The claim pertaining to the Turkish gold project will be filed under the Netherlands-Turkey Bilateral Investment Treaty
Alamos Gold has announced that it will file an investment treaty claim against Turkey, seeking more than $1bn in damages, for the “expropriation and unfair and inequitable treatment” regarding its Kirazli gold project in the country.
The Canada-based miner will file the claim under the Netherlands-Turkey Bilateral Investment Treaty. The amount sought represents the value of its assets in Turkey, said Alamos Gold.
According to the company, the Kirazli gold project has been stalled since October 2019 due to the Turkish government’s refusal to renew its mining licenses. In October 2020, the government declined the renewal of the company’s forestry permit as well.
Prior to that, Alamos Gold was given approval of all the required permits needed for the construction of the gold project.
These include the environmental impact assessment approval, forestry permit, and GSM (business opening and operation) permit, and some key permits for the nearby Ağı Dağı and Çamyurt gold mines.
The company claimed that the Turkish government did not give it a reason for refusing the renewal of the permit or a timeframe for renewing its licenses.
The gold mining project in the Çanakkale Province in the Biga Peninsula of northwestern Turkey was also impacted by protests, which were triggered by false information on social media, as per the company.
Alamos Gold said that due to the non-renewal, Turkey will lose out on more than $500m in future economic benefits, which include tax and other revenues, along with thousands of jobs.
Alamos Gold president and CEO John McCluskey said: “After 10 years of effort and over $250 million invested by the Company we have been shut down for over 18 months in a manner without precedent in Turkey, despite having received all the permits required to build and operate a mine.
“The Company has worked in Turkey to the highest standard of conduct with respect to social and environmental best practices.
“Despite this effort, the Turkish government has given us no indication that relief is in sight, nor will they engage with us in an effort to renew the outstanding licenses.”
Alamos Gold and its subsidiaries anticipated to face an after-tax impairment charge of around $215m due to the delay and uncertainty relating to the Kirazli gold project and also the arbitration process.