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Mining.com | 26 April 2020
UN tribunal rules against Canada’s Edgewater in legal battle with Spain
by Valentina Ruiz Leotaud
The United Nations Commission on International Trade Law (UNCITRAL) ruled against Canadian company Edgewater Exploration (TSX-V: EDW) in its long-standing legal battle with Spain related to the Corcoesto gold project in the northwestern region of Galicia.
This week, UNCITRAL dismissed Edgewater’s pretensions to recover the $35 million it had invested in Corcoesto prior to the project being denied permission by the Galicia Regional Government, known as Xunta.
“The company’s wholly-owned subsidiary, Corcoesto S.A. had commenced arbitration in 2016 under the Spain-Panama bilateral investment treaty and the UNCITRAL Arbitration Rules (1976). Following a hearing in Paris, France during April 2018, the Tribunal rejected, unanimously, four jurisdictional objections by Spain but upheld, by majority in a 2 to 1 decision, one jurisdictional objection by Spain and dismissed the claim on that basis. The dissenting arbitrator opined that the majority’s decision erred in both law and fact and that the Tribunal did have jurisdiction and should have decided the merits of the claim,” the Vancouver-based miner said in a media statement.
Edgewater added that the recent dismissal of the entire claim is a disappointment and that the company and its subsidiary are “considering avenues for legal redress, including an annulment proceeding in the French courts.”
This is how it all started
After purchasing the Corcoesto project in 2010 and having its environmental impact declaration approved by the Xunta in 2012, Edgewater completed a series of drilling programs, and technical studies designed to advance the project, upgrade and expand the mineral resources, and evaluate the economics.
Gold at Corcoesto was first exploited by the Romans. In the last decades, Sagasta Gold, Aurifera Gallega, Rio Tinto Minera, Rio Narcea Gold Mines and Kinbauri Gold have been active in the area
The plan forecasted a 9.9-year mine life and a total output of a little over 1 million ounces of gold. The heap-leach, open-pit operation would use cyanide to extract the yellow metal, something that caused alarm among environmentalist groups.
According to the EID, the operation’s annual waste production would be 2.1 million tonnes, of which 2 million tonnes would be floatation waste and 100,000 tonnes would be leaching. The estimated total of waste production was to be 17,080,751 tonnes during the mine’s working life.
Following the approval of the proposal, the Xunta went back on its decision and said it would not green-light the mining project unless the Canadian company fulfilled a number of environmental, technical and financial requirements not contemplated in its plan.
A legal battle ensued. In 2015, the Galicia government announced that the mining concession had expired and it would not be reopening the adjudication process, something that Edgewater considered illegal and a violation of international law.
Later on, the Galician Superior Tribunal of Justice ruled that the mine could not go forward because the project lacked financial and technical solvency, a decision that was backed by Spain’s Supreme Tribunal in 2019.
The latter decision was the one that led Edgewater to seek arbitration from UNCITRAL.