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Home Business Foreign Business Australian-Canadian miner ordered to pay interest to El Salvador

Australian-Canadian miner ordered to pay interest to El Salvador

 

SAN SALVADOR: A giant Australian-Canadian gold mining group, OceanaGold, has been ordered to pay interest on $8 million in legal costs awarded to El Salvador over a lawsuit it lost, Salvadoran officials said Tuesday.

The World Bank’s arbitration arm, the International Centre for Settlement of Investment Disputes (ICSID), handed down the order against OceanaGold, El Salvador’s prosecutor’s office said in a statement.

In October 2016, El Salvador emerged victorious from a seven-year claim lodged OceanaGold’s subsidiary Pacific Rim Cayman claiming that the Central American country owed it $250 million for refusing to give it a mining permit on environmental grounds.



The Washington-based ICSID at the time had told OceanaGold to pay El Salvador’s $8 million in legal fees spent to defend the action.

But El Salvador’s prosecutor’s office said the mining company did not pay that sum, arguing that the ICSID had not ruled on whether interest was included.

With the latest ruling, the company “is required to pay immediately” or else the related debt “could increase by two to five percent per month,” the statement said.

The legal dispute was started in 2009 by Pacific Rim before it was bought in 2013 by OceanaGold. It argued it was owed compensation after investing $77 million to discover gold and silver deposits in El Salvador.

The country had initially authorized mining, but then canceled it and declared a mining moratorium to prevent pollution of one of its main rivers.

 

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