MAC: Mines and Communities

Canadian companies threaten El Salvador and Costa Rica

Published by MAC on 2013-04-09
Source: Statements, Tico Times

Canadian mining companies have quite a history of threatening legal action against governments which purportedly place the interests of their own economies and peoples before the foreign intruders.

PacRim has now advanced to the final stage of its long-standing "Arbitration" case against the government of El Salvador. See: Mining company allowed to continue its attack on El Salvador.

And Infinito Gold has served notice on Costa Rica that it considers the Republic to be in breach of a bilateral investment agreement. See: Canadian mining company in Costa Rican legal storm

Statement Filed in Arbitration Case Against El Salvador; PacRim Seeks Damages of US $315 Million

Pacific Rim Mining Corp. statement

1 April 2013

VANCOUVER, BRITISH COLUMBIA - Pacific Rim Mining Corp. ("Pacific Rim" or the "Company") announces that its US subsidiary PacRim Cayman, LLC ("PacRim") has now filed the statement of claim (the "Memorial") in its arbitration case (the "Arbitration") against the Government of El Salvador. The Arbitration, now in its final, merits-based phase, is being heard under the Salvadoran Investment Law by a Tribunal of three members at the World Bank's International Centre for Settlement of Investment Disputes ("ICSID") in Washington, DC.

In this final phase of the Arbitration, the merits of PacRim's claims as outlined in the Memorial will be addressed. The Tribunal will determine whether El Salvador has breached the Salvadoran Investment Law by refusing to issue the necessary mining licences for the El Dorado gold project. They will also determine El Salvador's monetary liability for breaching the investment protections owed to a foreign investor under these laws. The Memorial is supported by detailed statements of multiple expert witnesses in the fields of economic geology, mine financing, environmental science and international mining law.

Based on a March 28, 2013 valuation (the "Valuation") performed by an independent expert, PacRim is seeking compensation in the amount of US$ 315 Million (including prejudgment interest) for its losses caused by the Government of El Salvador's breaches of the Salvadoran Investment Law. Additional information regarding the Valuation is provided below.

Tom Shrake, President & CEO, states, "The filing of the Memorial represents a significant milestone in the Arbitration. We are very confident in the merits of our case and our ability to receive fair-value for our expropriated assets. Unfortunately, we are not alone. Because of a pattern of mistreatment of foreign investors by the Government of El Salvador, the country is now the single worst jurisdiction in all of Latin America in attracting foreign investment and the slowest growing economy in Central America for the eighth consecutive year. Poverty has skyrocketed to 47.5% of the population, an increase of approximately 10%, over the same eight-year period. We continue to reach out to the Government of El Salvador to end this dispute to allow our Salvadoran employees to get back to work."

The El Dorado Mine, as designed and submitted to the Salvadoran authorities eight years ago, set new precedents for environmental protection in all of the Americas and exceeds current Canadian and US environmental standards. Preservation of water quality and quantity is a key component of the industry-leading El Dorado mine design. Water for ore processing is to be collected in a reservoir in the subtropical ecosystem and not drawn from local water supplies. The water used by the operation will be extensively recycled and any water discharged from the reservoir will be processed by a water treatment plant. Water leaving the reservoir will be significantly cleaner than it was when it arrived on site and will provide a clean water source for local villages.

Had El Salvador followed its own laws, the El Dorado Mine would be in operation today, employing thousands of Salvadorans in one of the poorest regions of the country. The El Dorado operation would be the single greatest taxpayer in El Salvador.

For background information regarding the Arbitration, readers are referred to Pacific Rim news releases # 12-05, #11-06, #10-07, #09-08 and #09-03 available at and to the Company's 20-F and AIF filings.

On behalf of the board of directors,

Thomas C. Shrake, President and CEO

The TSX has neither reviewed nor accept responsibility for the adequacy or accuracy of this release.

Contact Information

Pacific Rim Mining Corp.
Thomas C. Shrake
President and CEO

Pacific Rim's announcement of a US $315 million increase in its law suit against El Salvador denounced by members of the National Roundtable Against Metallic Mining in El Salvador

National Roundtable Against Metallic Mining press release

3 April 2013

Canadian mining company Pacific Rim has announced it will increase to US $315 million its demand against the Salvadoran Government for failing to grant a license to exploit gold in the El Dorado mine in its northern department of Cabañas. Pacific Rim is suing under Salvadoran Investment Laws after the ICSID tribunal dismissed their case to sue under the US, Central America Free Trade Agreement, CAFTA-DR.

Communities and organizations that make up the National Roundtable Against Metallic Mining reject the actions by the company Pacific Rim, because they attempt to undermine the Salvadoran government's right to practice economic policy based on public interest. Pacific Rim's announcement also demonstrates its contempt for the will of the Salvadoran population that has time and again exercised their right to say no to metallic mining. Resource extraction is not an option for development in our country due the serious dangers it posses to people's health and the environment, we are particularly concerned about the impact on our precarious water resources.

We categorically deplore the hypocrisy of Thomas Shrake, Pacific Rim's CEO, who insists on portraying the company as a creator of jobs and benefits for the people of El Salvador. As we have stated before, if the true intention of Pacific Rim were to help the democratic, equitable and sustainable development of the Salvadoran population, they should leave the country immediately rather than increasing the amount of the demand filed in 2009. It is a contradiction for a mining company that claims to be interested in the wellbeing of a population, to seek to extort damages for lost profits from a government that has simply acceded to the demands of its population. In particular, we are concerned about the utilization of tribunals such as the International Centre for Settlement of Investment Disputes (ICSID) to resolve conflicts with the government of El Salvador, such tribunals are undemocratic in nature and are not concerned with protecting the application of human rights nor the environment.

