The company Oceana Gold has paid the $8 million it owed because of the international arbitration case it lost against the Salvadoran state and has announced that it has no plans to continue mining activities in the country.
With the payment of $8 million plus interest, an end has been brought to the litigation that began years ago between Pacifi Rim, now Oceana Gold, and the Salvadoran state.
The Public Prosecutor's Office has frozen the company's property, vehicles and bank accounts, because it has not yet paid the $8 million plus interest owed from an international arbitration case which it lost to the Salvadoran State.
From a statement issued by the Attorney General of El Salvador:
The Attorney General of the Republic managed to freeze buildings, vehicles and bank accounts owned by the mining company Oceana Gold, formerly Pacific Rim, for non-payment of court costs to the State of El Salvador, under an international arbitration case initiated by the mining company with the International Center for Settlement of Investment Disputes (ICSID), which it lost and in which it was ordered to pay eight million dollars for expenses incurred by the country.
A new ruling by the International Center for Settlement of Investment Disputes requires the mining company OceanaGold to pay interest on the $8 million it owes to the Salvadoran State.
From a statement issued by the Comptroller General of the Republic:
The International Center for Settlement of Investment Disputes (ICSID) has reported that the mining company Oceana Gold (formerly Pacific Rim) must pay interest to the State of El Salvador on the legal costs owed by the aforementioned transnational.
The International Centre for Settlement of Investment Disputes has ruled in favor of El Salvador in the dispute with the mining company OceanaGold, owner of the El Dorado gold mine.
From a press release by OceanaGold Corporation:
(MELBOURNE) OceanaGold Corporation (TSX/ASX/NZX: OGC) (the “Company”) has been advised that the arbitration tribunal constituted by the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) has found in favour of the Government of El Salvador (the “Government”) in its dispute with an OceanaGold indirect subsidiary company, Pac Rim Cayman LLC. ICSID granted an award of US$8 million to the Government of El Salvador to cover its legal fees and costs.
Companies in the sector point to the favorable geological conditions for this activity in the country and advocate that the suspension of concessions which has been in effect since 2009 be lifted.
Companies engaged in exploration and mining activities support their argument citing the new ways in which the activity now takes place, differentiating the artisanal mining techniques which were used in the past from those used in modern mining.
Central America should take note that the Canadian government is moving away from environmental positions and promoting and defending the interests of its mining investment undertakings in other territories.
The Salvadoran government is attempting to gain support in Canada in its litigation against Oceana Gold, a company founded on Australian and Canadian capital which is trying to buy Pacific Rim, a company that sued El Salvador for $301 million because they were not granted permission to operate a gold mine in the north.
Arbitration between the Salvadoran government and the mining company Pacific Rim is in its final stages at the International Centre for Settlement of Investment Disputes.
The Canadian mining company received authorization to operate the El Dorado mine in 2002, during the administration of President Francisco Flores, but his successor Antonio Saca announced - and followed through on - that he would not authorize any mining project, a position also held by the current President Mauricio Funes.
A lawsuit by Pacific Rim Mining against the Salvadoran government must be resolved by the local jurisdiction, and not by that provided for under the DR-CAFTA.
An arbitration panel from the World Bank has found that the Canadian company Pacific Rim "does not have nor has had substantial operations in the United States" in order to take their case against the State of El Salvador to the dispute settlement mechanisms of DR-CAFTA.
The International Center for Settlement of Investment Disputes dismissed a lawsuit filed by Commerce Group.
The lawsuit filed under CAFTA terms alleged that the Government, in 2006, without justification, revoked permits which had been awarded for the exploitation of mines in San Cristobal and San Sebastian and that a request made in 2008 to extend operating licenses at the San Sebastian and Nueva Esparta mines was denied.
The Canadian mining company, currently embroiled in an international arbitration case with El Salvador, has signed a letter of intention to acquire a gold mine in Panama.
Known as "El Remance", the mine is currently the property of Clifton Mining Company, with whom Pacific Rim will sign an option to purchase a 100% stake in the project.
Pacific Rim commits to paying $200,000, issuing five million shares to Clifton, carrying out drilling and environmental works, and paying an additional $5 million when it exercises the option.
The Salvadoran government has filed a new set of objections after the
The document, presented as a response to the backing given by the International Center for Investment Dispute Resolution (CIADI), describes the way the company changed its nationality in order to take advantage of the benefits of the free trade agreement.
"The jurisdictional objections filed, to which El Diario de Hoy was given access, argue that Pacific Rim's claims are inadmissable owing to the abuse of due process it committed. The mining company's official headquarters used to be in the Cayman Islands, part of the United Kingdon, but since 2007 it has called Nevada home, three years after the conflict with El Salvador's Economy Ministry began".
The court at the International Centre for Settlement of Investment Disputes (ICSID) has ruled in favor of the Canadian gold mining company and dismissed preliminary objections raised by El Salvador.
Pacific Rim, owner of the El Dorado gold mine, is at the center of an international dispute with the Salvadoran government. The company claims that the government owes it at least $77 million for delays suffered to the mining project, in violation of the Central American Free Trade Agreement (CAFTA-DR).
CABEI confirmed that the works to build the new seat of the Costa Rican Legislative Assembly, valued at $96 million, will start on April 2011.
According to the contract signed with the Inter-American Development Bank on 2008, works were scheduled to start on 2010, but were delayed due to problems securing the lots.
The process was resumed after negotiations between Luis Gerardo Villanueva, president of the Assembly, and representatives from the Bank.
Commerce Group filed a lawsuit, alleging El Salvador denied operation permits.
The lawsuit was filed at the International Centre for Settlement of Investment Disputes (ICSID), which is part of the World Bank. Another mining company, Pacific Rim, sued the country in June.
From an article in Elsalvador.com: "Commerce Group argues that on September 13th, 2006, the Government of El Salvador revoked, without justification or prior notice, the exploitation permits that had been granted for the mines in San Sebastián (La Unión) and San Cristóbal (San Miguel), for mining gold and silver. It adds that in 2008, the government denied a request to extend their exploitation permits for mining at Nuevo San Sebastián y Nueva Esparta (both within La Unión and Morazán)".
Pacific Rim interposed an arbitrage against El Salvador, process that started on June 15.
The arbitration was interposed by Pacific Rim on the grounds that the country did not grant permission for the start of operations of El Dorado, a gold extraction project located in the Cabañas department.
Keny López writes in her article in Laprensagrafica.com: "In 2002, the Francisco Flores administration granted exploration permits to Pacific Rim, and since then the company has invested over $70 million. In February 2009, Antonio Saca, president of the country at that time, stated that he preferred El Salvador to face an arbitration process than green light mining in the country".
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