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Australian Company Sues El Salvador Over Gold Mining Permit: Reports

© RIA Novosti. Aleksandr Liskin
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Australian gold mining company OceanaGold is trying to win a legal case against El Salvador over the country's refusal to grant the gold mining permit to the company in light of high pollution rates, The Guardian reported Friday.

MOSCOW, October 3 (RIA Novosti) — Australian gold mining company OceanaGold is trying to win a legal case against El Salvador over the country's refusal to grant the gold mining permit to the company in light of high pollution rates, The Guardian reported Friday.

According to the newspaper, OceanaGold is suing El Salvador for more than $300 million, which is almost half of the country's annual budget.

A stream, contaminated by chemical byproducts of the mining, flows into the San Sebastian River, the country's main water supply, and has a detrimental effect on the environment. The Australian company denies the negative impact.

One of the villages situated by the river suffers a high rate of disease caused by arsenic poisoning that results from the pollution. The government of El Salvador believes the consequences could be even more disastrous for the country's limited drinking water supply, if OceanaGold succeeds in setting up a new gold mine, for only two percent of El Salvador's water is approved by the government to be of good quality.

Should El Salvador win the case, it will preserve a bipartisan policy on mining and the right to make policy in general, being able to protect the country's main water supplies.

However, if El Salvador loses the case, OceanaGold will be able to file a financial claim that will inflict a significant financial damage on the country.

OceanaGold is expected to be presented today with a petition signed by 200,000 opponents to its attempts to force gold mining in El Salvador.

Tags:
El Salvador, mining industry, court, gold
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