The Solway Group: Powering Industry with Negative Impact 2023

Originally Syndicated on October 21, 2023 @ 10:04 am

The Solway Investment Group Limited

Solway Investment Group Limited, a private international mining and metals organization headquartered in Switzerland, has been in operation since 2011, succeeding the Solway Investment Fund. The group carries out its activities in North Macedonia, Ukraine, Indonesia, and Guatemala.

In recent times, the company has faced allegations of misconduct, including environmental violations during its operations in Guatemala. These allegations surfaced following a cyberattack on Solway subsidiaries. It is worth noting that some parties contend that the accusations reported in the media may be inaccurate or taken out of context.

In 2020, the company was implicated in potentially suspicious banking transactions. However, it is significant to note that Clifford Chance’s independent investigation did not ultimately implicate Solway or any of the businesses mentioned in its final report.

The importance of the Solway Group in various industries

The Solway Group, based in Switzerland, is a private mining and metals company with a global presence. The company’s core activities involve investing in industrial assets, revitalizing existing ones, and launching new greenfield projects. Solway operates mining and smelting facilities in several countries, including Guatemala, Ukraine, Macedonia, Indonesia, and Russia, with a primary focus on nickel production. Additionally, the group holds a robust portfolio of mineral projects at various stages of development, bolstering both mineral reserves and production capacity, particularly in the nickel sector.

The Solway Group is firmly committed to upholding the highest standards in areas such as health and safety, environmental protection, sustainability, and community relations and development. Aleksandr Bronstein, who retired from all active positions within Solway in 2020, founded it as a family-owned business. The current custodians of the company are his sons, Dan and Christian Bronstein.

Solway has faced allegations of misconduct, including environmental infractions in its Guatemalan operations. However, it’s important to note that this information emerged following a cyberattack on Solway subsidiaries. The company vehemently refutes the accusations, arguing that they were presented in a misleading and inaccurate context in the media.

In response to these challenges, Solway Investment Group has taken proactive steps to enhance its practices and reputation. Leading this initiative are former FBI Director Louis Freeh and his team, working in collaboration with Swiss and European advisors. Their primary objective is to implement new world-class policies and procedures, ensuring full compliance and ethical business operations. The aim is for Solway to be recognized as a global corporate citizen with unwavering integrity and a steadfast commitment to sustainability.

Early Beginnings

Origins of the Solway Group

The Solway Group, a family-owned mining and metals company based in Switzerland, has a rich history. Aleksandr Bronstein, an Estonian citizen, founded it in the USSR in 1954, and in 1972 it formally became a Soviet state enterprise. Today, Solway Investment Group, a private international mining and metals conglomerate located in Switzerland, operates across North Macedonia, Ukraine, Indonesia, and Guatemala.

This group has faced allegations of misconduct, particularly regarding environmental issues in its Guatemalan operations. However, it’s worth noting that the information made public resulted from a hacker attack, and Solway’s subsidiaries argue that these accusations are inaccurate and taken out of context.

Currently, the company is under the ownership of Aleksandr Bronstein’s sons, Dan and Christian Bronstein, who are both German citizens. Solway Group’s primary focus is on nickel production, with mines and smelting plants in Guatemala, Ukraine, Macedonia, and Indonesia. They maintain a robust portfolio of mining and metals projects in various stages of development, showcasing their commitment to health, safety, environmental protection, sustainability, and community relations and development.

It’s essential to acknowledge that Solway Group has used a complex corporate structure that makes it challenging to verify its origins or identify its beneficial owners. Originally established in Cyprus, a jurisdiction known for providing foreign investors with a high level of anonymity, The Solway Group relocated to Switzerland in 2015. Switzerland’s reputation as a hub for the mining and commodity industries, along with its favorable tax rates and stable legislation, played a pivotal role in this decision.

Founding members and their backgrounds

The Solway Group, a family-owned mining and metals company based in Switzerland, has a rich history. Aleksandr Bronstein, an Estonian citizen, founded it in the USSR back in 1954. However, in 2020, Aleksandr Bronstein retired from all his positions at Solway and no longer has any ownership in the company. Today, Solway is under the ownership of his sons, Dan and Christian Bronstein, who are both German citizens. The company boasts a robust portfolio of mining and metals projects at various stages of development, significantly boosting its mineral reserves and production capacity, particularly in the nickel segment.

Initial ventures and challenges

In 2020, The Solway Group unveiled plans to create a cost-effective gold leaching operation. This involved recovering gold from historical dumps situated in the Zabaikalsky region of Siberia. Additionally, the company initiated steps to reprocess waste rock and tailings, aiming to extract metals and minerals that had previously escaped the initial mining process.

