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SAN SALVADOR (Reuters) - El Salvador said on Friday a World Bank arbitration panel threw out a complaint from Canadian mining company Pacific Rim demanding compensation for long delays in granting permits at its flagship gold project.
The company said it would continue fighting the case.
Canada's Pacific Rim PMU.TO is seeking hundreds of millions of dollars in damages from the Salvadoran government after it failed to issue environmental permits needed to exploit the company's El Dorado project.
El Salvador maintains it rejected the permits because Pacific Rim did not meet the proper environmental requirements, a charge the company denies.
Pacific Rim argues El Salvador is violating the rules of the regional Central American Free Trade Agreement, or CAFTA, and brought its claim to international arbitration.
The World Bank's International Center for Settlement of Investment Disputes (ICSID) ruled in El Salvador's favor, the country's attorney general said in a statement.
"The U.S. tribunal ... issued a decision dismissing all of the demands brought by Pacific Rim under CAFTA," the statement said.
The company plans to pursue the case in El Salvador in a process that will be overseen by the ICSID.
"We're pushing forward with the case and this ruling provides us with the green light to move forward," company CEO Tom Shrake told Reuters. "We've taken the extraordinary precautions in protecting the ecosystem from any of the residual material after the gold is extracted."
El Dorado, is located northeast of the country's capital and has measured and indicated resources of 1.4 million gold equivalent ounces.
The project would represent the first new precious metals mine in the country in 70 years.
The ruling had not been posted on the ICSID website by Friday night.
Mining has frequently been a source of controversy in Central America, sparking sometimes violent protests by residents who fear losing their land or access to resources such as clean water.
Reporting by Nelson Renteria in San Salvador and Julie Gordon in Toronto; Editing by Gary Hill