Guatemala court annuls 10% mining royalty

Guatemala's 10% mining royalty has been annulled by the country's constitutional court, according to press reports.

The royalty, along with tax rises imposed on the telecoms and cement industries in December, was unanimously rejected by the court as unconstitutional, local news website El Periodo said.

The royalty and tax rises were aimed at balancing the budget, and were met by threats of legal challenges by business organizations and criticism over a lack of consultation.

The royalty damaged the country's attractiveness as a destination for mining investment, Raymond James analyst Chris Thompson told BNamericas previously.

Prior to the 10% royalty, companies were required to pay 1%, with Tahoe Resources, Guatemala's main silver, lead and zinc producer with the Escobal mine, paying an additional voluntary 4%.

The royalty was imposed under former president Otto Pérez Molina, who resigned this month to face charges of conspiracy, bribery and customs fraud.

Goldcorp also has the Marlin gold mine in Guatemala, with Solway Investment Group operating the Fénix nickel mine in the country.