Almaden files arbitration request against Mexico claiming at least US$200mn
Almaden Minerals began arbitration proceedings against Mexico with the International Centre for Settlement of Investment Disputes (ICSID) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The Vancouver-based miner alleges that Mexico has breached its obligations under the CPTPP through actions that blocked the development of its Ixtaca gold-silver project in Puebla state and retroactively terminated the company’s mineral concessions, causing Almaden to lose its investments in the country.
Subsidiary “Almadex Minerals, on behalf of themselves and their Mexican subsidiaries, and based on a preliminary estimate, will be seeking damages of no less than US$200mn, in the aggregate,” the company said in a statement on Monday.
According to the statement, Almaden initiated the six-month consultation period required under the CPTPP on December 13, 2023. The company said that Mexico agreed to hold one consultation meeting on May 30 but it did not result in an amicable resolution of the dispute.
On March 14 this year, the company filed notice of its intention to submit a claim to arbitration against Mexico under the CPTPP, triggering a 90-day notice period before filing the request with ICSID.
“This is clearly not a desirable outcome for our tremendous discovery back in 2010. With the announcement of the feasibility study in 2018, the Ixtaca project was poised to become a significant success for shareholders, local communities, and Mexico,” said Almaden’s chair, Duane Poliquin.
He said the company followed best international standards and practices, including the adoption of dry stack filtered tailings, ore-sorting, and water management plans that could have improved water availability for local communities.
“We are problem solvers and sought to resolve each challenge presented by Mexico, up until the point the Mexican government canceled our concessions. This leaves us with no alternative but to pursue international arbitration. We regret this outcome for shareholders, who may still see some benefit from the discovery as we pursue this arbitration,” Poliquin added.
Alberto Vázquez, a lawyer and expert in mining issues, said the company has the right to request arbitration, but what would follow, in his opinion, would be a national ‘eviction trial’.
“Subsequently, it should be a procedure via the NAFTA or the USMCA, in accordance with the investment conditions, but also observing all the procedures or the legal and administrative action that both the company and the authorities may have incurred,” he told BNamericas.
Eviction occurs when a final judicial or administrative ruling deprives a party of a right granted.
The project
Almaden discovered the Ixtaca project in 2010 and completed a feasibility study on the project, filing the technical report in 2019.
The miner expected average annual production of 108,500oz gold and 7.06Moz silver over the first six years.
“Had the project proceeded, economic contributions were estimated to include approximately 600 direct jobs during the peak of construction and 420 jobs throughout the 11-year mine life. Assuming base case metal prices, the project could have generated approximately US$130mn in federal taxes, US$50mn in state taxes, and US$30mn in municipal taxes and provided updated infrastructure to a marginalized region,” the company said.
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