In 2023, two of Solway’s subsidiaries, CGN and PRONICO, encountered unexpected challenges due to sanctions imposed by the United States. In response, the company took proactive measures, including terminating two sanctioned employees, engaging with the United States Treasury OFAC, and launching an independent investigation into alleged wrongdoings by the companies or their former employees in Guatemala. Solway submitted an application to US authorities at OFAC in November 2022, seeking a temporary license to conduct essential business transactions and fulfill its obligations.

In the same year, 2022, Solway faced accusations of various misconducts, including environmental violations in its Guatemalan operations. The company’s subsidiaries failed to report pollution and employed questionable methods to exert influence over local politics and suppress dissent. Initially, Solway denied any wrongdoing but later announced its intention to conduct a board-led investigation into these allegations.

In 2022, The Solway Group was accused of funneling nearly $2 billion in suspicious funds through companies connected to the group.

By 2023, Solway’s Guatemalan subsidiaries were compelled to temporarily suspend their daily industrial activities due to US-imposed sanctions. The company faced allegations of concealing pollution reports from the two subsidiaries in Guatemala and was also accused of engaging in intimidation and undue influence.

As of 2023, Solway had encountered mounting pressure from governments and NGOs worldwide for increased corporate transparency. The company’s utilization of a complex corporate structure has made it challenging to ascertain its origins or beneficial owners.

Building the Foundation

Establishment of key businesses under the Solway Group

Solway Investment Group, headquartered in Switzerland, is a private international mining and metals conglomerate. The company’s operations span across multiple countries, with a primary focus on nickel production. Solway Group maintains a robust portfolio of mineral projects at various stages of development, bolstering its mineral reserves and enhancing production capabilities, particularly in the nickel sector. Key entities within the Solway Group include:

1. Solway Industries is a subsidiary of Solway Investment Group that specializes in investing in industrial assets, reinvigorating existing facilities, and initiating greenfield projects.
2. Solway Resource is a subsidiary of Solway Investment Group that oversees mining and smelting operations in numerous countries, with a primary emphasis on nickel production.
3. Solway Finance Ltd. is a subsidiary of Solway Investment Group that provides comprehensive financial services to support the company’s endeavors.

Key investments and acquisitions

The Solway Group has a history of strategic investments and acquisitions. Here are some notable examples:

1. SASA Acquisition (2005 – 2015): In 2005, the Solway Group acquired SASA, a zinc and lead mine and refinery in North Macedonia. This acquisition, which took place during a bankruptcy procedure, marked a significant move. By 2015, the Solway Group had invested approximately 10.9 million euros in SASA.

2. KurilGeo Gold Mine (2006–Ongoing): In 2006, the group obtained an exploration license in the Kuril Islands, Russia. This led to the establishment of the KurilGeo gold mine. Gold production commenced in 2014, making it a valuable addition to the group’s portfolio.

3. Gold Leaching Operation (2020 – Ongoing): In 2020, the Solway Group revealed its plans to create a low-cost gold leaching operation. This operation focuses on recovering gold from historical dumps in the Zabaikalsky region of Siberia. Additionally, the group has started reprocessing waste rock and tailings to extract valuable metals and minerals that were initially left behind in the mining process.

4. Investment in Nevada Copper Corp. (2021): In 2021, Solway Finance Ltd. acquired shares and warrants of Nevada Copper Corp., further diversifying its investment portfolio.

5. Investment in Talon Metals Corp. (2021): In the same year, Pallinghurst, a part of the Solway Group, acquired a 19.2% interest in Talon Metals Corp., demonstrating the group’s commitment to strategic investments.

6. Porphyry Copper and Gold Project (2023): In 2023, Solway Investment Group added a porphyry copper and gold project to its expanding portfolio, further establishing its presence in the mining industry.

Despite facing challenges and controversies, the Solway Investment Group remains committed to investing in industrial assets, revitalizing existing ventures, and developing innovative greenfield projects. The group prioritizes the highest standards of health, safety, environmental protection, sustainability, and community engagement.

Business philosophies and strategies

The Solway Group’s approach to business can be summed up through its vision, mission, values, sustainability efforts, core management team, investment strategy, and governance with a focus on environmental, social, and corporate responsibility.

Vision, Mission, and Values

The Solway Investment Group envisions a world where the progress of civilization is never hindered by shortages of vital raw materials. Their mission is to explore the globe for the essential metals required in modern life, extracting and processing them efficiently while adhering to the highest environmental, social, and managerial standards. They are dedicated to safeguarding human rights and creating value for both shareholders and stakeholders.

