Pacific Rim takes on El Salvador

Pacific Rim Mining (PMU-T, PMU-X) is readying to play hardball with the government of El Salvador.

The company, through it wholly owned subsidiary Nevada-based Pac Rim Cayman, is taking the government to international court arguing that it is in violation of the Dominican Republic – Central America – United States Free Trade Agreement (CAFTA).

The complaint centers around the company’s prospective gold and silver El Dorado property that sits roughly 65 km from San Salvador.

While Pacific Rim says it enjoys broad public support for the project – a recent survey showed 75% of the population to be in favour of mining in general – NGO’s and local communities near the project have protested against it vehemently.

Such protests are thought to be behind the government’s continuing refusal to issue the permits necessary to begin development.

The company says it has thus far invested US$77 million on the project and will be looking to have that sum as well as “hundreds of millions” in damages reimbursed to it through the court action.

The company says it has not yet determined the specific amount of damages it will be looking for.

As for whether or not a company has any chances at defeating a sovereign country over the development of a project within its own borders, the company pointed to the case of
Metalclad, a California-based company that sued the government of Mexico.

Metalclad won roughly US$16 million in courts after saying the country had violated the North American Free Trade Agreement by striking down its right to build a hazardous waste plant in the country.

In Toronto on Dec. 12, Pacific Rim shares were off 4% to 12¢ on 15,000 shares traded.