Tambogrande update: the arbitration is on
Published by MAC on 2004-11-22
Tambogrande Update - November 22, 2004
From: CooperAccion, Peru
Where were we?
On February 16, Manhattan announced that it would commence arbitration proceedings regarding Centromin's decision that the company has lost its right to an interest in the Tambogrande project. The Mesa Técnica, a group of NGOs that provides technical advice to the Tambogrande Defence Front, argued that Manhattan's attempt to initiate arbitration was unlikely to be successful. Under the option agreement for the project, Manhattan had just thirty days to initiate the proceedings following Centromin's decision of December 10, 2003. Manhattan announced its intention to initiate arbitration on February 16, 2003 - well outside the thirty-day window.
Based on this information, Francisco Ojeda, Mayor of the District Municipality of Tambogrande, formally requested that the Ministry of Energy and Mines terminate the environmental assessment evaluation process for the project.
The arbitration is ON
On August 26, 2004, the General Director of Environmental Issues at the Ministry of Energy and Mines, Julio Bonelli, replied to Mr. Ojeda's request. Unbeknownst to the public, Manhattan wrote to Centromin on January 8, 2004 (within the thirty-day period for initiating arbitration), advising the latter that it considered the arbitration to be activated. According to Mr. Bonelli, the arbitration officially began on August 26, 2004.
The arbitration concerns Centromin's decision that Manhattan failed to satisfy qualifying conditions under the project's option agreement. It seems clear that Manhattan did not fulfill those conditions by the December 1, 2003 deadline. There was speculation at the time that the company would argue that it was unable to meet the conditions by reason of force majeure. However, in his letter, Mr. Bonelli identifies the question that Manhattan seeks to have resolved through arbitration. The option agreement establishes a procedure that is to be followed in cases of alleged noncompliance. Manhattan claims that Centromin failed to properly execute this procedure. The company argues that until this procedure is put into effect, the company's rights under the agreement remain unaltered.
The public is CUT OUT
As identified in the option agreement, the arbitration is being overseen by the Arbitral Tribunal of the National Institute of Mining, Petroleum and Energy - part of the National Society of Mining, Petroleum and Energy (SNMPE), the Peruvian industry lobby organization. Despite repeated requests, the public, including the population of Tambogrande, has received virtually no information about the process.
In the meantime, Manhattan appears to be in serious trouble - its stock is currently selling at CDN$0.10 on the TSE. Prior to the 2002 referendum the stock was valued at CDN$1.78.
Last week the company issued a press release announcing the acquisition of new financing which it plans to use either to sell its Peruvian interests or to establish a joint venture.
CooperAccion
Jr. Berlin 1353
Miraflores, Lima, Peru
tel: 444-0316
fax: 445-0908
Extra note c/o MAC - Meanwhile a Canadian "renewable energy" company, Solar Energy, has signed an initial agreement with Manhattan Minerals to acquire its Peruvian properties. At first sight it seems bizarre that a "green" company would want one of the most widely-condemned mining projects in Latin America - unless it has a hidden agenda. There are historical precedents (e.g. coal companies in the US buying up mine leases to use as municipal waste dumps; or Waste Inc. of the US making a bid during the early 1990s for the abandoned Bougainville mine). But if Solar thinks the Tambogrande community will approve of its moves, it surely has another think coming.