Canada’s Gold Miner Taking Colombia To Court For $700 Million
Canadian miner Gran Colombia Gold (TSE:GCM) has filed a $700 million lawsuit against Colombia under the Colombian-Canadian free trade agreement, the Financial Post reported.
The mining company is looking to get compensation after the South American nation forced it to suspend operations at the Marmato project until further consultations have been conducted with the locals.
Gran Colombia claims in its lawsuit that Colombia “failed to evict illegal miners from their sites of operations in Marmato and Segovia, and didn’t stop the Marxist armed guerrilla group, the ELN, from interfering with their efforts to extract gold in the province of Antioquia,” according to the media report, which noted that most of the suit’s details were confidential.
The company also allegedly said that the South American state did not maintain public order and did not help calm strikes and riots, which led to property damage.
Local residents are said to be against the miner’s plans to flatten a mountain and create an open pit mine.
Gran Colombia encountered many obstacles at the Marmato site, which was acquired in 2011, including unsuccessful attempts of removing illegal miners from the area. Illegal mining is fairly widespread in the country, and is estimated to be a US$2.5 billion industry, according to various online reports.
The site’s resources are estimated at around 14 million ounces of gold and almost 90 million ounces of silver, with additional 300 million tonnes of more potential mineralization discovered in 2012.
The Colombian government is also fighting lawsuits from other miners, including South African miner AngloGold Ashanti, which can’t obtain stable access to its La Colosa site that contains 33 million ounces of gold.
According to the law, Colombia’s Ministry of Commerce has six months to resolve the issue with the company. If it fails, the lawsuit gets sent to the Arbitration Committee of the World Bank.