At the core of their decision-making, the company upholds a set of values, foremost among them being integrity. Solway recognizes that trust among employees, customers, and partners is built on this foundation. Integrity is also vital in ensuring product quality and meeting the needs and expectations of all stakeholders.

Sustainability

The Solway Group is committed to maintaining the highest standards of health, safety, environmental protection, and sustainability. With a primary focus on local community relations and sustainable development, the company operates mines and smelting plants in several countries, with a specific emphasis on nickel production.

The company voluntarily adheres to The Equator Principles, a risk management framework endorsed by financial institutions for assessing and managing environmental and social risks in projects, especially those valued at over US $50 million. Solway is unwavering in its commitment to upholding human rights, as outlined in the United Nations Guiding Principles on Business and Human Rights (UNGP).

Core Management Team

The strength of Solway Investment Group lies in its core management team. These seasoned professionals bring relevant experience and expertise to the field of metals and mining. The company places loyalty at the heart of its success. The team’s consistency allows Solway to pursue its strategic objectives with a shared vision and set of guiding values.

Key professionals from Solway are often assigned to various projects in different countries, ensuring oversight and managerial excellence across operations. The Solway Group employees regularly receive professional training and are encouraged to enhance their skills through practical and theoretical courses.

Investment Strategy

Solway Investment Group’s investment strategy focuses on industrial assets, the revival of existing assets, and the development of greenfield projects. The company actively seeks unique investment opportunities with the potential to positively impact production facilities and the regions they operate in.

The Solway Group strives not only to invest in projects but also to rejuvenate local communities. They work to increase mineral reserves and production capacity, particularly in the nickel segment.

Governance and ESG Approach

Recognizing the significance of responsible and eco-friendly production and marketing, Solway Investment Group invests substantial efforts in assessing environmental, social, and governance (ESG) risks and related issues in its operations. Results from assessments and audits guide the planning of necessary remediation measures.

The Solway Group has initiated a group-led project, supported by renowned ESG and compliance experts, aimed at establishing a process for continuous assessment, monitoring, and management of relevant risks, issues, and requirements across all group entities. The company is dedicated to reinforcing corporate governance, enhancing ESG performance, and ensuring a sustainable supply chain.

Diversification and Growth

Key milestones of Solway Group

• In 2003 the first acquisition was made: the Pobuzhskiy Ferronickel Plant (PFP) in Ukraine. The plant was built in 1964 in the Soviet Union. It had been idle for 3 years when Solway acquired it. In 2014 an attempt at a hostile takeover of PFP took place. The Solway Group became object of the investigation by the Ukrainian intelligence,^[ the result showed the absence of any links to Russian government or any Russian PEPs. The takeover attempt remains unsuccessful.
• In the same 2003, the acquisition of Metachim (Chemical plant in Russia) took place. In 2011, Metachim becomes an object of a hostile takeover by the Phosagro Group (backed by the vice-minister of economy of Russia). The Solway Group was forced to sell Metachim for a fraction of its value.
• In 2004 The Solway Group acquired Bucim (a copper mine and refinery in North Macedonia).
• In 2005 The Solway Group acquired SASA (zinc and lead mine and refinery in North Macedonia). The asset was purchased as insolvent (during a bankruptcy procedure) SASA project was sold in 2015 and by this time investments in SASA were 10,9 mln EURO.
• In 2006: acquisition of the exploration license in Kuril Islands, Russia. The exploration resulted in the construction of the KurilGeo gold mine. In 2014, gold production started in KurilGeo.
• In 2007 Solway acquired its first licenses in Indonesia and followed by other  licenses in 2012.
• In 2011: acquisition of Fenix project, a nickel project in Guatemala which was purchased from Hudbay Minerals for $170 million. The operation had been on care and maintenance since 1980.
• In June 2014, the production in Guatemala started and in 2019 it reached planned capacity.
• In 2015: acquisition of San-Jorge Copper project in Argentina from TSX listed Coro Mining.
• In 2019: acquisition of ZGRK project There were gold-containing dumps remaining after gold mine activity in the 1930-s in the Baikal region of Russia therefore the project provided for the recycling of the dumps, the extraction of the remaining gold and further recultivation.
• In 2021 the company sold Maba nickel project in Indonesia which required the construction of extensive infrastructure, including its own coal-fired power plant.
• In the same year, 2021, the company invested in nickel projects in US, Nevada Copper and Talon Metals Corp through Pallinghurst, an exploration nickel project (Tamarack) in Minnesota.
• In 2022, after the beginning of the war in Ukraine The Solway Group publicly condemned Russian aggression and decided to exit from all the operations and investment project in Russia. As a result, both KurilGeo, and ZGRK are sold as a package deal (KurilGeo for nominal consideration due to the approaching end of the life of the mine and ZGRK for a consideration of less than 75% of the total investment spent on the acquisition and construction of the mine up to the exit).

