MAC: Mines and Communities

Vannessa to seek international arbitration for Crucitas if necessary

Published by MAC on 2005-01-24

Vannessa to seek international arbitration for Crucitas if necessary

January 24 2005

By Aiden Corkery -

Para acceder a una versión en español de este artículo, siga el siguiente link

Canadian minerals company Vannessa Ventures (TSX-V: VVV) will consider seeking international arbitration to resolve the legal issues blocking its stalled Cerro Crucitas gold project in Costa Rica if necessary, company president John Morgan told BNamericas.

"There is still the option open to us to go for international arbitration. That is something we have to consider to protect our rights," Morgan said.

The Cerro Crucitas project was dealt a serious blow in December 2004 when Costa Rica's supreme court overturned the mining permit allowing the project. The court ruled that the permit violated article 50 of Costa Rica's constitution guaranteeing the public a healthy environment and ordered the state to pay costs, damages and compensation to the concession holder.

However, the court also stated that the separate environmental assessment process currently before the country's environmental regulator Setena should not be affected by the decision to annul the exploitation permit.

Setena issued a resolution on January 20 asking Vannessa to file an addendum to its environmental impact study (EIS) to clarify certain queries raised by Setena while evaluating it.

Vannessa estimates it could prepare the addendum within six weeks but agreed that the supreme court's decision to allow the environmental assessment process to continue while overturning the exploitation permit is confusing.

The company would prefer to pursue international arbitration rather than give up on such a large project and attempt to begin the process of finding a completely new large project again, Morgan added.

Vannessa has already had a request for international arbitration to resolve the ownership of the Las Cristinas project in Venezuela accepted by the international center for the settlement of investment disputes (Icsid) in Washington last November and said it may also make a similar request for arbitration in relation to Cerro Crucitas.

"These projects are not that easy to find. When you look at whether we should persevere with these existing projects versus the other option of going out any trying to find another million ounce project, I'd take the former," he said.

Vannessa calculates gold extraction of at least 1Moz at Crucitas over a 12-year period with an average annual production of 100,000oz during the first four years and a production cost of US$160/oz.

Court Annuls Gold Mining Concession

12th December 2004

Associated Press

Costa Rica's highest court has annulled a $70 million (euro61 million) concession allowing a local subsidiary of a Canadian company to dig for gold near the border with Nicaragua, authorities said Thursday.

In a ruling dated Nov. 26, Constitutional Court judges upheld an injunction filed by environmentalists in 2002 that sought to block the mining project on the grounds it violated the Central American Biodiversity agreement as well as this country's constitutional rules on the environment.

The affected company, Industrias Infinito, is the Costa Rican affiliate of Calgary-based Vannessa Ventures Ltd., whose president, John Morgan, was out of the office and unavailable for comment Thursday.

According to court filings, Industrias Infinito estimated a completed open-air mine at Las Crucitas, 110 miles (175 kilometers), north of the capital, San Jose, could one day uncover as much as 600,000 ounces of gold worth about US$435 million (euro378 million).

In news release posted on its Web site, Industrias Infinito insisted its project would not harm the environment.

"The only explanation for this decision can be an error or an incorrect interpretation" of the law, it said.

The Costa Rican Federation for Environmental Conservation issued its own statement declaring the court's decision a victory.

Court Stops Northern Gold Mine

By Katherine Stanley and Kim Beecheno, Tico Times Staff

December 10 2004

Costa Rica - The Constitutional Chamber of the Supreme Court (Sala IV) on Wednesday announced it has annulled a mining concession in Las Crucitas, a town the Northern Zone near the Nicaraguan border, eliciting relief from environmentalists and opponents to the controversial gold mine.

In 2001, then-President Miguel Ángel Rodríguez and the Ministry of the Environment and Energy (MINAE) granted a concession to the mining company Industrias Infinito S.A., the Costa Rican subsidiary of the Canadian firm Vannessa Ventures.

According to the Sala IV ruling, the concession violates Article 50 of the Constitution, which guarantees every person's right to a healthy and ecologically balanced environment.

"We're astonished and perplexed by this ruling, given that the Sala IV previously rejected the same appeal," Industrias Infinito General Manager Jesús Carvajal told The Tico Times yesterday. "We don't know the reasons behind the ruling."

Carvajal said it is too early to tell if his company, which he said has invested $35 million in the project to date, would pursue further legal action. "While our company is the party affected by the ruling, the appeal was actually filed against MINAE, not us," he said.

"We hope the ministry will ask the Sala IV to review the decision," he added.

THE ruling was prompted by a case filed in April 2002 by Carlos and Diana Murillo, members of the Front of Opposition to Northern-Zone Mining.

Concession contracts for both Industrias Infinito and Río Minerales S.A., a company set to begin another controversial gold mine in Miramar , in the hills above the Pacific port town of Puntarenas , were both awarded before President Abel Pacheco signed a moratorium on open-pit mining in June 2002, just after he took office (TT, June 7, 2002 ).

Although opponents of the mining projects argued the concessions should be revoked, the Sala IV sided with In-dustrias Infinito in a 2002 ruling, upholding the concession because it was approved before the moratorium (TT, Oct. 25, 2002 ).

An article in the San José daily La Prensa Libre earlier this year, picked up by Nicaraguan journalists, caused panic in this neighboring country over the potential environmental impact of the proposed mine, as it would sit five kilometers south of the San Juan River, part of which forms the border between Costa Rica and Nicaragua (TT, Sept. 3).

Officials in Nicaragua created a commission to study the controversial project after Nicaraguan environmentalists warned that the mine could have a possibly devastating effect on the San Juan River , used for fishing by hundreds of Nicaraguan southern-zone residents.

