Arguing that the basic principles of public procurement were not complied with, in Panama the contract between the State and the company Petaquilla Minera has been declared unconstitutional.
The legal dispute began in 2009, when the Environmental Advocacy Center (CIAM) filed an unconstitutionality appeal against the contract that grants a twenty year concession to Cerro Petaquilla to exploit and sell gold, copper and other mineral resources.
Mining companies and spanish citizens are suing the Panamanian State arguing arbitrary and discriminatory measures imposed by the Martinelli Administration are detrimental to their investments.
The companies Petaquilla Gold, Petaquilla Minerals LTD, and Corporación de Recursos Iberia, S.A. are sueing the Panamanian government for $2.3 billion at the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank for direct damages against the company in Panama and its shareholders, reported Laestrella.com.pa.
The Supreme Court rejects appeal case presented by Petaquilla Minerals to reverse the cancellation of the concession to exploit the gold mine El Molejón.
The appeals filed by the former concessionaire of Molejón in an attempt to recover the concession and invalidate the tender which was called by the PAN for cleaning tailing basins have been rejected by the Supreme Court.
The concessionaire has filed a reconsideration motion to avoid cancellation of the concession, and while it is resolved, the government will take care of the necessary maintenance work.
The review process to be carried out now by the Ministry of Commerce and Industry (Mici) could take up to two months. Once the process has been completed, it will be decided whether or not to cancel the concession granted to the Canadian company Petaquilla Minerals.
The Varela administration has announced that it will analyze revoking the concession granted to Petaquilla Minerals to operate at Molejón and freeze the paperwork for new mining concessions.
Workers at the Petaquilla Minerals Mine reported cessation of production and shareholders are demanding further explanation of the reduction of 98% of production in the first quarter of the year.
The decline in production at Molejón gold mine, in the district of Donoso, Colon, is concerning the shareholders of the Canadian company Petaquilla Minerals, who believe that some decisions made by the directors of the company have not been adequate and are proposing alternatives such as capitalizing the company, among other things.
The approval of a draft contract-law in favor of Vera Gold Corp. would ensure an investment of more than $50 million in the former Santa Rosa mine.
This contract-law must first be approved by the Panamanian Congress. The lawyers explained that the aim of this type of concession by law is to protect the company.
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