Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Following the dismissal by a U.S. court of Crystallex’s lawsuit against asset transfers by Venezuelan-owned refiner Citgo, the Canadian company announced that it has requested a new hearing.
According to Venezuelan media, the miner filed the new request before the 3rd U.S. Circuit Court of Appeals earlier this week. The company alleges that the South American country is performing “fraudulent transfers” to avoid paying what it owes after the 2008 nationalization of Crystallex’s assets.
In detail, the Toronto-based corporation is seeking to collect $1.2 billion plus interest awarded in 2016 by a World Bank tribunal against Venezuela. But the Nicolás Maduro government has refused to pay and, according to Crystallex, state-owned Citgo performed a series of “fraudulent” operations in 2015 and 2016 to avoid paying its debt.
Among those transactions, Crystallex cites the payment of dividends from PDV Holding to PDVSA for $2.2 billion and the issuance of 49.9% of Citgo’s shares to secure a loan granted by Russian giant Rosneft in 2016.
Local newspapers state that, in the new submission, the gold miner says that Venezuela is using such mechanisms to hide the money it owes, that it has to be forced to pay and that the court that rejected the suit omitted or misunderstood the U.S. law regarding fraudulent transfers of funds.
It was just a couple of weeks ago, on January 3, 2018, when the 3rd U.S. Circuit Court of Appeals dismissed Crystallex’s suit because it targeted a Delaware-incorporated subsidiary of state-owned oil company PDVSA which in turn owns Citgo. The court said that Crystallex’s claim is against Venezuela rather than Citgo. However, in the Canadian firm’s view, PDVSA is Venezuela’s “alter ego.”
