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April 17, 2012

Investors Challenge Goldcorp's Closing Costs for Guatemala Mine
    by Robert Kropp

Two institutional investors warn that Goldcorp faces litigation risks if its plan for funding the environmental cleanup of its mine in Guatemala is inadequate.

SocialFunds.com -- The Unitarian Universalist Service Committee (UUSC) and the Loretto Literary and Benevolent Institution have filed a shareowner resolution challenging Goldcorp's estimations of the cost of shutting down its Marlin gold mine in Guatemala.

The Canada-based mining company has estimated that its closing of the Marlin mine, planned for 2018, will cost $1 million. But the shareowners charge that an independent group of engineers estimate closure and post-closure costs at $49 million. Furthermore, the shareowners argue, "Indigenous peoples whose futures are at stake have not been meaningfully involved in the process to develop a closure and post-closure plan." Pollution and infrastructure erosion are among the long-term environmental challenges likely to be encountered in the region of the mine.

"Failure to adequately address reclamation exposes affected communities to an uncertain future regarding whether or not water will be safe to drink or if anyone will buy crops grown near the abandoned mine site," said Patricia Jones of the UUSC. "The company and the government have a responsibility to respect and protect the communities' human right to water. The long-term health of surrounding communities—which have seen their land used for mining without their consent—is truly at stake."

The shareowner resolution requests that the company to fully fund the closure and post-closure costs of the mine; consult with local communities in developing closure and post-closure plans; and to publicly report on its planning and remediation processes. The shareowners point to the recent $8.6 billion damages award against Chevron in Ecuador as evidence that inadequate environmental cleanup plans exposes the company to the risk of litigation.

Jen Moore, Latin Program Coordinator for MiningWatch Canada, stated, "Goldcorp's CEO is among Canada's 0.01% of top tax-filers and the company's assets now supersede the real GDP of Guatemala. This company can afford to adequately close its mines without further burdening affected communities."

Goldcorp, which was deleted from the Dow Jones Sustainability Index in 2011 due to environmental and human rights concerns, has recommended that shareowners vote against the proposal. The company's annual general meeting will be held in Ontario on April 26th.

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