International arbitration: the key themes leading to mining disputes

Mining Technology

Mining projects present a cluster of risks, with many sources of potential disputes between miners, their partners and host nations. What are some of the leading drivers of international arbitration proceedings in the mining industry?

By Chris Lo

Every company keeps a sharp eye on the risks to which their operations are exposed, and in the mining industry, there’s no shortage of potential pitfalls for the unwary explorer or producer. With blockbuster deposits dwindling in many key metals, miners are being forced to look further afield for new international opportunities.

Mining firms’ reliance on the long-term cooperation of the host nations in which they are investing, not to mention the remote locations and complex supply chains that come with most mineral exploration and production projects, creates a cluster of risks.

Many of these risks are difficult to predict and must be covered comprehensively in treaty or contractual negotiations between mining investors and host nations (or between private parties, in the case of commercial contracts or offtake agreements). This is especially the case in mining, among other sectors, because the capital-intensive nature of the business often requires large expenditures long before a mine starts producing, leaving mining companies at risk of losing investments already sunk into a venture if the deal later turns sour.

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