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EuroGas almost doubles compensation claim against Slovakia

EUROGAS is upping its claim in the ongoing dispute with Slovakia for taking a talc quarry site in Gemerská Poloma in Košice Region away from the company, the TASR newswire reported.

EUROGAS is upping its claim in the ongoing dispute with Slovakia for taking a talc quarry site in Gemerská Poloma in Košice Region away from the company, the TASR newswire reported.

Instead of the initial sum of $1.65 billion (€1.18 billion), the company is now demanding nearly double that - $3.2 billion.

According to EuroGas board chairman Wolfgang Rauball, the new calculation is due to a re-evaluation of deposits in Gemerská Poloma.

"The current owner of the deposit – the company Eurotalc - estimated the deposits in 2012 to be enough for 80 to 100 years of extraction. Based on this information, we've increased the qualified estimate of a loss we incurred by the taking away of the quarry site from us," said Rauball, as quoted by TASR.

EuroGas representatives should meet with Finance Ministry officials to look into the possibilities of settling the dispute in the next few days, TASR wrote.

Rauball says EuroGas has new proof at its disposal that Rozmin, a subsidiary of EuroGas, lost the quarry site in 2004 in contravention of the law. He said that the company has come into possession of several documents, pieces of information and correspondence that confirm that the taking away of the quarry site was a targeted corruption initiative and involved bribery vis-a-vis then Economy Ministry officials, including erstwhile minister Pavol Rusko, TASR reported.

According to Rauball, the new evidence has been obtained from one of the world's largest producers of talc. He declined to provide the producer's name, however.

"Unless an out-of-court settlement with Slovakia's representatives is reached, we'll submit this evidence, including its source for arbitration at the International Centre for Settlement of Investment Disputes in Washington," said Rauball, as quoted by TASR.

Slovakia received an ultimatum from EuroGas to address EuroGas's moves by January 31, 2014. Shortly before the deadline, the Finance Ministry sent a letter to the company in which, according to Rauball, Slovakia demonstrated a willingness to settle the dispute. As a result, the threat of arbitration has been averted for now.

EuroGas has been indicating its plans to take legal action against Slovakia since 2010. Its subsidiary Rozmin claims that the Slovak authorities illegally deprived it of the quarry deposit in Gemerska Poloma. Rozming has been engaged in a multi-year dispute concerning mining rights with a company called VSK Mining. This company has invested in the mining site since 2008 based on a decision of the District Mining Office in Spišská Nová Ves (Košice Region).

At first, in 2011, EuroGas demanded compensation of €500 million. One year later, a company called EuroGas Inc., registered in the US, also began claiming compensation. The overall amount has climbed to $1.65 billion. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the US from 1991 have been violated. The Slovak Finance Ministry last year denied that any agreement had been broken.

The talc deposit in Gemerská Poloma was discovered accidentally during a search for tin in 1985. The talc from the deposit has high levels of purity, with experts viewing it as one of the most important ones in the world. The largest producer of talc worldwide is China, but significant deposits are also located in the US, Brazil and India, while Finland is a significant producer in Europe. In view of the wide-ranging options for the industrial use of talc, mainly in the pharmaceutical, chemicals, cosmetics and paper industries, demand for this raw material is steadily rising on the market.

Source: TASR

Compiled by Michaela Terenzani from press reports.
The Slovak Spectator cannot vouch for the accuracy of the information
presented in its Flash News postings.

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