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• A version of this post ran on the author's blog. The views expressed are the author's own.

The Canadian gold mining company Pacific Rim announced on Oct. 8 that it had signed an agreement to be acquired by OceanaGold Corp., an Australian mining firm. The acquisition price reflects a premium of approximately 50 percent above where Pacific Rim shares had been trading.
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Pacific Rim currently has a high profile international arbitration pending against the government of El Salvador relating to the government's refusal to issue a permit to allow the mining company to begin operations. ÌýApparently OceanaGold feels that the arbitration case, or the possibility of a negotiated resolution, is strong enough to warrant the investment in Pacific Rim.

ÌýAccording to the press release announcing the deal:

The international arbitration likely won't conclude until the second half of 2014, after a new president takes office. ÌýThe current de facto ban on mining began under Tony Saca when he was president and has continued during the presidency of Mauricio Funes. [Mr. Saca is running for president in the February 2014 election with the newly created Unity party].

OceanaGold operates mines in Australia and New Zealand and has one mine in a developing country, its Didipio mine in the Philippines. ÌýThat mine has run into protests from groups claiming that OceanaGold has not respected the rights of local indigenous communities. An article titledÌýDestroying Didipio, sets out the conflict between OceanaGold and local people affected by the mine. Ìý ÌýÌý

–ÌýTim MuthÌýcovers the news and politics of El Salvador on his blog.