Swiss giant Glencore files new arbitration claims against Colombia

Swiss mining giant Glencore has filed arbitration claims against Colombia over disputes related to the Cerrejón coal mine and the Puerto Nuevo port project, according to a report presented this week by Colombia's national agency for legal defense of the state (ANDJE).

Although the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) has not yet published the details of the claims, ANDJE director Camilo Gómez said in a broadcast presentation that both claims are in the early phase, so the amounts the firm is demanding are not yet known.

The official said that the miner alleges that Colombia has violated the agreement for promotion and reciprocal protection of investments (APPRI) signed with Switzerland. 

PUERTO NUEVO

The Puerto Nuevo project in Magdalena department was started in 2010 and a first claim was made in 2019 after an investigation conducted in 2016 by Colombia’s trade and industry superintendency due to alleged infringements of the free competition regime, having created a alleged monopoly for coal shipment, as reported El Tiempo daily at that time.

CERREJÓN

No details have yet been revealed of the latest arbitration claim regarding the Cerrajón mine, but ANDJE director Camilo Gómez said: “We have held talks to reach a direct agreement regarding the matters presented by three stakeholders of Cerrejón, but the claimants decided to go ahead with the process.”

The arbitration related to the mine comes after a 2016 claim made due to the expropriation of the Calenturitas coal mine concession.

Glencore and its subsidiary Prodeco were seeking US$575mn in compensation, but in 2019 ICSID rejected the company’s claim while ordering Colombia to repay a US$19mn fine it levied on Prodeco. This was followed by an application for annulment of the award in October of that year, with a hearing on the annulment held last November.

According to the ICSID website, the annulment proceeding was registered on December 30, 2019, the evaluation committee was constituted on March 6, 2020 and each party filed a statement of costs in November.

In February this year, Glencore decided to hand back its Prodeco coal concessions at the Calenturitas and La Jagua mines, stating that it was not economically feasible to restart operations that were halted due to the health crisis.

Mining and energy minister Diego Mesa has publicly said that Asian investors may be interested in those concessions, but in April the national mining agency (ANM) said in a statement that Glencore’s return requests are “legally inviable” due to environmental obligations that must be met before the concessions are returned.

During 1Q21, ADNJE has participated in 636 claims, which is 28 fewer than in 1Q20. Mining and energy are among the sectors with most arbitration processes in progress.