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Peru's Cofide to pay Minera IRL $32.6M after losing arbitration

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Peru's Cofide to pay Minera IRL $32.6M after losing arbitration

Peruvian development bank Corporación Financiera de Desarrollo SA will have to pay $32.6 million in compensation to Minera IRL Ltd. after losing an arbitration relating to the bank's revocation of a loan to the mining company, SEMANAeconómica reported.

In 2017, Minera IRL filed for an arbitration process with the Chamber of Commerce of Lima after Cofide revoked a mandate to exclusively structure a $240 million senior loan that would have been used for developing the miner's Ollachea gold project.

Earlier that year, Minera IRL obtained an order from the Superior Court of Justice of Lima to protect the company and its assets from proceedings related to the lapse of a $70 million bridge loan from Cofide.

The arbitration council ruled that Cofide did not comply with the structuring obligations under the mandate. Of the total compensation, $18.7 million was related to emerging damages and $13.9 million was due to loss of profits.

However, the arbitration court rejected a separate request from Minera IRL for $1.5 million in additional compensation. The court determined that the costs of arbitration should be covered by both companies.