News Column

Infinito Gold files lawsuit against Costa Rican government over canceled gold mining contract

February 10, 2014

By Zach Dyer, The Tico Times, San Jose, Costa Rica



Feb. 10--After months of saber rattling, Infinito Gold, Ltd. announced Monday that it had filed for a Request for Arbitration with a World Bank court in its protracted dispute with the Costa Rican government over the canceled Las Crucitas gold mining concession. The concession was revoked in 2010 following environmental concerns and doubts about the concession's legality.

The Canadian mining company seeks to recoup at least $94 million in expenses incurred during the cancelled project's development between 1993 and 2010, plus interest and legal fees, according to a statement released Monday. Originally Infinito Gold claimed $1 billion in lost profits, but the British Columbia-based enterprise has backed away from that number in the lawsuit.

The mining company claimed that Costa Rica violated the Costa Rica-Canada Bilateral Investment Treaty when an Administrative Appeals Court revoked its mining concession in San Carlos, Alajuela, in 2010.

Yokebec Soto, spokeswoman for Industrias Infinto, S.A., the wholly-owned subsidiary of Infinito Gold that managed the Crucitas concession, told The Tico Times that she could not give more details about the case. In a statement, she said the company hoped to reach a "friendly agreement" with Costa Rica during the arbitration.

The Tico Times contacted the Environment Ministry for comment but has not yet received a response. Foreign Trade Minister Anabel Gonzalez was in Colombia traveling with President Laura Chinchilla on Monday and could not be reached for comment.

Opposed to a previous statement from the company in October 2013, the statement Monday backed away from a hefty claim of $1 billion in lost profits:

The Company emphasizes that, contrary to some media reports, its objective in pursuing its legal remedies is to recoup the costs that have been spent, plus interest, in developing the project over the past 20 years, as opposed to the profits it reasonably expected to earn had it been allowed to fully develop the project.

In 2008, Infinito obtained the concession from President Oscar Arias' administration, but an Administrative Appeals Court later ordered the Prosecutor's Office to open an investigation of the president for signing off on the project when environmental studies were still pending. That case has since been closed.

In November 2010, the appeals court revoked Industrias Infinito's gold-mining concession. The company exhausted its legal recourse in Costa Rica after it lost its appeal in November 2011 with the Supreme Court's Civil and Administrative Law Branch.

In April 2013, the company announced that it would take its case to the World Bank's International Centre for Settlement of Investment Disputes if the two were unable to resolve the issue during the six-month window required under the investment treaty.

An online petition protesting the company's case against Costa Rica has collected more than 300,000 signatures.

Costa Rica's Legislative Assembly unanimously banned open-pit mining on Nov. 9, 2010, weeks before the Administrative Appeals Court issued its ruling against the Crucitas project.

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Source: Tico Times, The (San Jose, Costa Rica)


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