Federal Court Allows Minera Cuzcatlán to Continue Operations

Fortuna Silver Mines has reported that a federal court has granted an injunction to allow its Mexican subsidiary, Minera Cuzcatlan, to continue operating its San Jose mine under the terms of the 12-year Environmental Impact Assessment (EIA) previously granted by the Ministry of the Environment and Natural Resources (SEMARNAT). The company assured that it is in full compliance with environmental regulations. Its authorization should therefore remain in force.

A federal court recently admitted Minera Cuzcatlán's legal proceeding to challenge and revoke SEMARNAT's decision to nullify the company’s EIA. In the coming weeks, the court is expected to rule on the granting of a permanent injunction, which would allow the company to operate until it has ruled on the revocation.

Minera Cuzcatlán emphasized that it is in compliance with all environmental regulations and continues to operate under the terms of the EIA. In addition, the company stated that it continues to work with host communities to expand the operation’s social benefits in the region.

The San José mine is located in the Taviche mining district of Oaxaca and has been producing since September 2011. In 2021, the mine produced 5.8 million oz of silver and 34,124 oz of gold, both within the expected production levels.

Why is SEMARNAT Re-evaluating Minera Cuzcatlán’s EIA?

On Jan. 2, 2023, Minera Cuzcatlán received a SEMARNAT resolution that canceled the extension of the former’s EIA. The ministry announced that a new analysis of the case will be carried out. SEMARNAT argued that the permit should be ruled invalid since it lacks the authority to grant an extension for more than half of the company's EIA extension request. What is more, SEMARNAT did not sufficiently analyze the company's regulatory compliance.

Jorge A. Ganoza, President and CEO, Fortuna Silver Mines, stressed earlier this month that it is “perplexing” that the company must challenge SEMARNAT's resolution since the authorization was confirmed by a court. Moreover, the company said that the cancellation is unfounded as the ministry does have the authority to grant EIA extensions for 12 years. In addition, the EIA extension granted in 2021 confirmed that the company's operations complied with regulations. 

“It is incomprehensible that we find ourselves again having to contest a controversial resolution issued by SEMARNAT. Minera Cuzcatlán is diligently working with the government authorities to resolve this matter and is concurrently pursuing all pertinent legal protection,” said Jorge A. Ganoza, President and CEO, Fortuna Silver Mines earlier this month.