TORONTO (miningweekly.com) – Vancouver-based Rusoro Mining on Thursday filed a $3.03-billion claim in its arbitration against the Bolivarian Republic of Venezuela before the World Bank's International Centre for Settlement of Investment Disputes (ICSID).
The Russian-owned company filed the claim under the provisions of the Canada-Venezuela Bilateral Investment Treaty (BIT) for compensation over the nationalisation of the company’s gold assets in 2011.
The late President, Hugo Chavez had put large parts of Venezuela's economy under State control and was targeting the gold industry after his government quarrelled with foreign companies that complained about State-enforced limits on how much gold they could export, which was hurting their efforts to secure financing and develop projects.
Chavez had decreed that half of all gold production had to be sold to the central bank, which some companies said made it much harder for them to get financing abroad, develop projects and create jobs.
The country faced several claims for compensation, after it nationalised gold mining in August 2011. However, it had, by February 2011, already expropriated Las Cristinas from Canadian miner Crystallex, which had tried to develop the mine since 2002, after it had been confiscated from Canada-based Vanessa Ventures, in November 2001. Crystallex had sued Venezuela at the ICSID for $4.3-billion.
The country also faced multibillion-dollar claims by US oil companies Exxon Mobil and ConocoPhillips.
Toronto-listed Rusoro, owned by Russia's Agapov family, was the only large gold miner operating in Venezuela. It produced about 100 000 oz of gold in the country during 2010, and about 80 000 oz in 2011.
Rusoro's claims alleged violations by Venezuela of several guarantees of the Canada-Venezuela BIT, under which it counted expropriation of its investments in Venezuela without adequate compensation; failing to accord to its investments fair and equitable treatment and full protection and security; as well as failing to guarantee Rusoro the unrestricted transfer of its investments and returns in Venezuela.
"The filing of the statement of claim represents a significant milestone in the arbitration process and we firmly believe in our case and the pursuit of fair-value compensation for the loss of our significant investment in Venezuela,” president and CEO Andre Agapov said.