Nicaragua 's environmental lawyer, Lisandro D'Leon, warned that if it was determined the mining project would cause irreparable harm to Nicaragua 's environment, the Nicaraguan Foreign Ministry would employ various international treaties and conventions to halt it.

The Technical Secretariat of the Environment Ministry (SETENA) had rejected the environmental-impact study presented by Industrias Infinito in 2003, but the Sala IV ordered SETENA to re-evaluate the project because of a series of procedural oversights.

After a public hearing on the gold mine in July of this year (TT, July 23) SETENA said it was still reviewing information gathered and had not reached a decision on the environmental-impact study of the project when the Sala IV made its ruling this week.

One of the primary concerns of environmentalists and residents is the fact the company would use cyanide to extract gold from the ore at the site. Earlier this year, Carvajal said the company would be using tanks for this process to prevent the cyanide from making contact with the environment. Later it would be destroyed in a process called Inco-SO2/Air, where the cyanide is broken down into 28 elements. The mining company hoped to extract more than 650,000 ounces of gold during the next eight years in operation, according to Carvajal.

A statement from Industrias Infinito yesterday said the company had complied with all legal procedures to operate in Costa Rica .

"The only possible explanation is that this is an error or misinterpretation of the actual state of the concession, which was awarded under the rules and regulations of 2001," the statement said.

Vannessa solicitaría arbitraje internacional para Crucitas - Costa Rica

Lunes 24, Enero 2005

Por Aiden Corkery -

La minera canadiense Vannessa Ventures (TSX-V: VVV) considerará recurrir a un arbitraje internacional para resolver los problemas legales que tienen paralizado su proyecto aurífero Cerro Crucitas en Costa Rica de ser necesario, dijo a BNamericas el presidente de la empresa, John Morgan.

"Aún tenemos opción de recurrir a un arbitraje internacional. Es algo que tenemos que considerar para proteger nuestros derechos", comentó Morgan.

El proyecto Cerro Crucitas sufrió un serio revés en diciembre del 2004 cuando la Corte Suprema de Costa Rica revirtió el permiso minero que autorizaba el proyecto. La corte dictaminó que el permiso violaba el artículo 50 de la Constitución Política de Costa Rica -que garantiza al público un ambiente saludable- y ordenó al estado pagar los costos, daños y compensaciones al adjudicatario de la concesión.

Sin embargo, la corte sancionó además que el proceso adicional de evaluación ambiental que actualmente se encuentra ante el regulador ambiental local -Setena- no debe verse afectado por la decisión de revocar el permiso de explotación.

El 20 de enero, Setena emitió una resolución solicitando a Vannessa que presentara un apéndice del estudio de impacto ambiental para aclarar ciertas inquietudes que surgieron mientras lo evaluaba.

Vannessa estima que podría preparar el apéndice en un plazo de seis semanas, pero convino en que es confusa la decisión de la Corte Suprema que permite que el proceso de evaluación ambiental continúe al tiempo que revierte el permiso de explotación.

Morgan agregó que la empresa prefiere solicitar un arbitraje internacional en lugar de abandonar un proyecto de esta envergadura y comenzar de cero la búsqueda de otro proyecto completamente nuevo.

Una solicitud de arbitraje internacional para definir la propiedad del proyecto Las Cristinas en Venezuela que había presentado Vannessa fue aceptada en noviembre pasado por el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (Ciadi) en Washington y la firma manifestó que podría elevar una petición similar en relación con Cerro Crucitas.

"Estos proyectos no son fáciles de encontrar. Si se trata de elegir entre perseverar con estos proyectos y tratar de encontrar otra iniciativa de millones de onzas, me quedo con la primera opción", comentó.

Vannessa calcula una extracción de oro de al menos 1Moz en Crucitas en un período de 12 años, con una producción anual promedio de 100.000oz durante los primeros cuatro años y un costo de producción de US$160/oz.

Sala Constitucional anula concesión minera en Costa Rica

December 09, 2004

Associated Press

SAN JOSE - La Corte Constitucional en Costa Rica ordenó la anulación de una concesión otorgada a la empresa minera Industrias Infinito, subsidiaria de la canadiense Vannessa Ventures, se informó el jueves.

Mediante un comunicado de prensa, la Federación Costarricense para la Conservación del Ambiente (FECON) celebró el voto de los magistrados sobre un recurso de amparo presentado desde el 2002 por ecologistas.

En el mismo se reclamaba que la explotación minera en la zona donde se pretendía desarrollar el proyecto violaba convenios internacionales, como el de Biodiversidad Centroamericano.

"En consecuencia se anula la resolución R-578-2001 MINAE... que otorgan la concesión de explotación minera a Industrias Infinito Sociedad Anónima", indica la resolución fechada el 26 de noviembre pasado.

La Corte consideró que el proyecto viola el principio de garantía de un ambiente sano establecido en la Carta Magna.

Mediante un boletín divulgado en Internet, la empresa insistió en que ha cumplido todos los requisitos y compromisos legales.

"La única explicación posible es que dicho fallo responda a un error o una mala interpretación del estado actual de la concesión", señaló la nota. La empresa agregó que espera una petición de apelación por parte del ministerio del Ambiente.

El año pasado la misma Corte había dado razón a la firma en un recurso contra la Secretaría Técnica Ambiental, luego que la entidad rechazara el estudio de impacto ambiental alegando violaciones en el proceso.

La compañía pretende desarrollar un proyecto de minería a cielo abierto en Las Crucitas, a más de 173 kilómetros al norte de la capital con una inversión por unos 70 millones de dólares.

Según cálculos de la firma, el valor de la mina podría alcanzar los 435 millones de dólares gracias al yacimiento de unas 600.000 onzas de oro de alta calidad.

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