The Infinito Gold Ltd. v. Costa Rica case was an international arbitration proceeding initiated on March 4, 2014, and concluded on July 15, 2024. It consisted of a claim filed by the Canadian mining company Infinito Gold Ltd. (IGFFF) against the Costa Rican State before the International Centre for Settlement of Investment Disputes (ICSID). The proceeding reference was ICSID Case No. ARB/14/5, and the official case name was Infinito Gold Ltd. v. Republic of Costa Rica.
Infinito Gold sued Costa Rica for an amount initially set at US$94 million, but which was ultimately increased to US$400 million. The claim was based on the Agreement between the Government of the Republic of Costa Rica and the Government of Canada for the Promotion and Reciprocal Protection of Investments, signed on March 18, 1998, and which entered into force on September 29, 1999; and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on October 14, 1966.
The company sought to open an open-pit gold mine in the town of Crucitas de Cutris in the Alajuelan San Carlos canton through its subsidiary, Industrias Infinito Sociedad Anónima. The company obtained an exploration permit and attempted to develop the project. However, in the meantime, Costa Rica adopted policy measures to prohibit open-pit metallic mining. Furthermore, judicial proceedings were initiated in the local jurisdiction to overturn the mining concession granted to the company, alleging the existence of multiple illegalities in the granting of permits.
On June 3, 2021, after seven years of proceedings, the ICSID ruled in favor of Costa Rica and denied Infinito Gold Ltd.'s claims for compensation. It also ordered the parties to bear 50% of the procedure costs and their respective legal fees and other costs.
On October 18, 2021, Infinito Gold filed an application for annulment of the award. The ICSID constituted an ad hoc committee to study it on January 6, 2022. On May 2, the annulment proceeding was suspended due to the company's non-payment of the required advances in accordance with the ICSID Administrative and Financial Regulation, and it was resumed on November 2 once the financial obligations were fulfilled. On July 15, 2024, the ad-hoc committee declared the annulment proceeding closed following a request for discontinuance filed by Infinito Gold.
Background Mining in Costa Rica Mining in Costa Rica became a significant economic activity in the mid-19th century when Costa Ricans sought to penetrate the world market in an attempt to overcome colonial isolation. From then on, this activity, together with non-metallic mining, especially of construction aggregates, sugarcane, tobacco, and coffee, became predominant productive factors for the country.
Costa Rica has significant mineral resources such as calcium carbonate, silica, sulfur, manganese, bauxite, diatomite, iron, silver, and gold, among others. However, open-pit metallic mining has been prohibited since 2010, and only underground metallic mining is permitted. Additionally, the cantons of Abangares, Golfito, and Osa were reserved for subsistence and small-scale mining, according to Law 8904. Within this law, there was a transitory provision that allowed artisanal miners to use mercury in gold recovery until 2019.
Despite the moratorium on open-pit mining for metallic minerals, coupled with the transitory provision on mercury use in gold recovery, there are four regions in the country with activity related to this mineral.
In the Chorotega Region, specifically in Abangares canton, there are five exploration concession applications, three valid exploitation concessions, and one processing plant known as "Planta La Luz". However, none of these are active, and therefore, there are no production reports. Despite the above, there are unofficial data of a total production of 700 kilograms of gold, considering a substantial reduction in active informal miners compared to the previous period, as there is a migration towards the Crucitas sector.
In the Central Pacific Region, specifically in Montes de Oro canton, there are 11 exploration concession applications, two of which are active, in addition to three valid concessions known as "Toyota", "La Unión", and "Bellavista".
In the Central Region 2, specifically in San Ramón canton, the "Mina Moncada" and "Mina Chassoul" have the exploration and exploitation stage enabled; however, only the latter reports the prospecting activities carried out. The plant was inaugurated and started up, reporting good production results in the doré obtained, with average gold and silver contents of 80% and 10% respectively.
Finally, there is the Huetar North Region, which remains active due to the invasion situation in the area that was the subject of the Crucitas project by the company Industrias Infinito. In an updated economic assessment carried out by the sub-director of the Directorate of Geology and Mines together with the regional coordinator, analyzing the affected areas, it was found that other farms were impacted in an effective area close to 11 hectares, and the estimated production exceeds 2400 kilos of gold.
Infinito Gold Ltd. Infinito Gold Ltd. is a Canadian mining company engaged in mine exploration and exploitation in Venezuela, Guyana, and Brazil. It also had operations in Nicaragua and attempted to operate the "Crucitas Mine" in Costa Rica through its subsidiary Industrias Infinito S.A.