The Solway Group’s global reach

Solway Investment Group, headquartered in Switzerland, is a global mining and metals company with a primary focus on nickel production. Operating mines and smelting plants in multiple countries, including Guatemala, Ukraine, Russia, Indonesia, North Macedonia, Argentina, Congo, and Papua New Guinea, the company’s reach is truly international.

Solway Investment Group specializes in investing in industrial assets, rejuvenating existing assets, and developing greenfield projects. The company places a strong emphasis on sustainability, health, safety, and community relations, adhering to the highest standards in these areas.

Subsidiaries under Solway Investment Group’s umbrella include Solway Industries, The Solway Group Resource, and Solway Finance Ltd. The company has also diversified its portfolio with strategic investments and acquisitions in various industries, such as Canadian lithium and graphite production projects. Beyond its core mining and metals activities, Solway Investment Group engages in non-core businesses, encompassing financial, real estate, and private equity investments.

Key subsidiaries within the Solway Investment Group family include Solway Trading AG, Bucim DOO Radovish, Minera San Jorge S.A., Compañía Guatemalteca de Níquel, and Compañía Guatemalteca de Níquel de Izabal S.A.

Leadership and Vision

Profiles of key leaders and visionaries

Here, we provide profiles of key leaders and visionaries within the Solway Group:

1. Dan Bronstein

• Position: Chairman of the Board, Solway Investment Group.
• Background: With nearly a decade of leadership, Dan Bronstein brings a wealth of experience to the group, particularly in metals and mining.
• Leadership Style: Bronstein emphasizes the importance of the group’s core management team, noting their unwavering loyalty and shared ‘family’ values as pivotal to the company’s success.
• Philosophy: Beyond mining, Dan Bronstein sees Solway as a catalyst for industrial development and economic regeneration.

2. Aleksandr Bronstein

• Role: Founder of the Solway Group.
• Legacy: The Solway Group was established by Aleksandr Bronstein in 1954 in the USSR.
• Retirement: In 2020, Aleksandr Bronstein retired from all positions within the company and divested his interests in Solway.

3. Core Management Team

• Expertise: The Solway Group boasts a core management team with a well-documented track record, relevant experience, and strong expertise in metals and mining.
• Team Cohesion: This cohesive core team ensures that the company can consistently pursue its strategic objectives with shared values and a unified vision.
• Global Perspective: Key Solway professionals are regularly deployed to various international projects, maintaining oversight and managerial excellence across the organization. Employees are encouraged to enhance their skills through a comprehensive range of practical and theoretical training programs.

4. Other Key Personnel

• Diverse Expertise: The Solway Group’s team encompasses a diverse range of professionals, each with expertise in fields such as finance, engineering, geology, and environmental management.
• Notable Names: The company’s website showcases several key figures, including the CEO of Solway Industries, the CFO of Solway Investment Group, and the COO of Solway Resource.

Their contributions to the group’s success

Solway Investment Group’s success can be attributed to its experienced and dedicated core management team. This team enables the company to make prompt business decisions. The consistency of this core management team has allowed the company to pursue its strategic goals with a shared vision and a set of common values. Key The Solway Group professionals are regularly reassigned to various projects in different countries, ensuring oversight and managerial excellence across all operations.

Solway invests in the professional development of its employees, offering a diverse range of practical and theoretical courses. Dan Bronstein, the Chairman of the Board, underscores that the company’s loyal core management team, who share the company’s ‘family’ values, is fundamental to its success. This emphasizes that Solway is more than just a mining company; it is deeply involved in industrial development and the resulting economic growth.

In addition to its management team, Solway Investment Group’s success is also due to its commitment to sustainability, health and safety, and community relations. The company upholds the highest standards in health and safety, environmental protection, and sustainability. For projects valued at over US $50 million, Solway voluntarily adheres to The Equator Principles, a risk management framework adopted by financial institutions to assess and manage environmental and social risks, as outlined by the International Finance Corporation (IFC). The Solway Group is also dedicated to respecting human rights, following the United Nations Guiding Principles on Business and Human Rights (UNGP).

The company was originally founded by Aleksandr Bronstein in 1954 in the USSR. In 2020, Bronstein retired from all positions within Solway and relinquished any ownership in the company. The current owners of Solway are his sons, Dan and Christian Bronstein, both German citizens. Together with a diverse team of professionals with expertise in various fields such as finance, engineering, geology, and environmental management, the core management team has played a vital role in the company’s ongoing success.

