Kingsgate Consolidated has launched an international legal claim against Thailand over the forced shutdown of its Chatree Gold Project on December 31, 2016. The company is seeking a range of remedies, including compensation, for the closure which it says violates the Australia – Thailand Free Trade Agreement (TAFTA).

As a first step, Kingsgate has this week notified the Prime Minister of the Kingdom of Thailand that it wishes to engage in consultations as required under TAFTA.

It says that over the past 11 months, it has made sustained, good faith efforts to engage with the Thai Government in relation to the measures against the Chatree Gold Mine that ultimately resulted in its premature closure.

These efforts included numerous unanswered requests for meetings with Thailand’s Prime Minister and members of his Cabinet.

In a statement Kingsgate said, “Regrettably, Kingsgate has now reached a position where it believes that the only option to resolve the situation is to exercise its rights as a protected Australian investor under TAFTA.”

TAFTA was signed in 2004 between Thailand and Australia to promote and improve the environment for bilateral services, trade and investment. TAFTA entered into force in 2005.

TAFTA contains a range of provisions specifically relating to investment protection. Amongst other things, these provisions guarantee certain rights to Australian investors in Thailand, including the right to seek impartial resolution of disputes with the Thai Government relating to covered investments by way of arbitration before an international tribunal.

The TAFTA consultations can take up to three months, and failing a mutual outcome, any international arbitration proceedings that may follow under TAFTA can take an undetermined amount of time to resolve, and could involve significant expenditure by Kingsgate.

Kingsgate says it is investigating a range of funding options for the potential TAFTA arbitration process if it proceeds.

The closure of the mine, 280km north of Bangkok, followed concerns expressed by locals about the impacts on health of heavy metals such as arsenic, manganese and cyanide.

ASX-listed Kingsgate and its Thai subsidiary Akara Resources have always strongly denied its mine has caused any health problems, saying extensive testing has shown levels of the naturally-occurring toxins to be similar to other provinces in Thailand.