The company's shareholders were Exploram Enterprises Ltd. and Auro Investments Ltd. Exploram is in turn owned by Coril Holdings Ltd., whose owner is Ronald Mannix, one of the wealthiest men in Canada with a fortune exceeding US$3 billion, and who controlled more than half of Infinito Gold's shares. The board of directors was composed of John Morgan as president and chief executive officer of the company, Steven Dean as chairman of the board, John Thomas as vice president of operations, and John Amundrud, Fred Peschke, and George Chapel as member directors.
In October 2008, the Arias Foundation for Peace and Human Progress of President Óscar Arias Sánchez confirmed to the newspaper La Nación that Mannix had offered to make a donation of US$250,000. The Costa Rican daily revealed the offer only in April 2011, after one of its journalists handed the document from the Foundation confirming the offer to the Attorney General's Office, which led to the opening of a criminal investigation. In July 2019, the case was dismissed by a trial court.
On January 7, 2010, the mining company reported that Exploram Enterprises and Auro Investments had waived for the sixth time the declaration of payment default by the company for over US$50 million in bonds, pending a ruling from the Constitutional Chamber of the Supreme Court of Justice on the mining project in Costa Rica.
On February 12, 2010, Infinito announced the signing of an agreement to continue mining exploration in an area of 25,000 hectares in Nueva Segovia, Nicaragua, located near the Chachagua River. It also announced an investment of nearly US$5 million over 51 months in exploration tasks, social programs, and payments to the concession holder.
On February 20, 2013, the company announced the sale of its mining processing assets in Costa Rica to the Colombian company Zandor Capital S.A. for US$4 million, citing the impossibility of using them in Costa Rica after losing the mining concession due to a ruling by the Administrative Dispute Court of that country. Following the decision to sell its equipment, the Canadian stock exchange announced that Infinito Gold no longer met the TSXV's Tier 1 continued listing requirements, thus downgrading it to Tier 2. Infinito Gold's shares fell from US$1910 on May 19, 2002, to US$0.123 on November 21, 2010, following the first court ruling in Costa Rica that stripped it of its concession.
In December 2014, the company received a loan of US$250,000 from its main shareholder to maintain stability in its financial statements while awaiting an arbitration victory against Costa Rica in international instances. However, in July 2015, Infinito Gold announced it was declaring bankruptcy after its main financier said it would no longer transfer funds to the company, the members of the Board of Directors resigned from their positions, and after recording a deficit of over US$160 million. Erich Rauguth was appointed interim president of the company and reported that the company's sole purpose would be to seek compensation for its failed business in Costa Rica, as they were left with no assets to operate. Rauguth died in Canada on October 20, 2021.
Crucitas mining project
Industrias Infinito obtained an exploration permit for the Crucitas area in 1993, which was extended until September 18, 1999. Between 1993 and 2000, the company carried out drilling and studies to determine the existence and size of potential gold deposits, conducting a pre-feasibility study in 1996 and, three years later, a feasibility study that demonstrated the existence of gold deposits in a considerable area of Crucitas. On December 13, 1999, the company submitted an application for a mining concession to the Directorate of Geology and Mines of Costa Rica in an area of 10 square kilometers in Cutris, which was granted on December 17, 2001.
On June 12, 2002, a national moratorium on open-pit metallic gold mining came into effect through Executive Decree No. 30477-MINAE, signed by then-President Abel Pacheco de la Espriella. It stipulated that all pending procedures related to mineral exploration and exploitation before the Directorate of Geology and Mines and the National Environmental Technical Secretariat (SETENA) as of the decree's publication date were to be suspended, and that any rights acquired before the decree's publication would be respected. Despite President Pacheco's decree, neither the Ministry of Environment, SETENA, nor the Directorate of Geology and Mines suspended the procedures for granting the environmental viability permit to the company Industrias Infinito.
On November 26, 2004, the Constitutional Chamber of the Supreme Court of Justice upheld a constitutional remedy (recurso de amparo) against the granting of the mining concession, stating that there had been a violation of Article 50 of the Costa Rican Political Constitution because the concession was granted without a prior environmental impact study and because the resolution signed by then-President of the Republic, Miguel Ángel Rodríguez Echeverría, and the Minister of Environment and Energy, Elizabeth Odio Benito, which granted the concession for the exploitation of gold, silver, copper, and associated minerals, was "unconstitutional" due to violation of the precautionary principle and the constitutional right to enjoy a healthy and balanced environment.
On December 12, 2005, SETENA granted environmental viability to the Crucitas mining project for a total area of 305.90 hectares, a plan for mineral extraction from the surface layer or saprolite in plots of 21 hectares each year until completing six plots, and for a period of 10 years including 18 months of construction, six years of operation, and 18 months for the technical closure of the project. Industrias Infinito intended to process the material in a gravimetric circuit and subsequently proceed to the chemical process through cyanidation tanks in a closed circuit. Their estimate was to produce 4,000 tonnes of material daily to extract 90,000 troy ounces of gold per year (approximately 3,000 kilograms of gold per year).