A multi-year legal tangle between the government of El Salvador and Vancouver-based Pacific Rim Miningis expected to be settled next year.
The controversy dates back to 2008 when the government refused to authorize Pacific Rim to begin mining operations. The company, a subsidiary of Australia’s multinational gold producer OceanaGold (TSE, ASX: OGC), launched a $315 million damage claim against El Salvador claiming that the government failed to issue the necessary mining licences for the company’s El Dorado gold project.
An agency of the World Bank, the International Centre for the Settlement of Investment Disputes, will be hearing the case.
The tribunal will determine if the government of El Salvador has broken investment laws by refusing to issue the permits. Had there been a breach, the tribunal will also decide how much compensation is merited.
The company stated the arbitration is in its final, merit-based phase and a decision is expected after the submissions and testimonies.
Pacific Rim is not the only Canadian mining company El Salvador is fighting against.
The government of El Salvador is also pushing for a halt of Vancouver-based Goldcorp’s (TSX: G), (NYSE: GG) Cerro Blanco gold-silver project in southern Guatemala over water contamination concerns. The government claims the mine will greatly endanger the water quality in the Lempa River, which supplies not only to Guatemala but also to Honduras and El Salvador.