Crystallex files for arbitration over gold project in Venezuela

Crystallex International Corporation has filed a request for arbitration against the government of Venezuela, and is seeking over US$3.8 billion in damages over a revoked mine contract.

Toronto-based Crystallex filed the request before the World Bank's International Centre for Settlement of Investment Disputes. The company claims the government of Venezuela unlawfully terminated the Mine Operation Contract and failed to propose any resolution to the dispute over the Las Cristinas gold mine.

The company is seeking restitution from the Venezuelan government as a result of losses to Crystallex's investments.

The dispute appears to centre around whether enough had been done to advance the Las Cristinas gold project. The Venezuelan government claims the contract was terminated due to "Crystallex's lack of activity to progress the Las Cristinas project for more than one year" and "for reasons of opportunity and convenience," according to a report from Mineweb. The company responded that it has "fully complied with all its obligations under the MOC and has advanced Las Cristinas to a shovel-ready state while awaiting the issuance of the Authorization to Affect Natural Resources…from the Ministry of Environmental and Natural Resources."

Crystallex had been trying for nearly three years to develop Las Cristinas, which was expected to produce between 290,000 and 460,000 ounces of gold annually.