a small opportunity, we take it.”

Interviewed in El Estor by members of the Forbidden Stories consortium, a representative of Solway’s local subsidiary said that no plans to displace Las Nubes “ever” existed.

“The company does not plan to relocate the residents of Las Nubes,” Méndez agreed. “The company invests in Las Nubes, contributing to its greater prosperity.”

Abelino Pantzir, a resident of Las Nubes during an interview in December 2021. (Credit: SVT)


Judges, politicians and police in the company’s pockets

Enrique Xol is one person with first hand knowledge of Solway’s methods. Xol, who agreed to speak on the record about his experience with the company for the first time, is a member of one of El Estor’s four ancestral councils and a vocal critic of the mine.

In 2017, he attended a roundtable discussion between community leaders and the mine at the Paraíso hotel, about 20 kilometers from El Estor. After the discussion, Xol told members of the Forbidden Stories consortium, he was approached by the president of one of Solway’s subsidiaries, Dmitry Kudryakov. Kudryakov reportedly took Xol aside and, through a translator, peppered him with questions. “What do you want? Do you want a project? Do you want anything?” Xol remembered Kudryakov asking.

To Xol, it felt like bribery. He said no.

Documents and internal emails accessed by Forbidden Stories suggest that this sort of behavior may have occurred on a larger scale.

In one 2016 email thread under the subject line, “URGENTE,”company higher-ups passed around lists of “key actors” to receive a “potential” Christmas gift. Per the email, the presents were to be offered “as courtesies, as we do every year.”

In response, a lawyer for one of Solway’s subsidiaries included a particularly interesting entry in his wish list: “Court of First Instance of Puerto Barrios.” Underneath, the lawyer specified that the intended recipient was the judge himself – at the time Edgar Aníbal Arteaga López, who later ruled in favor of Solway in a case the company brought against local fishermen’s groups and journalists.

A December 2016 email sent to staff of Solway’s subsidiary with the subject line: “URGENT,” asking for proposals for individuals to receive a “potential” Christmas basket from the company.

Arteaga denied having “ever received any gifts from CGN-Pronico or any other entity.” The company’s subsidiaries, for their part, said that sending gifts to “friends with whom we have interacted during the year” was “common practice” but that these gift baskets were “only given to people when it is not prohibited by law.”

“Christmas baskets are not given to judges,” Méndez stressed.

However, another internal document, “List of Proposed Actors to Give Christmas Presents Pronico/CGN 2016,” includes seven mayors, seven community leaders, two judges, two priests, two journalists and a bishop among the more than 100 entries from across multiple regions in and around El Estor.

Email exchanges and internal files also document a close relationship between Solway’s subsidiaries and Guatemala’s National Civil Police (PNC), who in 2021 were condemned by human rights bodies for “excessive use of force against demonstrators and members of the Q’eqchi’ Mayan communities, as well as acts of repression against journalists and media outlets.”

Guatemalan police form a line during a protest in El Estor, in October 2021. (Credit: Prensa Comunitaria)

Over the course of 2020, one of Solway’s subsidiaries, Pronico, made at least five donations to Raxché for “aporte strategico” (strategic support) of the PNC, worth roughly 350,000 Quetzales ($45,000 USD) in total. National police officers stationed at various points in and around the mine may have also been fed on the company dime, leaked emails show.

In one email addressed to “Señor Director” (presumably Kudryakov), Roberto Zapeta, the head of security at one of the local subsidiaries, considered the food payments to be “more cost-effective or better received by the PNC than general input support,” and recommended that “necessary support be given to all of them.”

“Human nature is reactive: if you stop supporting them there is a potential strategic risk that is worth analyzing,” Zapeta concluded.

These payments, Jiménez, the lawyer in Santa Rosa, said, “could constitute the crime of influence peddling or bribery, depending on the terms on which it was handed over or what they asked for in return.”

However, when asked if they had given any donations to the PNC during the unrest in El Estor, Méndez answered with a single word: “No.”

A photo taken by journalist Carlos Choc during a fishermen’s protest in 2017. (Credit: Carlos Choc)


Russian state of mine

In Fall 2021, indigenous Maya Q’eqchi in El Estor took to the streets to protest the mine for a second time since 2017. “El Estor Resiste” (“El Estor Resists”) became a battle cry after peaceful protests were repressed and a state of siege was announced by the Guatemalan government in October.

El Estor protesters weren’t just angry about the community consultation, but about what they viewed as multinationals’ control over the state of Guatemala.

“Only in Guatemala do we exchange mineral wealth for crumbs,” lawyer Rafael Maldonado, who represents the fishermen’s association in El Estor, wrote in a Facebook post on November 12, 2021. “The mining company in El Estor earns billions a year and these are the pittances it pays, leaving behind destruction and contamination. All thanks to corrupt officials and country sellouts.”

Lucia Ixchiu, at Festivales Solidarios, agreed: “The State of Guatemala is functioning on the basis of the transnational business interests,” she said. “We are talking about a multimillion dollar company, with all the resources, all the support and guidance of the state.”

A protester empties a plastic bag full of tear gas canisters during a protest in El Estor, in October 2021. (Credit: Juan Bautista Xol / Prensa Comunitaria)

Until now, Solway’s direct influence on the state has not been proven. But documents in the leak prove that the company’s subsidiaries have – at the very least – economic ties to a Russian-owned mining company accused of bribing the president.

In Summer 2021, before the protests in El Estor, a scandal that came to be known as the “magic carpet” affair was revealed by whistleblowers who fled the country. They claimed that representatives of Russian-owned mining conglomerate Mayaniquel S.A. had paid Guatemalan President Alejandro Giammattei for privileged access to a port in the city of Puerto Barrios, passing along bribe money in wads of cash rolled up into a carpet.

