Mexico in new mining dispute: Canadian company demands 200 million dollars from the government

The Canadian mining company Almaden Minerals, which operates in Mexico under the subsidiary Minera Gorrión, has initiated an international arbitration procedure against the Government of Andrés Manuel López Obrador, claiming compensation of 200 million dollars for the economic damages caused by the cancellation of mining concessions for exploitation in Ixtacamaxtitlán, in the Sierra Norte of Puebla.

Almaden Minerals points out that since March 14, it notified the Government of its intention to file a claim for violations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

What is the reason? The company claims that in 2022, the Ministry of Economy cancelled two concession titles for the extraction of minerals in the project called Ixtaca.

“The damages that we have estimated are no less than 200 million dollars, but as the procedure progresses, an expert will present a professional report on the assessment of damages to the Arbitration Tribunal,” the firm explained.

Mexican scientist identifies key mineral in insomnia problems
The arbitration process is still in an early stage, so this figure is just an initial estimate.

For Almaden Minerals, the Government of Andrés Manuel López Obrador committed different violations to its project that covered 14 thousand hectares and at least an 11-year useful life.

“Mexico violated the obligations required by the CPTPP and that blocked the development of the Ixtaca project, from which the mining concessions that the company obtained in 2003 and 2009 were finally rescinded retroactively, causing the loss of our investments in Mexico,” said Duane Poliquin, president of Almaden Minerals in a document dated June 17.

The director added that the Ixtaca project was expected to generate benefits for the population of the Sierra Norte of Puebla, since it contemplated the development of infrastructure; the creation of more than 600 jobs, and the delivery of economic contributions for more than 180 million dollars in federal, state and municipal taxes.

Why was the Gorrión Mining project cancelled?

In 2001, the Gorrión mining company began to carry out exploration work and after confirming the presence of gold and silver, the inhabitants of the Tecoltemic ejido, located 8 kilometers from where the company planned to develop the project, sought to stop the project under the argument that it would cause environmental damage in the region.

In 2015, the inhabitants of the Tecoltemic ejido filed an injunction to revoke the concessions granted by the Government of Mexico to Minera Gorrión, a subsidiary of the Canadian firm, but it was not until 2022 when the ministers of the First Chamber of the Supreme Court of Justice of the Nation (SCJN) granted an injunction to the ejidatarios to render the concession titles void.

This is not the only problem the Mexican government has with mining companies: Last month, it became known that Ganfeng Lithium Group, a Chinese conglomerate, filed an arbitration claim because the General Directorate of Mines cancelled nine concessions related to lithium extraction.

Source: elfinanciero