Guatemalan lawsuits to continue against HudBay, says lawyer

10th August 2011 By: Matthew Hill

TORONTO (miningweekly.com) – Lawyers representing alleged human rights abuses victims of Canadian Mining firm HudBay Minerals in Guatemala will continue their efforts to sue the company for a combined $67-million, despite the TSX-listed firm’s announcement late last week that it would sell the Fenix nickel project, where the alleged abuses occurred.

“We believe this sale was prompted in part by the severe human rights issues at HudBay’s Fenix project that dogged the company at every turn,” said Murray Klippenstein, a lawyer representing one of the victims.

“HudBay and HMI Nickel cannot avoid liability for their past actions by selling the project,” he added.

Toronto-based HudBay said it was selling the project because it didn’t fit its strategy of focusing on volcanogenic massive sulphide and porphyry deposits.

"Our position remains the same," HudBay spokesperson John Vincic said on Tuesday, when asked for comment.

CEO David Garofalo said in March that the company was seeking partners to develop the Fenix project, for which it had concluded a feasibility study at the start of 2011.

"The strategic review at Fenix always contemplated identifying a partner or an outright sale of the project. It was a thorough process and at the end we concluded the offer from Solway Group was the best option for us and our shareholders," Vincic said in an email to Mining Weekly Online.

HMI Nickel is a unit of HudBay that owns the Fenix project.

Hudbay announced on Friday night it would sell the asset, for which it paid $460-million in 2008, to the privately held Solway Group, based in Cyprus, for $170-million.

Solway, which owns mines in the Ukraine and Macedonia, will pay $140-million in cash on closing and $30-million once certain milestones in the nickel project’s development are reached.

“Our clients will continue to vigorously pursue their claims against HudBay and HMI in Ontario courts to ensure these Canadian companies are held accountable for their past wrongful acts,” said Klippenstein.

One of his clients, Angelica Choc, claimed in court papers filed in Ontario earlier this year that security forces under HMI’s employ “hacked and shot to death” her husband Adolfo Ich Chamán, who she said was an outspoken critic of the company in El Estor.

She is suing the company for $12-million, and HudBay has denied the claims.

In March, Klippenstein’s law firm said another of his clients, Rosa Elbira Coc Ich, and ten other women from a community near the Fenix project, were suing HudBay in Ontario for $55-million for alleged “mining-related” gang rapes in 2007.

HudBay also denied these allegations.

Klippenstein, who was not immediately available for comment, is also one of the lawyers representing the claimants in a $45-million class-action lawsuit against the Toronto Police Services Board and the Attorney General of Canada, stemming from the G20 protests in the Canadian city last June.

HudBay is scheduled to announce its second-quarter earnings overnight.