Solway has always denied its connection to the scandal, and attempted to distance itself from Mayaniquel S.A. The company released a statement denying “any involvement in the bribing case.”

However, emails correspondences and contracts in the leaked documents show an active commercial relationship between one of Solway’s subsidiaries, Pronico, and Mayaniquel S.A., raising additional questions about the connections between the cabal of Russian mining interests active in Guatemala and their influence on top politicians.

Internal emails and contracts show that Pronico and Mayaniquel inked a nickel ore contract worth more than $200,000 in late November 2019. The contract was signed by both parties on November 21, 2019 and revised in January 2021.

In responses to Forbidden Stories and its partners, both Pronico and Mayaniquel confirmed a commercial relationship between the two companies, but nothing more.

“Mayaniquel’s only relationship with Pronico is purely commercial; and involves the sale of nickel ore,” a Mayaniquel representative said in a statement shared with Forbidden Stories. “Mayaniquel has no other relationship whether commercial, corporate or otherwise with CGN/Pronico and/or the Solway Group and is not affiliated with or otherwise related to CGN/Pronico and/or the Solway Group.”

Despite the scandals, Solway’s bottom line hasn’t seemed to be affected – thanks in large part to the rising global demand for nickel.

“These minerals are at a high price right now,” Guadalupe Garcia Prado, a researcher at the Observatory for Extractive Industries, said in a phone interview. “And Solway, they’re willing to go further in the impunity, corruption and violence to get what they want,” she added.

Up until the Russian invasion of Ukraine, the company operated mines in Ukraine, Russia, Macedonia and Indonesia. (In a statement on March 3, Solway announced it had suspended all mining activities in Russia.) In Africa, Solway bought up land in the Nimba mountain range in Liberia through a subsidiary, Solway Mining Incorporated. In Liberia, where more than half a million people live in extreme poverty, the subsidiary promised schools and health centers. Instead, residents say they have been let down.

“Solway is proceeding wrongly,” the chairman of the local environmental protection agency told Mongabay. “Our people did not anticipate that it would behave in the manner it is behaving, and this is my only regret.”

Candles are lit as part of an ancestral ritual in El Estor. (Credit: Forbidden Stories)


Solway: The Swiss Connection

Much like El Estor, Zug, Switzerland is located on a lake, the Zuggersee, and nestled into the mountains. The weather, however, differs greatly – with temperatures in the winter regularly dropping below 0 degrees Celsius.

It is here in this quaint Swiss mountain town that Solway is based, and from where the multinational company has worked to launder its image, far from the protests and controversies in El Estor.

In Zug, the leaked documents show, Solway appears to have rubbed shoulders with some of the country’s most powerful corporate PR firms, who drew up plans for “enhanced reputation” and “detection of issues” in Guatemala at a time when Switzerland was vigorously debating a referendum that might have held companies like Solway to greater environmental and human rights standards.

Solway, of course, is far from the only Swiss company that has been accused of environmental damages abroad and failing to properly consult indigenous communities on extractive projects. In response to this, a collection of civil society organizations came together in 2019 to form the Swiss Coalition for Corporate Justice. The group proposed a referendum on a new piece of legislation called the Responsible Business Initiative (RBI). If adopted, the legislation would have imposed stricter human rights and environmental regulations on international companies based in Switzerland.

The RBI may have set off alarm bells within Solway. Internal documents show how a report by Economiesuisse, one of the key PR firms that opposed the ballot measure, was sent around to Solway higher-ups.

In November 2020, the initiative failed to win the support of more than half of Switzerland’s 26 cantons, and a watered-down counter initiative was adopted. In Zug, a key node for the Swiss business community, the RBI was voted down by a large margin.

While it’s not clear if Solway attempted to sway the referendum vote, the company nonetheless remained in touch with several PR firms, as well as the research institute SwissPeace, whose main client is the Swiss government.

In an email, SwissPeace confirmed that it continues to advise Solway on “their efforts to understand and respect existing international principles and expectations.”

Around the same time – Fall 2019 – pressure was also mounting against Solway from within the European nation, as well. Guatemala Netz, a small Christian solidarity network based in Bern and Zurich, was preparing to publish a report critical of the company and had sought comment from Solway Group.

Guatemala Netz first got in contact with Solway after the fishermen’s protests in 2017, and exchanged five emails and letters between 2017 and 2019, according to Alice Froidevaux, a member of Guatemala Netz. Over time, she said, the marks of more professional PR and communications training were noticeable.

Solway’s new PR strategy was simple: avoid bad press at home and abroad. So as Guatemala Netz got ready to publish their report, Solway went on the offensive, according to Froidevaux. Solway employed a carrot-and-stick strategy typical of many multinational companies – Froidevaux explained – on one hand offering up a dialogue with the company that Guatemala Netz felt was disingenuous and on the other implying possible legal action against the small network for their refusal to cooperate.

“When you don’t want to dialogue, you are the bad part,” Froidevaux said.

Emails shared with Forbidden Stories chronicle Solway’s increasingly aggressive approach to the small solidarity network, especially as the group prepared to publish a report critical of the company in November 2019.

“All the false accusations you have accused us of over the last two years and the fact that you have neither visited the company’s environment nor been able to see for yourself in person, and have also refused our offer to visit the company – will certainly be the subject of a thorough investigation,” Solway representative Denis Gerasev wrote in response to Guatemala Netz’s detailed questions about Solway’s environmental impact. “We consider your letters to be intimidation of the company.”

“Obviously we were a little bit worried,” Froidevaux said, referring to the letter. “We are small organizations [without] a lot of financial resources so legal action would be very difficult for us to manage.”