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Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America

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World Bank's ICSID appoints Crystallex-Venezuela Las Cristinas tribunal

A tribunal has been named to review the claim of junior miner Crystallex against the Chavez Administration regarding the cancellation of the Las Cristinas gold mine development permit.

Author: Dorothy Kosich

Posted: Monday , 10 Oct 2011

RENO, NV -

The International Centre for Settlement of Investment Disputes has appointed a three-person tribunal to review Crystallex International's claims against the Bolivarian Republic of Venezuela regarding the cancellation of the development permit for the Las Cristinas gold mine.

President Hugo Chavez and his administration are being named in a number of arbitration cases filed before the ICSID, a World Bank subsidiary.

In February of this year, after years of foot dragging, Corporation Venezolana de Guyana sent Crystallex a letter stating the Las Cristinas Mining Operation Contract had been "unilaterally terminated. By March 9, 2011, Crystallex filed with the ICSID.

In June Crystallex said it would seek restoration of the permit, and compensation for interim losses suffered, or full compensation of more than $3.8 billion for the contract cancellation. Las Cristinas is believed to contain 16,862,000 ounces of gold in proven and probable reserves.

On August 11 Chavez announced he was nationalizing Venezuela's gold mining industry.

The ICSUD's website lists 18 pending arbitration cases against Venezuela including Crystallex; Gold Reserve which had its Las Brisas Gold project expropriated by the Venezuelan government in 2009; as well Mobil Corporation and Conoco Phillips for the expropriation of their oil refineries in 2007. Other oil companies agreed to remain as minority partners of state oil company PDVSA. These claims now exceed more than US$14 billion.

Coca-Cola, PepsiCo, McDonalds, Wendy's are among a number of American companies which have seen their assets seized.

Venezuela's laws permit the government to take over private property if fair compensation is provided. However, in many of the expropriation cases, compensation claims have not been settled, prompting the appeals to ICSID.

Ecoanalitica, a Venezuela research firm, estimates the total value seized by the Chavez Administration is more than $23.3 billion. The rate of nationalization since 2007 has soared 924% according to Venezuela's chamber of commerce, Coindustria.

The president of the tribunal considering the Crystallex claim is Laurent Levy. The two other tribunal members are Professor John Gotanda, dean of the Villanova University School of Law, and Judge Florentino P. Feliciano, a former chairman of the appellate body of the World Trade Organization.

Meanwhile, Crystallex also announced that it had received a letter from the Compliance & Disclosure Department of the Toronto Stock Exchange regarding whether or not Crystallex has discontinued a substantial portion of its business and fails to meet TSX's continuous listing requirements.

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