MAC/20: Mines and Communities

Costa Rica wins arbitration case over Infinito Gold

Published by MAC on 2021-06-05
Source: Tico Times, Reuters

The country “must remain free from open-pit mining” said President Alvarado.

Costa Rica will not be required to compensate Canadian mining company Infinito Gold for the cancellation of the Crucitas mining project, the International Centre for Settlement of Investment Disputes ruled. Environment Minister Andrea Meza argued that the arbitrators "recognized that it's legitimate for a country to declare itself free of open-pit metals mining as a sovereign objective to protect the environment," according to an official statement.

Infinito had been seeking approximately $300 million in damages and lost profits, including interest, plus attorney fees and other expenses related to the arbitration, while says it spent approximately $81 million developing the project between 1993 and 2013. The company had previously lost a string of court cases despite holding the concession since 2001. ICSID Case No. RB/14/5 total costs were USD1,5 million. 

See also:
 
2014-02-14 Infinito Gold finally files lawsuit against Costa Rican government
2013-10-08 Canada's Infinito Gold is suing Costa Rica for more than $1 billion
2012-11-01 Canadian mining company in Costa Rican legal storm
2011-12-05 Costa Rica: Court annuls Crucitas mining concession, dismisses appeals
2010-11-29 Costa Rican court shuts down Canadian gold mine
2010-11-16 Costa Rica lawmakers vote to ban open-pit mining
 

Costa Rica doesn’t need to pay mining company, international court rules

The Tico Times

https://ticotimes.net/2021/06/04/costa-rica-doesnt-need-to-pay-mining-company-international-court-rules

June 4, 2021

Costa Rica will not be required to compensate mining company Infinito Gold for the cancellation of the Crucitas mining project, the International Centre for Settlement of Investment Disputes ruled Friday.

The decision was announced by President Carlos Alvarado, who said Costa Rica “must remain free from open-pit mining.”

The dispute in question has spanned decades. In 2008, President Óscar Arias issued an executive decree allowing Infinito Gold (through its local subsidiary, Industrias Infinito) to begin construction of an open-pit gold mine at Crucitas in northern Costa Rica.

Arias’s decree deemed the mine “in the public interest” despite a 2002 court ruling that had established a moratorium on open pit mining. Costa Rican courts in 2010 voided Infinito Gold’s authorization due to environmental concerns.

Since then, the region has been harmed by illegal gold miners eager to cash in on the area’s massive quantities of the precious metal. Infinito Gold had hoped to extract 800,000 ounces of gold over 12 years at their Crucitas mine.

A lengthy legal battle

In March 2014, after Infinito definitively lost a legal battle in Costa Rica courts, the company filed a request for arbitration before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

Infinito had been seeking approximately $300 million in damages and lost profits, including interest, plus attorney fees and other expenses related to the arbitration.

The sought-out amount also included several million dollars it was ordered to pay by a Costa Rican court for restoration and reforestation of the mining site, located in northern Alajuela province near the border with Nicaragua.

At the heart of Infinito’s claim before the ICSID was the allegation that, despite continuous controversy over the mine, the Costa Rican government had made numerous assurances — across several administrations — that the project could go forward.

Infinito says it spent approximately $81 million developing the Crucitas gold mine between 1993 and 2013.

In its claim, Infinito blames much of its legal woes in Costa Rica on anti-mining activists and politicians, suggesting that they unduly influenced court and government decisions. (The Costa Rican conservation community saw the end of Crucitas as a major victory for the environment and the country’s green image.)

When it first brought the case before the ICSID, the company argued that Costa Rica had violated four of its obligations under the Costa Rica-Canada Promotion and Protection of Investments treaty. The company claimed that Costa Rica:

  1. Unlawfully expropriated Infinito’s investment by annulling the project’s approvals;
  2. Breached its obligation to provide fair and equitable treatment to Infinito’s investments, including the firm’s “legitimate expectations that it would be treated by Costa Rica in a consistent and predictable manner”;
  3. Failed to provide Infinito’s investments with “full protection and security”; and
  4. Breached the most-favored nation clause of the bilateral investment treaty by shirking “its obligation to do ‘what is necessary’ to protect Infinito’s investments.”

Per a government statement, Friday’s ICSID ruling says Costa Rica “did not deny justice” to Infinito Gold and that while Costa Rica should have “considered” how a ban on open-pit mining would have impacted Infinito Gold, the country does not owe compensation for the decision.


 
Costa Rica says wins arbitration case over open-pit gold mine

Alvaro Murillo

Reuters

June 4, 2021

SAN JOSE - An international arbitration panel ruled Costa Rica does not owe Canadian miner Infinito Gold compensation after the cancellation of a mining project a decade ago, the government announced on Friday, but the firm said it was still studying its options.

Infinito Gold sought about $400 million in damages in the long-running case over its Crucitas open-pit mine in Alajuela province, near the border with Nicaragua, which was fiercely opposed by environmental activists seeking to strengthen the country's ecological stewardship.

The ruling was made by the Washington-based International Center for Settlement (ICSID), affiliated with the World Bank, but has not been made public.

President Carlos Alvarado celebrated the decision in a post on Twitter.

"We should remain free of open-pit mining," he wrote on Friday.

In a company statement sent to Reuters, Infinito Gold pointed to the arbitration ruling's finding that Costa Rica violated the terms of a Costa Rica-Canada investor protection deal, which it said should take precedence over national law.

The statement added that the company is evaluating next steps both with ICSID as well and within Costa Rica, including the possibility of restoring its mining concession.

Environment Minister Andrea Meza, meanwhile, argued that the arbitrators "recognized that it's legitimate for a country to declare itself free of open-pit metals mining as a sovereign objective to protect the environment," according to a statement.

The government statement added that the ruling determined that Costa Rican authorities did not deny due process to Infinito Gold through the country's courts.

Growing activism opposing the Crucitas mine lent support for a law passed by lawmakers in 2010 that banned open-pit mining, a major achievement at the time for those pushing a greener image for the Central American country.

In 2014, Infinito Gold sought international arbitration over its stalled project. The company had previously lost a string of court cases despite holding the concession since 2001.
 
(Reporting by Alvaro Murillo; Additional reporting by Jeff Lewis in Toronto; Writing by David Alire Garcia; Editing by Marguerita Choy and Alistair Bell)
 
 
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