The Canadian firm Infinito Gold has ceased operations and requested the temporary suspension of arbitration against Costa Rica over the failed concession of the Crucitas gold mine.
The cessation of business operations due to lack of financial resources, announced in mid-July, when all its directors and managers resigned, could be the main reason for the decision to request the temporary suspension of the proceedings against Costa Rica over the Crucitas gold mine, for which $94 million was demanded for violations of the agreement for the promotion and protection of investments between Costa Rica and Canada.
In answering whether Costa Rica should compensate Industrias Infinito in the Crucitas mine case, the minister in charge of the issue said, "they shouldn't be paid or it should be minimal. "
EDITORIAL
In an article in Prensalibre.cr the Minister of Environment and Energy René Castro answered the question by saying "We believe that Costa Rica should not give any compensation to Industrias Infinito because there was never actually a concession."
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.
Infinito Gold is suing for $94 million lost due to violations of the agreement for the promotion and protection of investments between Costa Rica and Canada.
Industrias Infinito confirmed that its parent company, Infinito Gold, has filed a law suit against Costa Rica at the International Centre for Settlement of Investment Disputes (ICSID) seeking compensation as a result of their investments in the canceled mining project of Crucitas.
After the final decision by the Constitutional Court dismissing their claims, Industrias Infinito has announced it will continue litigation in international tribunals.
"Industrias Infinito turned to international arbitration with the International Centre for Settlement of Investment Disputes and Investment Disputes (ICSID) in April, the company is asking the State to pay $1.092 billion in compensation for halting the mining concession", reported Nacion.com.
Infinito Gold has given an ultimatum to the Costa Rican government, to either agree to resume its gold mining project, or face an international law suit for $1.09 billion.
The Canadian mining company had initially obtained permits for the operation of a gold mine in Costa Rican territory, and had already started the project when a court ruling overturned the award, pointing to flaws in the process of granting permits, and environmental damage.
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.
"The First Chamber ... decided to uphold all parts of the ruling, so that in addition to the cancellation of the operating permits, the decree that declared mining activity of public interest has been annulled and it was reiterated that legal proceedings should be initiated against several authorities such as the ex-president Oscar Arias", reported Elfinancierocr.com.
A 15-year, $127 million investment was suddenly halted by a court canceling a mining concession to Industrias Infinito in Costa Rica.
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.”
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.
The Canadian ambassador to Costa Rica has warned of the damage to the country's international reputation if the project is cancelled.
Neil Reeder, Canadian ambassador, indicated that his government can vouch for the environmental responsibility of Canadian mining companies. Despite the project being financed by the private sector, the Canadian government maintains a close interest in the project, he added.
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.
The Costa Rican government predicts possible damages payable to Industrias Infinito if the gold mining contract is cancelled.
Costa Rica’s courts have indicated to the president that she has the legal authority to cancel the Mina Crucitas mining contract, provided the government assumes responsibility for the case by providing compensation.
Nacion.com reports that, “the size of the compensation surprised Industrias Infinito’s head of corporate relations, Juan Carlos Obando, who thought the figure seemed high. However, later the company’s analysts calculated that a similar amount of $1.8 billion was possible, although Obando commented that the company does not expect this outcome”.
An appeals court maintained a series of precautionary measures hampering the development of Crucitas gold mine, owned by Infinito Gold.
The court’s decision was based on a “in dubio pro natura” principle, which implies prevention and precaution in favor of natural resources. The measures against the company will remain in place until a final ruling is issued.
In its initial ministerial meeting, the new government issued a decree imposing an indefinite moratorium on all forms of gold mining.
The moratorium will apply on gold metal, “exploration, exploitation and benefitting from materials extracted using cyanide or mercury”. It will become active once published in the official government gazette.
The new decree does not affect those permits granted to Industrias Infitino for Crucitas Mine, currently at the center of a hotly debated legal dispute.
The open pit gold mine, property of Infinito Gold Ltd, is unable to operate due to renewed lawsuits from environmentalist groups.
Crucitas’ operations were initially suspended in 2008, but in early April 2010, the Constitutional Court green lighted them again.
“But this proved to be a short lived victory, as appeals from environmentalists groups forced Inifinto to suspend working on the mine until the legal issue is settled”, reported Terra.