Wave of foreign lawsuits against local miners hits Canadian courts – by Nelson Bennett (Business Vancouver – April 19, 2016)


In the coming months, the BC Supreme Court is expected to decide whether a civil claim against a B.C. company with a mine in Eritrea can be heard in Canada. Three former Eritrean mine workers claim Nevsun Resources Ltd. (TSX:NSU) was complicit in the Eritrean government’s use of conscripted labour and other human rights abuses at the company’s Bisha mine.

Should the court decide the claim can be heard in Canada, it could have wider implications for Canadian mining companies operating in countries with less than sterling environmental and human rights records.

More than three-quarters of the world’s mining and exploration companies are based in Canada and operate in 100 countries, according to a McCarthy Tétrault report on mining and the courts. The Nevsun claim is one of three that have been launched against Canadian mining companies since 2014.

Toronto’s HudBay Minerals Inc. (TSX:HBM) faces three separate claims, which include allegations of rape and murder committed by security forces acting on behalf of HudBay at Guatemala’s Fenix mine, which it acquired through a merger in 2008 and sold in 2011.

Even though HudBay didn’t own the mine when the alleged rapes occurred in 2007, the company might still be held liable if the allegations prove true, according to Nicholas Hughes, co-chairman of McCarthy Tétrault’s mining litigation group.

“It depends on how the merger operated,” Hughes said. “If the merger operated as such that there was an amalgamation, then you bring in all the problems into the merged company.”

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