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Infinito Gold to move forward with billion-dollar lawsuit against Costa Rica

June 20, 2013

Canadian mining company Infinito Gold on Thursday threatened Costa Rica with a billion-dollar lawsuit after the Constitutional Chamber of the Supreme Court, or Sala IV, rejected a company appeal to strike down an earlier court’s annulment of a mining concession for Las Crucitas, a planned open-pit gold mine in the northern region.

Infinito in April issued the government an ultimatum and set a six-month deadline “to resolve the dispute,” or the company said it would pursue legal action through international organizations.

Infinito’s appeal to the Sala IV was the latest attempt to find a legal solution to the annulment.

On Wednesday, the Sala IV “ruled unanimously to reject the claim,” citing procedural technicalities, the judicial branch said in a press release. The Supreme Court’s Civil and Administrative Law Branch (Sala I) annulled the mining concession in November 2011.

Environment Minister René Castro on Wednesday said “Costa Rica has a reason to celebrate the decision.” 

“We do not want open-pit mining in our country,” he said, adding that the ruling “enhances the ecological profile of our nation.”

Infinito Gold’s spokeswoman in Costa Rica, Yoquebec Soto, on Thursday said the company would present documents related to the concession that they would use to file a complaint before the International Centre for Settlement of Investment Disputes (ICSID), where they will request $1.92 billion in compensation for alleged breach of the Costa Rica-Canada Bilateral Investment Treaty. The company said it has already invested $92 million in the project, and it claims to have lost $1 billion in potential profit.

“This country is a threat to foreign investment,” Soto said, adding that the World Bank’s “Doing Business” report ranked Costa Rica as one of the worst places to invest in Latin America because of excessive bureaucracy and lack of legal clarity.

In April, President Laura Chinchilla said the Las Crucitas case is closed after a court ruled in favor of nearby communities who were affected by the mining operation.

Sala IV’s ruling on Wednesday is the culmination of a dispute that has lasted several years between the company and environmental groups in Costa Rica, who said the mine would cause serious environmental damage, including destruction of primary forest.

The concession would have allowed the extraction of one million grams of gold in the area, a business estimated at the time at some $2 billion. In 2008, the company obtained a mining license after then-President Oscar Arias (2006-2010) and his environment minister, Roberto Dobles, declared the project of “national interest.”

“We want to emphasize that this [Sala IV ruling] only marks the beginning of our legal efforts at the ICSID,” Soto said. “Our company will not leave the country until we are fully compensated.” 

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