Thursday, September 08, 2016

International arbitration over gold mining may be close to decision

It has been one year since I last wrote a blog post about gold mining in El Salvador and the international arbitration commenced against El Salvador by Oceana Gold (formerly known as Pac Rim).   It has been two years since the final hearing in that arbitration.   It has been seven years since the arbitration started.  

Now there are statements floating around that a decision by the arbitration panel is imminent.   According to some reports, the parties have been told that a decision could come in September and that the decision has been written but simply needs to be translated into Spanish.  It was also reported that OceanaGold recently approached El Salvador with a request to negotiate over the dispute but the overture was rejected.

As a reminder, OceanaGold sued El Salvador because of a moratorium on mining permits imposed by the Tony Saca administration and continued by the following administrations.  Despite the existence of this de facto moratorium, El Salvador's National Assembly has never acted to pass a law banning gold mining despite pressure from environmental activists and significant popular support.
OceanGold asserts that this moratorium changed the rules and deprived the mining company of the value of its investment in gold mining exploration in El Salvador.   The arbitration seeks hundreds of millions of dollars in damages from El Salvador.  

To understand the issues and what's at stake, see this primer which I prepared when the final hearing began.

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