Kingsgate Consolidated has begun its claim against Thailand’s Government following the forced closure of its Chatree gold mine last year.
The Thai government ordered the suspension of all gold mines, including Chatree, last year, due to concerns over potential health and environmental issues.
Kingsgate denied these claims and is now seeking number of actions, including compensation, for Thai Government’s violation of the Australia-Thailand Free Trade Agreement (TAFTA).
The TAFTA, which aims to improve bilateral services, trade and investment, was signed by both countries in 2004. It was then enforced in 2005.
It contains a range of provisions related to investment protection, guaranteeing certain rights to Australian investors in Thailand. This includes the right to seek an impartial resolution of investment disputes with the Thai Government through arbitration before an international tribunal.
Kingsgate has launched the first stage of its claim, by notifying the Thai prime minister of its plans to conduct consultations required under the TAFTA.
The company said it has made a number of attempts to contact the Thai Government over the past 11 months to discuss measures that led to Chatree’s premature closure on December 31 2016.
These included requests for meetings with the prime minister and cabinet members that were left unanswered.
“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,” the company said.
Kingsgate is currently looking at a range of funding options for the potential TAFTA arbitration process if it goes ahead.