As long as our country is bound by free trade agreements and permissive legislation that favors corporate interests over the wellbeing of the population, we will be at the mercy of corporations that use legal systems with frivolous cases that compromise the public purse of El Salvador. Pacific Rim is not the only mining company that has sued the country before the ICSID, US based company Commerce Group has also demanded a payment of US $100 million from the government of El Salvador. It is completely unreasonable that the public purse is on the hook for alleged damages while the Salvadoran public continues face deficits in social spending. The demand for $315 million represents one third of the national budget for education in El Salvador.

Based on the concerns raised above, National Roundtable Against Metallic Mining calls on:


Infinito Gold Ltd. Serves Notice to Republic of Costa Rica

Infinito Gold Press statement

4 April 2013

CALGARY - Infinito Gold Ltd. ("Infinito" or the "Company") announces that on April 4, 2013 it has served notice to the Government of the Republic of Costa Rica (the "Republic") that Infinito considers the Republic to be in breach of the provisions of the Agreement Between the Government of Canada and the Government of the Republic of Costa Rica for the Promotion and Protection of Investments (the "Bilateral Investment Treaty"), in respect of the Republic's treatment of Infinito's investment in its subsidiary Industrias Infinito S.A. ("IISA") and the Las Crucitas mining concession held by IISA.

Infinito has served notice to the Republic in accordance with Article XII of the Bilateral Investment Treaty, however, Infinito has invited the Republic to settle this dispute amicably pursuant to Article XII(1) of the Bilateral Investment Treaty. It is important to note that serving this notification to the Republic does not constitute the commencement of formal arbitration proceedings, however, if the dispute cannot be settled, Infinito is prepared to take all necessary steps to pursue its arbitral remedies under the Bilateral Investment Treaty.

By way of background IISA completed all the environmental, social and technical studies and obtained all approvals required under Costa Rican law to develop and operate the Las Crucitas Project. In February 2008, the Secreteria Tecnica Nacional Ambiental ("SETENA") approved a modified Environmental Impact Study while in May 2008, the Ministerio de Ambiente y Energia confirmed Industrias Infinito's Exploitation Concession. On October 17, 2008, then President Oscar Arias issued a Presidential Decree declaring the Crucitas Project to be in the national interest, allowing a change of land use permit to be obtained and for site clearing to commence.

On April 16, 2010, in response to a claim brought by a public interest group that had halted clearing and mine construction activities for 18 months, the Constitutional Chamber of the Supreme Court ("SALA IV") ruled that all of the objections that had been raised against the project were without merit (with one exception that was resolved by the time the legal process was completed). The Constitutional Chamber's decision, which had involved a project site inspection in addition to oral hearings, included 340 pages of reasons released in July 9, 2010, which addresses all constitutional, legal and environmental/technical issues in depth.

Notwithstanding this complete and definitive ruling from the SALA IV allowing the Crucitas Project to proceed, IISA's concession to develop Las Crucitas has been annulled by a decision made initially on November 24, 2010, by a lower Costa Rican court -- the Tribunal Contencioso Administrativo ("Tribunal") - and affirmed on November 30, 2011 by the Administrative Chamber of the Supreme Court ("SALA I").

In its decision, the SALA I reached a conclusion that was the opposite of the conclusion the SALA IV had reached only a year and a half earlier, effectively upholding the Tribunal's decision to annul IISA's concession and invalidate its environmental approvals.

On November 11, 2010, IISA formally requested that the SALA IV enforce its decision in order to prevent any conflict between the SALA IV's decision affirming the validity IISA's permits and approvals and any inconsistent decision from the Tribunal or the SALA I. To date, the SALA IV has taken no action to respond to this request. As a result, Infinito and IISA find themselves in a legal vacuum, subject to two contradictory decisions with no basis under the Costa Rican legal system for resolving this conflict.

Infinito Gold Ltd.

John Morgan

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Infinito Gold Ltd.

For further information:
600, 1100 1st Street S.E.
Calgary, Alberta T2G 1B1
Telephone: (403) 444-5191


Canadian firm threatens $1 billion lawsuit against Costa Rica

By L. Arias

Tico Times

4 April 2013

A Mining Code amendment in 2011 halted an open-pit gold mine near the Nicaraguan border.

Canadian mining company Infinito Gold on Thursday demanded the right to resume work at a gold mine in Costa Rica's northern region "over a period of six months from today [Thursday]," or else the company said it would file a $1 billion lawsuit for breach of the Costa Rica-Canada Free Trade Agreement.

The company sent a letter to Foreign Trade Minister Anabel González demanding the government "allow local franchise Industrias Infinito SA (IISA) to resume full operations of the Crucitas mine located in San Carlos, Alajuela, which was closed after the approval of an amendment to the Mining Law that banned open-pit mining in the country."

IISA's spokeswoman Yokebec Soto said at a press conference that the company "believed the investment was guaranteed, because our company was invited to the country to develop the mine."

The company has already invested $92 million in the project, and it claims to have lost $1 billion in potential profit, Soto said.

She said Infinito would pursue legal action as outlined in protocols of the Bilateral Investment Treaty, approved by both countries.

On Jan. 30, 2011, Costa Rica's Supreme Court's Civil and Administrative Law Branch annulled the mining concession and upheld a ban on open-pit mining, approved after an amendment to the country's Mining Code was adopted in 2010.

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