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EuroGas sues state for USD3.2 billion over halted talc mining
26 Jun 2014 Flash News
US company EuroGas has sued Slovakia and in an international arbitration, for compensation amounting to USD 3.2 billion US dollars (€2.35 billion), the Austrian Die Presse daily wrote.
The lawsuit has concerns a big, lucrative deposit of talc in Gemerská Poloma. On June 25, EuroGas filed a lawsuit against the Slovak Republic before the International Centre for Solving Investment Disputes (ICSID) of the World Bank (SB) in Washington. The company asked for a compensation of marred revenues that it would have, if the mining of talc started in 2007 as originally planned, as calculated by the KPMG auditing company. Experts opine that the specific damage can be calculated at €200 million.
So far, Slovak government has not commented on the case more in detail; and the Finance Ministry told Die Presse that it does not know about the lawsuit.
EuroGas got the mining license for talc in 1998, but in 2005, it was withdrawn. The Austrian daily commented that the case shows doubtful steps in the transition period after the fall of communism. Finally a mail-box company part of the the Austrian Schmid-Holding (SIH) company acquired the license and has since then invested about 30 million euros in the deposit. Company head, Robert Schmid, stressed that the case has no direct connection to SIH, but can negatively impact its business.
Slovak Supreme Court ruled twice that it was unlawful to withdraw the mining license of EuroGas. The threat of suit made Slovakia show readiness to negotiate a compromise, and Finance Ministry state secretary Peter Pellegrini allegedly travelled to Vienna in April to meet secretly representatives of EuroGas; but no agreement was reached.
EuroGas has been threatening with arbitration since 2010, and in 2012, the EuroGas Inc., registered in the US, has joined the suit, according to the TASR newswire. EuroGas cited the violation of rights stemming form the treaty between then Czechoslovak Federative Republic and the US from 1991 concerning protection of investments; however, Slovak Finance Ministry last year denied any violation of the treaty.
The talc deposit in Gemerská Poloma was discovered by chance in 1985, and thanks to the raw material’s good quality and purity, it is considered one of the most important in the world.
(Source: Die Presse, TASR)
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