US embassy cable - 05TEGUCIGALPA1967

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001967 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EMIN, EINV, ETRD, ECON, SENV, HO 
SUBJECT: U.S. Owned Firm Agregados Maya Claims Conspiracy 
Against Its Mining Operations 
 
 
1. (SBU) Summary: Citing intransigence and possible 
misconduct by Government of Honduras municipal, mining, and 
environmental officials, Agregados Maya, a construction 
aggregates (sand and gravel) mining company owned by 
American citizen Kevin Ericsson Yohn, claims they have been 
unable to protect their current mining concession, operate 
legally as a subcontractor, or secure new concessions in 
Honduras' Sula valley.  The company's primary complaint is 
that the District Attorney assigned to investigate reports 
of illegal mining operations by other companies on Agregados 
Maya's concession has failed to do his job, and that their 
complaints against him have gone unanswered in the 
prosecutor's office of the GOH Public Ministry.  The company 
also alleges possible misconduct in the local environmental 
regulator's refusal to issue environmental permits, which is 
preventing them from working as legal subcontractors or 
securing new concessions of their own.  Post has met with 
company officials and offered assistance in securing 
meetings and raising the issues with GOH officials, and is 
continuing to monitor the situation. End summary. 
 
2. (SBU) On July 21, Amcit Kevin Ericcson Yohn, his wife 
Dunia Alvarez, and their attorney Elio Viara met with CDA, 
ADCM, EconChief, and EconOff to discuss problems his 
construction aggregates mining company, Agregados Maya, has 
had in conducting business in the Sula Valley, in northern 
Honduras.  Mr. Yohn said that he and his wife, who owns a 
separate mining company called Materiales y Equipos, have 
filed for 27 aggregates mining concessions totaling 18,000 
hectares over the past three years, although at present they 
have only one concession (operated by Agregados Maya). 
Among a variety of complaints against GOH authorities, Mr. 
Yohn claims that he has received no help in his struggle 
against other mining companies that have illegally extracted 
sand and gravel from his concession.  According to Mr. Yohn, 
he has documented evidence of the illegal mining activities; 
however, although he has followed prescribed legal 
procedures in filing complaints against the offending 
companies, the matter has not been followed up by 
prosecutors in the GOH Public Ministry.  Mr. Yohn is seeking 
to have the District Attorney assigned to his case removed, 
due to his apparent resistance to pursuing Agregados Maya's 
charges.  The District Attorney in question, Juan Francisco 
Gonzales, is the sole prosecutor responsible for 
investigating and prosecuting all environmental complaints 
for San Pedro Sula and the surrounding area.  Although Mr. 
Yohn has filed official complaints against Gonzales for his 
inactivity, these too have gone unanswered. 
 
3. (SBU) Agregados Maya also claims to be the victim of 
irregularities with environmental licensing procedures 
within the GOH.  The company reports that local 
environmental authorities have told them to secure a 
separate environmental permit to operate as a subcontractor 
within another company's already licensed concession; this 
despite current mining regulations that allow subcontractors 
operating wholly within a previously licensed concession to 
be covered by that concession's environmental permit. 
Agregados Maya also claims that another of their 
environmental permit applications is being held up by the 
local environmental authority's requirement that they hire a 
specified company to conduct an environmental study of the 
proposed site at a set fee (280,000 lempiras, or 
approximately 15,500 USD).  Agregados Maya is balking at 
paying this price, which is significantly higher than other 
companies would charge.  A representative of the national 
mining authority DEFOMIN confirmed to EconOff that although 
permit applicants must conduct environmental impact studies, 
they are not required to use any one particular company to 
carry them out. (Note:  Such practices -- a regulator 
requiring that a particular contractor be used, which 
contractor then overbills and shares the proceeds with the 
regulator -- is a tactic that has reportedly been used in 
the past to create a paper trail for what is, in reality, a 
bribe. End note.) 
 
4. (SBU) Mr. Yohn believes that influential Hondurans -- 
including Arturo Kilgore, the brother of San Pedro Sula's 
mayor and owner of a heavy construction company, and Jorge 
Canahuati Larach, owner of the Honduran newspaper La Prensa 
-- are conspiring to prevent Agregados Maya from conducting 
business.  He attributes the conspiracy to the Hondurans' 
own mining and development interests in the area, and 
particularly to their desire to secure their own aggregate 
concessions to supply material for upcoming construction 
projects, including the Millennium Challenge Corporation's 
"Canal Seco" (a major highway expansion project from El 
Salvador to Honduras' Puerto Cortes).  As evidence of the 
conspiracy, Mr. Yohn cites the intensive barrage of negative 
publicity that was directed by La Prensa both at Agregados 
Maya and at Mr. Yohn personally in June and July 2005.  On 
an almost daily basis, national newspapers, and particularly 
La Prensa, featured full-page articles accusing Mr. Yohn of 
unsavory business practices, including the intention to 
obtain a monopoly on mining in the Sula Valley and to evict 
homeowners in order to mine beneath residential 
neighborhoods. (Comment: Press attacks during this time on 
Mr. Yohn were indeed severe and sensational in nature; 
however, there have been no further articles in the press 
since mid-July. End comment.) 
 
5. (SBU) Post has been in regular contact with Agregados 
Maya's attorneys concerning their complaints of unfair 
treatment, and has offered assistance in requesting 
meetings, but the company has preferred to work through 
their own contacts.  However, in the past week Agregados 
Maya attorney Elio Viara informed EconOff that although they 
had secured a verbal promise from the District Attorney's 
office to have a new prosecutor assigned to their case, no 
action has yet been taken.  The company then accepted 
EconOff's offer to meet with the District Attorney's office 
to discuss the case.  Post will report further as events 
warrant. 
 
Williard