On September 25th, while announcing its enviromental permit approval for its Corani project, Bear Creek Mining (BCM.v) said this:
Mr. Swarthout continues “We are also encouraged by recent conversations
with the Peruvian government towards the resolution of issues regarding
the Santa Ana silver project, which remains under the conditions of the
Supreme Decree issued in June 2011. The successful resolution of these
issues and returning Bear Creek’s right to operate Santa Ana is
critical to the Company’s ability to raise financing for the
construction of Corani. Based upon the successful acquisition of the
social license through long-term community investment agreements at
Corani, we strongly believe that the model has been demonstrated that
will establish social license at Santa Ana. We look forward to working
with the government and local communities in reaching a resolution
thereby avoiding ongoing and future litigation while providing the
opportunity for advancing Santa Ana and providing much needed
employment, investment, and revenues in those local communities.”
Now, via a report in Peruvian press this morning and using Canada as its shield-and-sword, it says this:
“Canada is considering taking the case of Bear Creek Mining to the ICSID World Bank tribunal court, after learning that on November 1st the country gave the backing to the use of international arbitrage, the Expreso has learned from sources close to the bilateral negotiation.This first ever case involving Canada in ICSID, and probably the most important one to involve Peru, concerns to the legal action that exists between the Canadian company Bear Creek Mining and the State of Peru, over the Santa Ana project in the South of Peru.”
And here’s how the share price has been doing since this policy was announced:
Yeah, you had a few people fooled on this for a while, Swarthout. Not no more.
So anyway, let’s go over this great idea. The plan is to start an international incident between Canada and Peru over a mining project, right at the time that anti-mining sentiment is on the rise in Peru, when Canada is desperate for new markets to develop and when China, South Korea, Australia, Brazil and others are making aggressive inroads into the country’s sectors and giving lie to Canada’s previous supposition that it was the only game in town. And BCM, by tying the fate of Santa Ana to its Corani project directly, has decided to add risk to its de-risked project.
Let’s be clear: BCM’s September 25 decision to link, and in a very clear and public manner, the fate of the very interesting, approved and de-risked Corani project to the never-gonna-happen* Santa Ana project, stating de-facto to Peru that “without the one, you don’t get the other” and then threatening Peru with a full-on country-versus-country dispute (ferfuksek) to take the people you need to for Corani’s ultimate success to the world tribunal courts over Corani, at a time like this for the metals markets, is the type of tactic used by a company that has No. Fucking. Idea. about the country in which it operates (after all these years, too) and is a prime candidate for the 2013 Dumbest Corporate Strategy of the Year Award.
*told you enough times on this.