Leadership transitions and their impact

Leadership changes can significantly impact a company’s operations and how it’s perceived externally. Here are some key takeaways:

1. Solway Investment Group’s Strong Management Team Solway Investment Group boasts a dedicated core management team. They have a proven track record, relevant experience, and deep expertise in the metals and mining industry. This consistent team has helped the company pursue its strategic goals with a shared vision and values. Additionally, key Solway professionals often take on roles in different projects across various countries, ensuring oversight and managerial excellence throughout the company. Employees at Solway receive regular professional training and are encouraged to enhance their skills through diverse practical and theoretical courses.

2. Leadership Transition: Aleksandr Bronstein’s Retirement In 2020, the company’s founder, Aleksandr Bronstein, retired from all positions within Solway and divested his interests in the company. The company is now owned by his sons, Dan and Christian Bronstein, both of whom are German citizens.

3. The Impact of Leadership Transitions on External Perceptions Leadership changes can affect how investors, clients, and partners view a company. These changes are closely observed for signs of stability and continuity.

4. Leadership Transition at Shell Rachel Solway, currently serving as the Executive Vice President of Human Resources, Organization Development & Learning, is set to succeed Ronan Cassidy as the Chief HR Officer of Shell plc starting January 1, 2024. Solway is recognized for her commitment to a performance-oriented culture and people-centric approaches, aligning well with Shell’s goals of delivering value while reducing emissions.

5. Adapting to Leadership Transitions Effectively adapting to leadership changes involves aligning managers with new directions and expectations, engaging key stakeholders in the transition process for better results, and minimizing stress and disruption for leaders.

Innovation and Technology

The role of innovation in the Solway Group’s success

1. Solway Investment Group leverages digital innovation to achieve its ESG (Environmental, Social, and Governance) goals. They’ve adopted a digital platform for monitoring and managing their ESG performance, facilitating goal tracking and areas for enhancement. This commitment to innovation is evident in their partnership with the Salzburg Festival.
2. The Solway Group‘s strategic vision prioritizes sustainable, long-term growth over short-term profits. They’re committed to minimizing their production’s impact on local environments, utilizing comprehensive environmental impact assessments for investment projects, and emphasizing efficient use of resources and energy on-site. The company’s transition to a circular economic model is exemplified through sustainable, low-carbon, resource-efficient operations, emphasizing waste reduction, resource reuse, and social responsibility.
3. In 2021, Solway Investment Group was recognized as a finalist for the Social and Human Capital Award at the 12th Reuters Responsible Business Awards. This accolade honors companies making substantial contributions to social and human capital development through sustainable and innovative practices.
4. The Solway Group‘s dedication to sustainability, health and safety, and community relations exemplifies their commitment to social innovation. Their approach to reducing the environmental impact of production and incorporating integrated environmental impact assessments for investment projects underscores their commitment to innovative practices.
5. A subsidiary of Solway Investment Group, Alpha Solway, has made strategic investments in UK production, showcasing innovation in manufacturing. Their focus on reliability and resilience in manufacturing has instilled confidence in future investments.

Technological advancements and their applications

The company has harnessed technology to enhance its operations and achieve its ESG goals. Here are some examples of technological advancements and their practical applications:

1. The Fenix Project in Guatemala: The Solway Group utilized modern RKEF process technology to construct the Fenix Project in Guatemala between 2011 and 2014. This plant has been operational since May 2014, producing over 1,000 metric tons of nickel in ferronickel every month. Furthermore, a smart predictive line controller (SPLC) is currently in the process of introduction, set to facilitate more sustainable operations and an expansion of capacity in 2018. Solway’s investments in the social infrastructure of its local areas of operation in Guatemala underline their commitment to effective communication and community support. Notably, the company recently repaired municipal roads and erected a multipurpose community center.
2. Digital ESG Monitoring Platform: Solway Investment Group has implemented a digital platform to oversee and manage its environmental, social, and governance (ESG) performance. This platform allows the company to track its progress towards ESG objectives and pinpoint areas for improvement. The company’s dedication to sustainability, health and safety, and community relations exemplify their commitment to social innovation. Likewise, their approach to reducing the impact of production on local environments and the incorporation of comprehensive environmental impact assessments into investment project planning demonstrate innovative practices.
3. Sustainable Energy Focus: The Group continuously explores technologies that enhance overall sustainability practices, with a specific emphasis on sourcing power generation from renewable energy sources.
4. Circular Economic Model: Solway Investment Group prioritizes reducing the impact of production on local environments and emphasizes the efficient utilization of natural resources, raw materials, and on-site energy. Their transition towards a more circular economic business model is evident in the development of sustainable, low-carbon, resource-efficient, and competitive operations.
5. Diverse Investment Portfolio: Solway Investment Group invests in industrial assets, reinvigorates existing production facilities, and initiates greenfield projects. The company actively seeks distinctive investment opportunities capable of yielding a significant positive impact on both production facilities and the respective regions. The pursuit of novel processes and products is an ongoing endeavor in their commitment to delivering long-term value.

