Crucitas Mine, Legal Uncertainty and Foreign Investment

A 15-year, $127 million investment was suddenly halted by a court canceling a mining concession to Industrias Infinito in Costa Rica.

Friday, November 26, 2010


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On Wednesday a court ruled that there were irregularities in the issuance of permits awarded to the Canadian mining company for exploiting a gold mine, and decided to annul the concession.

Representatives of the company, which has invested about $ 127 million in the project, reacted surprised, saying they did not understand the verdict when "the highest court (Constitutional Court) in the country endorsed the Crucitas project as environmentally, legally, constitutionally and socially viable.”

Members of the Costa Rican business sector were concerned that this sequence of events would project an image of legal insecurity in the country. Luis Gamboa, president of the Costa Rican-American Chamber of Commerce, told Nacion.com that "when an investor has a contract with the State to do a project and that contract is terminated or revoked by another instance, whomever has invested significant amounts of money in the country sees its investment and its future fade away.”

In August, Canada's ambassador in Costa Rica had warned that the situation "sends a very uncertain message to the international investment community at a time when Costa Rica is actively seeking more foreign investment".

The Costa Rican Chamber of Industries summed the situation in a press release: "this ruling thumps a 15 year initiative... 15 years of a red-tape via crucis that can only be understood by those who have been or are businessmen ... if all the entities that participated in approving the project through all these years failed to do correctly, including the constitutional court, as argued by the ruling, ... then we have failed gravely as a country. ... Which investor is going to believe in any permit, license, patent, concession, contract or any other instrument issued by the competent authorities if it can be annulled, cancelled or contested by mistakes and incompetence generated by the state's officials. This is called legal uncertainty and is allied with the insecurity caused by incompetence".

More on this topic

Costa Rican Court Cancels Las Crucitas Mining Concession

November 2010

A local court ruled to annul the concession previously granted to Industrias Infinito, and ordered the company to pay compensatory damages.

The court ordered the Costa Rican State and Industrias Infinito to pay environmental damages.

An article in Elfinancierocr.com noted that the ruling is not definitive, as another court (Sala Primera), must first resolve an appeal by Industrias Infinito.

Cancellation of Crucitas Mining Concession Stands

November 2011

The First Chamber of the Supreme Court of Costa Rica has dismissed appeals filed by the company Industrias Infinito.

In November 2010 the Administrative Court ordered the cancellation of a mining concession to Industrias Infinito, a company that has invested $127 million in the project.

Everybody Wins, Nobody Loses ... Except You and Me

February 2014

The money that the State of Costa Rica will lose in the dispute over the failed concession of the Crucitas mine will come from taxpayer's pockets.

Editorial

During the 20 year period of the soap opera that is Crucitas gold mine, none of the individuals who are involved in one way or another have suffered any financial loss and many, on the contrary, have seen an increase in their income and their bank accounts.

President Chinchilla Will Not Revoke Mina Crucitas Permits

July 2010

Taking into account the ruling of the Constitutional Court in favor of the gold mining project and the risk of a multi-million pound law suit, Chinchilla will not cancel the concession.

The Mina Crucitas operations, which are in the preparatory phase, remain suspended as a precaution pending the reversal of the Contentious-Administrative Tribunal ruling, which stopped the mine from operating in response to a complaint from an environmental organization.

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