Stans Energy awarded $24 million in arbitration with Kyrgyz Republic
Canadian junior Stans Energy (TSX-V:HRE) has won a battle in a long dragged-case against the Kyrgyz Republic, which in 2014 revoked the company’s mining licenses for a former rare earth mine and nearby property, claiming the acquisition process of those assets had been tainted.
The arbitration tribunal, said the company, determined that Stans prevailed on jurisdiction and on the merits of its claim against the Kyrgyz government. It also awarded Stans about $24 million in compensation for damages, interest and costs, a figure well short of the $219 million Stans had been seeking.
The case revolved around the company’s 20-year mining license for the past-producing Kutessay II open pit rare earth mine, which the junior acquired in 2009, as well as the rights to the Kalesay property.
After the licences were withdrawn, Stans filed a lawsuit against the Kyrgyz government, demanding $118 million plus interest in compensation.
While the Toronto-based company won that trial, it has never been able to get the money, due to a series of legal loopholes, including a Moscow-court decision to hold off the millions Stans Energy was expecting.
The miner’s efforts to enforce a separate arbitral award were rejected twice by Canadian courts, which prevented Stans from seizing assets belonging to state-owned company Kyrgyzaltyn JSC.
For over 30 years, Kutessay II produced 80% of the rare earth metals for the Former Soviet Union.