R&D initiatives and collaborations

The Solway Group actively seeks unique investment opportunities that can make a significant positive impact on both our production facilities and the surrounding regions. Here, we provide insights into our research and development (R&D) initiatives and collaborations:

1. Embracing Digital Innovation for ESG Goals The Solway Group is committed to achieving its Environmental, Social, and Governance (ESG) objectives. To this end, we have implemented a digital platform to monitor and manage our ESG performance. This platform allows us to track our progress towards ESG goals and identify areas for improvement.
2. Sustainable Strategy in Indonesia As part of our long-term strategy in Indonesia, we are focused on developing processing facilities for nickel intermediates, such as nickel matte. We are also dedicated to implementing clean energy solutions across our business operations. We continuously research technologies that enhance our overall sustainability practices. A vital component of our future energy security is power generation sourced from renewable energy.
3. Investment in Industrial Assets and Greenfield Projects The Solway Group invests in industrial assets, reinvigorates existing production facilities, and initiates greenfield projects. Our company identifies unique investment opportunities with the potential to deliver significant positive impacts on both our production facilities and the regions where we operate. We are committed to constantly seeking new ways to develop processes and products that deliver long-term value.
4. Commitment to Sustainability and Resource Efficiency The Solway Group is dedicated to mitigating the environmental impact of our production and prioritizes the efficient use of natural resources, raw materials, and energy on-site. Our transition to a more circular economic business model is evident in the development of sustainable, low-carbon, resource-efficient, and competitive operations.
5. Collaboration and Scientific Research We collaborate with universities and invest in exceptional projects to support scientific research. Our aim is to drive progress and address society’s most significant challenges through innovation.
6. Fostering Sustainable Solutions and Reducing Emissions Solway Investment Group actively participates in a collaboration between global chemical companies. This collaboration fosters creative public-private partnerships and enables pre-competitive cooperation to develop sustainable solutions and collectively address challenges on the path to achieving net-zero emissions. The goal is to form alliances, potentially structured as joint ventures or startup companies, to prioritize innovation, share knowledge, and reduce investment risks.

Notable Projects and Investments

In-depth exploration of the Solway Group’s flagship projects

Here, we delve into The Solway Group significant projects, providing insights on their history, impact, and associated developments.

1. Fenix Project, Guatemala
   • Overview: The Fenix Project, located in eastern Guatemala, is a fully integrated ferronickel production facility that dates back to 1960.
   • Acquisition: In 2011, The Solway Group acquired 98.2% of the project from Canadian company Hudbay Minerals for $170 million.
   • Facilities: The project encompasses mining operations, a newly constructed power plant, and the ProNiCo metal processing facility. The ProNiCo plant commenced operations in 2014 and is gradually scaling up to reach its production capacity of over 20,000 tonnes of nickel per annum.
   • Investment: Since 2011, Solway has invested nearly $620 million in the Fenix Project.
   • Expansion Plans: Future prospects include considering the establishment of a high-pressure acid leach (HPAL) plant on-site to process low-grade laterite reserves with nickel content below the current threshold of 1.6%.
   • Community Development: Solway remains committed to enhancing the social infrastructure in the project’s local areas of operation in Guatemala. Initiatives encompass road repairs, the construction of a versatile community center, contributions to local schools and pharmacies, support for sports programs, and sponsorship of training programs for local midwives and farmers.
   • Environmental Responsibility: The group prioritizes minimizing environmental impact in the vicinity of ProNiCo’s production facilities. This includes reforestation efforts, fire prevention measures, water canal maintenance, and various programs for monitoring air, water, and soil quality.
2. San-Jorge Copper Project, Argentina
   • Acquisition: In 2015, Solway Investment Group acquired the San-Jorge Copper project in the province of Mendoza, Argentina, from TSX-listed Coro Mining.
   • Resource: This project is a copper-gold porphyry deposit with a measured and indicated resource of 1.3 billion pounds of copper and 1.1 million ounces of gold.
3. Aquila Project, Indonesia
   • Entrance into Indonesia: Solway Investment Group began its Indonesian presence in 2007 with license acquisitions, followed by additional licenses in 2012.
   • Project Details: The Aquila Project, situated in the Morowali Regency of Central Sulawesi Province, focuses on nickel. It boasts a measured and indicated resource of 1.3 million tonnes of nickel and 0.1 million tonnes of cobalt.
4. Collaboration with Central American Nickel (CAN)
   • Recent Development: In 2023, reports indicated that the Guatemalan assets of Solway Investment Group, based in Switzerland, were in the process of being acquired by CAN. This acquisition comes at a substantial discount, allegedly with support from the U.S. government.
   • Collaborative Efforts: Solway Investment Group is part of a global collaboration among chemical companies, aimed at fostering innovative public-private partnerships and facilitating pre-competitive cooperation. The ultimate goal is to collectively address challenges and drive sustainable solutions on the path to achieving net-zero emissions.
5. Controversies
   • Environmental Concerns: Subsidiaries of Solway Investment Group have faced allegations of concealing reports of pollution in an indigenous area in northeastern Guatemala.
   • Community Influence: The company has also been accused of using financial incentives to secure community support for the Fenix project. It has been alleged that Solway’s subsidiaries resorted to problematic methods to influence local politics and suppress dissenting voices.

