MINING SECTOR DISPUTES
CD: Could you provide an overview of the volume, size and scope of disputes currently taking place within the mining sector?
Ford: Disputes tend to be either relatively small or rather large. It seems that the mid-range disputes, if they are occurring, are not reaching the public arena. The scope is typical of this type of dispute, ranging from disputes between producers and purchasers where price fluctuates outside expected ranges or where the product does not meet specifications, possibly due to attempted cost savings.
van Zyl: While it is difficult to quantify the volume and scope of disputes in Africa, it is safe to say that there are strong incentives for mining companies worldwide to avoid disputes, and to resolve them amicably where they do arise. These disputes are complex and difficult to resolve in any forum, partly as a result of the difficulties associated with determining the value at stake and appropriate compensation.
Rigby: Claims for damages around the world are substantial and in North America typically range from tens of millions to billions of dollars. The scope of these claims is varied and includes revocation or non-granting of licences and permits, disputes over taxation and royalties and non-disclosure of material information during asset sales. Given the extremely lengthy nature of legal due process, compound interest on damages claims can be quite substantial. Then there is the issue of the award of costs for attorney and expert fees, which can also be substantial. The majority of disputes appear to be between a sovereign government and a mining company, but disputes between mining companies are also common.
Oct-Dec 2017 issue
Rio Tinto
Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates
SRK Consulting