KINGSGATE Consolidated advises that, despite its best efforts, it has been unable to achieve any settlement of its claim against the Kingdom of Thailand for the unlawful expropriation of the Chatree Gold Mine. Accordingly, it has commenced arbitration proceedings against the government under the Australia-Thailand Free Trade Agreement.


The sun sets on the open pit at Kingsgate Consolidated’s Chatree Gold Project in December 2016.

The company says it is taking this action in order to recover the substantial losses it has suffered, and continues to suffer, as a result of the measures taken by the Thai Government.

Up to December 2016, Chatree was Thailand’s only active gold mine. Kingsgate, which had operated Chatree since 2001 through its local unit Akara Resources Public Co, argues that the closure of the operation was unlawful, as its mining licence doesn’t expire until 2028.

Bangkok Post reported that the government has responded by saying the environmental and health concerns related to the mine outweighed its economic benefits.

In a statement, Kingsgate announced that it had appointed leading international law firm Clifford Chance to represent it, with Dr Andrew Bell SC as Senior Counsel on the matter.

“Such proceedings could take an undetermined time to resolve, and could involve significant expenditure by Kingsgate. As with any legal proceedings, the outcome cannot be guaranteed. It should be noted however, that the commencement of arbitration still allows both parties to engage in dialogue to settle the matter on mutually agreeable terms, at any point in the proceedings.

“The Board of Kingsgate believes that the company has excellent prospects of successfully recovering very substantial damages against the Kingdom of Thailand, and will vigorously prosecute its claim,” the statement concludes.

In August 2017, Thailand’s government temporarily lifted the mine suspension, but did not show any willingness to offer Kingsgate monetary compensation for the alleged losses the company suffered as a result of the closure.

Thailand’s military regime also declined any indemnification for the expenses the company said it would incur to restart operations, estimated at more than $50 million, assuming a framework for doing so was agreed with authorities.

On October 13, Kingsgate announced that it would commence proceedings in the Supreme Court of New South Wales against Zurich Australia Insurance and other named insurers under a US$200 million Political Risk Insurance Policy.

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