After the Guatemalan Nickel Company (CGN) and the Izabal Nickel Processing Company (Pronico) were sanctioned by the Office of Foreign Assets Control (OFAC), of the United States Department of the Treasury, at the end of 2022, the companies went through a process to they will lift those sanctionsin addition to a subsequent restructuring of corporate governance that includes the registration of its new headquarters as a company in that country.
The previous parent company was the Solway Investment GmbH group, based in Switzerland. In 2024, Fenix Nickel Company LLC was created, registered in New York, United States, which became the new parent company of the companies in Guatemala, as part of the new supervision and compliance scheme under international standards.
CGN adopted the name Fenix Minerales, SA, and is responsible for the license for the Minera Fénix extraction project, in Izabal; and Pronico became Fenix Metales, SA. Both companies operate under the Fenix Nickel brand.
The corporate structure linked to the project was established under the aforementioned entity registered in New York as part of the process of corporate transformation and strengthening of international governance, explained the president of Fenix Nickel in Guatemala and member of the board of directors of the parent company in the United States, Marco Aceituno.
The executive explained that it is not only about reactivating operations, but he calls it a new beginning, indicating that it is guided by a structural transformation of the project management and supervision model.
Aceituno said that for this they established four pillars, among them corporate governance.
Regarding governance, they report that the parent company now operates under US laws and regulations. Additionally, a directory was created or boardswhich runs said parent company in the United States and is made up of five people, of which two are independent directors and three are executive directors.
Among the independent directors is Luis E. Arreaga, diplomat and specialist in governance and international relations, with more than 30 years of experience in institutional development and regional cooperation, the company indicated. He is of Guatemalan origin and was the United States ambassador to Guatemala for several years.
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Jessica Bedoya is also an independent director, an international expert in investment, development and geopolitics for Latin America, with extensive experience in strategic financing and public-private alliances, according to company data.
Meanwhile, the three executive directors are Marco Aceituno and Denys Shevchenko, who are, respectively, the president and director of operations of the companies in Guatemala, as well as Denis Gerasev, a specialist in corporate governance, legal strategy and compliance.
Change operating model
When consulted, Arreaga said that in many corporate structures there is a board of directors and in some cases it is decided to invite independent directors. He said that he was contacted about various issues, such as compliance, anti-corruption policies, work with communities and respect for human rights, which he has handled at some point from another perspective.
He explained that after long conversations with the company he feels comfortable, because he observes commitment on its part in the aforementioned issues.
In addition, he pointed out that the company has had monitoring that it considers very important, from an independent company called AlixPartners LLP, which Reported directly to the Treasury Department and followed up on the commitments that Fénix had made with said US authorities to begin operating in Guatemala as a North American company. He added that this aspect has generated confidence in him, in addition to the fact that they also hired several companies specialized in human rights, social impact and the environment.
“Having these independent bodies there, I already felt comfortable being able to help them and try to guide their policies in the context of Guatemala,” he expressed.
Regarding the sanction that the companies had in 2022, he said that it seems important to participate from the point of view that it is a company that had difficulties, but that, as a result, decided to transform and adopt an operating model that could become a benchmark for other mining operations in the region, since they aspire to that.
However, he also said he is aware that it will be a difficult day, because the company operated in a way five years ago and changing that entire corporate culture will take time. He pointed out that they may face setbacks and errors, and that to avoid their repetition, transparency systems and mechanisms must be established, as well as channels so that people can file complaints without fear. He added that a more transparent management system is required, especially in relations with communities, in addition to alliances with local economic actors to generate employment in other activities.
Asked if the new headquarters in the United States can generate greater confidence in the Treasury Department, he expressed that, from his personal point of view, “the fact that the company is subject to North American laws gives me confidence” and that this should be considered an important pillar for the future of the company, because North American companies must comply with laws that do not allow illegal actions, such as the anti-bribery law.
Arreaga said that the function of a board of directors is to hold the company accountable for its strategies and how it is operating. He said that the company has its owners, but that they decided to separate themselves from daily management and do so through a corporate governance structure where there is accountability and under a scheme of high international standards of corporate management, which he considers a key contribution.
Separately, when asked if there was a change of owners with these new companies and the restructuring created, Aceituno, current president of Fenix Nickel in Guatemala, indicated that the owners did not change. He assured that they have never had Russian investors, but that confusion arose because at some point there were Russian operators, although they were not the owners of the company based in Switzerland, whose owners are German and Swiss nationals. He added that they wanted to position the idea that it was a Russian company, but it never was and it was demonstrated to the United States government that there was no connection or link.
The four pillars
Aceituno announced that within the transformation they have established four pillars to develop their activities.
Among these he mentions that of communities as the first pillarwhich seeks to improve the relationship with the communities to avoid conflicts, blockades and other problems. For this purpose, the American company Perseus Strategies was hired, led by international human rights lawyer Jared Genser, which develops the independent human rights evaluation process of the project. A Social Impact Study is also carried out by CentraRSE / Smart Company.
The second pillar is the environmental one. For this, the American company Tetra Tech was hired, which develops an independent environmental review and operational preparation process prior to the restart.
The third pillar is governance, already explained. To this end, the firm AlixPartners LLP was in charge of the governance and compliance review process, led by former FBI director Louis Freeh, who participated as an independent supervisor of the corporate transformation process.
The fourth pillar is development in the area of El Estor, which also involves the workplace. The company has 1,400 direct employees, of which more than 80% are from local populations.