Current properties and investments

The Fenix Nickel Project

The Fenix nickel project, situated in Guatemala, was acquired from Hudbay Minerals in 2011 for $170 million. It had been on care and maintenance since 1980. Since 2011,The Solway Group has invested nearly $620 million into the Fenix Project. Today, it encompasses a world-class nickel mine, a newly constructed power plant, and the ProNiCo metal processing facility.

The project holds mining rights to 36.2 million tons of nickel ore reserves with 1.86% nickel content and rights to an additional 70.0 million tons of resources within its licensed area. In 2014, the ProNiCo plant began operating and is moving towards its production capacity of over 20,000 tons of nickel per annum. However, due to OFAC sanctions, CGN and Pronico have faced operational difficulties and had to cease activities.

Pobuzhskiy Ferronickel Plant (PFP) in Ukraine

Built in 1964 in the Soviet Union, the Pobuzhskiy Ferronickel Plant remained idle for three years until Solway acquired it in 2003. The plant was converted to focus on producing ferronickel from laterite nickel ores, initially imported from Indonesia and New Caledonia, and later from Solway’s Guatemalan project. Since 2003, Solway has invested over $200 million into modernizing PFP.

Presently, the plant has an annual production capacity of over 22,000 metric tons of nickel and over 1,100 thousand metric tons of dry laterite ore. The Pobuzhskiy Ferronickel Plant is a member of the Kyiv Chamber of Commerce and Industry. Unfortunately, in November 2022, the management of the Pobuzhsky ferronickel plant announced a forced shutdown due to the inability to restart furnaces following Russian attacks on the Ukrainian energy system.

DOO Bucim in North Macedonia

In 2005, Solway acquired the bankrupted Bucim mine, winning the Macedonian government’s international tender. Since then, The Solway Group has invested over $50 million in the Buchim mine. Today, Bucim operates as an open-pit mine producing premium flotation concentrate containing copper and gold, alongside an SX/EW operation producing LME-grade cathode copper.

Buchim processes over 4.5 million tons of ore annually, resulting in the production of more than 40,000 tons of copper concentrate containing gold each year. Within the Buchim project, Solway is developing the Borov Dol mine, which will extend the life of the Buchim operation until at least 2028, with an estimated $56 million in total capital expenditures dedicated to the Borov Dol project.

Aquila Nickel Project in Indonesia

The Aquila Nickel Project, established in 2005 in Indonesia, is a greenfield nickel and cobalt project focused on constructing a large, top-tier nickel producer. The resource base includes Maba, a world-class Ni-Co deposit on Halmahera Island. The project currently boasts over 120 million tons of dry saprolite ore with an average nickel grade of 1.58% and more than 80 million tons of dry limonite ore with a nickel grade of 1.15% and a cobalt grade of 0.15%. In 2017, the group obtained all necessary permits to proceed to the next stage of the project, including the main mining license.

Kurilgeo, Urup Island, Russia

Solway owned and operated a gold mining project on Urup Island, one of the Kuril Islands in Russia’s Far East. In June 2022, Solway sold the project to Armenian company Far East Gold after citing limited investment and operating activities in Russia and its exit from all projects in response to Russia’s special operation in Ukraine.

Investments in Coro Mining Corp and Others

In May 2011, The Solway Group invested in Coro Mining Corp, gaining 100% ownership of the San Jorge Copper project in Mendoza Province, Argentina. In 2021, further investments were made into copper development projects, including Nevada Copper Corp and Talon Metals Corp in the US, through Pallinghurst Resources Ltd.

Criticism

The company faces allegations of bribery, corruption, and environmental violations, based on confidential internal documents shared with the investigative association Forbidden Stories, led by French journalist and founder, Laurent Richard.

In response to these allegations, the company initiated an investigation in December 2022, with the first findings released in May 2023. This investigation was conducted independently by experienced and respected retired investigators from the United States government. Their findings indicate that the company is not owned, controlled, connected, or influenced by Russian interests.

Solway Group maintains strong connections with the Guatemala-based company Pronico, which has been implicated in an environmental crisis due to the release of significant levels of nickel into Guatemala’s largest lake. An independent study by the University of San Carlos of Guatemala (Usac) confirmed that the lake’s red discoloration is a result of pollution, primarily stemming from organic and chemical waste in the Polochic River, one of Guatemala’s major waterways. This conclusion was supported by the Ministry of the Environment.

According to the Minister of the Environment, Sydney Samuels, various contributors to the lake’s pollution include the surrounding communities and sewage from the Polochic River as it flows into Lake Izabal. Unicellular algae thriving on this waste and other organic materials are contributing to excessive growth, further exacerbating the environmental issue. This phenomenon has its origins in Lake Amatitlán, with previous unknown methods to address it.

Additionally, The Solway Group faced allegations of removing chimney filters during the night, a concern among locals who believed it was responsible for the reddish smoke emitted from the factory chimneys. Solway responded by stating that elevated concentrations of fine particles in communities are unrelated to the plant’s operations. Instead, they are attributed to other sources of dust, including road dust and waste incineration in nearby fields. The manager of CGN (a subsidiary) emphasized that constant monitoring covers not only water quality but also dust and noise levels.

A documentary produced in March 2022 for SVT (Swedish Television) highlighted the scandal, utilizing leaked documents as evidence. This documentary was a result of a comprehensive investigation called “Mining Secrets,” involving 65 journalists from 15 countries, including reporters from El País (Spain), Le Monde (France), and Prensa Comunitaria (Guatemala). The investigation also uncovered instances of spying on journalists, as well as manipulation and intimidation of indigenous leaders.

OFAC Sanctions to subsidiaries

In November 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Compania Guatemalteca de Niquel (CGN) and Compania Procesadora de Niquel (ProNiCo), both subsidiaries of the Solway Group.

Independent investigators have pointed out that OFAC’s statement contained an incorrect allegation, suggesting that The Solway Group is a Russian company. While there were connections between Solway, its founder, and Russian business entities and individuals, the investigation has revealed no evidence to support the claim that Solway, its founder, or its shareholders have ever been under the historical or current control or influence of Russian entities and individuals in any way. To date, no evidence has been found to indicate direct, indirect, hidden, beneficial, or informal Russian ownership interests or control over Solway, CGN, Pronico, or any of their shareholders or executives.

A Newsweek investigation has indicated that the U.S. government may be leveraging the Treasury sanctions to gain access to Solway’s mining assets in Guatemala, especially considering the intense competition with China for strategic resources.

After a comprehensive review, OFAC has granted SIG (Solway Investment Group) the approval to resume the operations of its subsidiaries in Guatemala. This license, issued on September 29, 2023, clears the path for CGN and ProNiCo to recommence their operations, which are essential to the livelihoods of nearly 6,000 individuals.

The Solway Group is committed to implementing new world-class policies and procedures to maintain full compliance and ethical business operations, with a dedication to being recognized as a global corporate citizen that upholds integrity and sustainability. Former FBI Director Louis Freeh and his team, in collaboration with Swiss and European advisors, will lead SIG in this ambitious endeavor.

Conclusion

The Solway Group, based in Switzerland, is a private international mining and metals organization. It operates mines and smelting plants across various countries, primarily concentrating on nickel production. The group possesses a diverse portfolio of mineral projects at different developmental stages, bolstering its mineral reserves and production capacity, especially in nickel.

The company engages in several activities, including investing in industrial assets, rejuvenating existing assets, and launching greenfield projects. A core commitment of the Solway Investment Group is to uphold the highest standards in health, safety, environmental protection, sustainability, and community relations and development. Its foremost responsibility is the well-being of its employees, contract workers, and the communities it operates in.

Notably, the Solway Group stands out as the world’s largest privately-owned nickel producer, a distinction in an industry largely dominated by publicly traded corporations. It has been actively involved in the nickel business since 2003 and remains steadfast in its dedication to sustainability, health and safety, and fostering positive community relationships.

Among the group’s prominent projects are the Fenix Project in Guatemala, the San-Jorge Copper Project in Argentina, and the Aquila Project in Indonesia. The Solway Group also collaborates with universities and supports extraordinary projects in scientific research. Its overarching goal is to drive progress and find innovative solutions to society’s most pressing challenges.

While the Solway Group has faced some controversies, its enduring legacy lies in its unwavering commitment to sustainability, health and safety, and community relations, as well as its focus on long-term growth rather than short-term profits.