Schmid: Compensation Sought from Slovakia by EuroGas is Unrealistic

Talc mining in Gemerska Poloma (photo by TASR)

Bratislava, June 27 (TASR) – Compensation amounting to USD 3.2 billion (€2.9 billion) demanded from the Slovak Government by a company called Eurogas AG in arbitration over the revocation of a licence to mine talc in the village of Gemerska Poloma (Kosice region) doesn’t correspond with reality, Schmid Industrieholding chief Robert Schmid told TASR on Monday.

Industrieholding owns a 100-percent stake in Eurotalc, which is the current holder of a licence to engage in talc mining.

“Eurotalc doesn’t expect to generate, in 50 years, turnover that would approach the figures presented by EuroGas chief Wolfgang Rauball as a loss and as compensation within the arbitration process. I personally think that he doesn’t know the difference between the turnover and profit of a company,” said Schmid.

Eurotalc has invested €30 million in talc mining in Gemerska Poloma so far. The construction of buildings and installation of machinery for processing the talc ore mined will require an additional €15 million by the end of this year. “We’re counting on subsequent industrial talc production as of the beginning of 2017. We currently employ 40 people, and our labour force should later increase to 100,” added Schmid, who rejects all accusations by Rauball that he’ll be deprived of the deposit due to alleged corruption.

“Plenty of claims by Rauball haven’t come true, or they have proved to be untrue. Subsidiaries of EuroGas AG are going bankrupt, and the arbitration that should have been concluded by this summer is still pending. Meanwhile, EuroGas has postponed its annual general meeting from June 30 to an unspecified date. His [Rauball’s] stories are full of criminals who are responsible for the unsuccessful performance of the company EuroGas. For decades Rauball has brought many shareholders into misery, and a court found him guilty as well. He’s never felt any responsibility, however,” stated Schmid.

Despite repeated calls from TASR, Rauball has so far failed to submit any evidence that would back up accusations against Slovak representatives on his website. Rauball claimed that, based on the evidence submitted, the Prosecutor-General’s Office has begun investigating alleged corruption concerning the licence case. “The person around whom the investigation revolves is Central Mining Office (HBU) chair Peter Kukelcik,” said Rauball.

However, neither the press department of the Prosecutor-General’s Office, nor the Special Prosecutor’s Office (USP) has registered any such pending case. “USP has recorded a case concerning the suspicion of indirect corruption, but that was rejected by the police a year ago,” USP spokesperson Jana Tokolyova told TASR.

In a statement sent to the Slovak media, Rauball emphasised that he fully stands behind his claims and perceives as false any information to the effect that no action has been taken concerning the given case or that he’s misleading shareholders with his updates concerning the arbitration against Slovakia. On the contrary, Rauball harbours the conviction that he’s stepping on someone’s toes in Slovakia because Kukelcik was officially designated as a witness on behalf of Slovakia during arbitration proceedings held by the International Centre for Settlement of Investment Disputes in Washington in December 2015.

“They’re afraid that the investigation into corrupt behaviour displayed by the witness might lower the odds of Slovakia succeeding in the arbitration,” said Rauball.

According to TASR’s information, another Slovak witness in the case is likely to be Peter Corej, the former owner of EuroGas daughter company Rozmin, which lost the licence back in 2004. Rauball accused him of corruption in the process of acquiring a licence for a company called Economy Agency RV in 2005.

“There’s an idiom: the pot calling the kettle black. In other words, the one who has engaged in corrupt practices for years is accusing me of corruption. Rauball tried to buy me in the past. When he didn’t succeed, he started to blackmail me. When that didn’t work, he started to plot schemes against me, only to see his designs fail once again. I’ve been defending the interests of the Slovak Republic, and somebody like Rauball – by the way, he’s already been convicted by a court for similar criminal activities – won’t stop me. I possess enough material in writing regarding Rauball’s practices and the manner in which he operated in Slovakia,” TASR was told by Corej, who filed a criminal complaint against Rauball back in 2011, but hasn’t seen it addressed to date.

“If the Slovak police, courts, prosecution, the Slovak Intelligence Service [SIS] and even journalists hadn’t been corrupted by Rauball of all people but defended the interests of Slovakia, we wouldn’t be facing arbitration today. On the contrary, it would have been Rauball facing the music for his fraud against Slovakia. He’s purposefully and voluntarily lying to both the shareholders of the company and the Slovak public as well,” said Corej, adding that the head of EuroGas has never been to the talc mining site.

The talc deposit in Gemerska Poloma was discovered accidentally during a search for tin in 1985. The talc from the deposit has high levels of purity, with experts viewing it as one of the most important deposits in the world – representing some 85 million tonnes.

The revocation of the licence prompted Rauball, on behalf of EuroGas, to launch arbitration proceedings against Slovakia at the aforementioned International Centre for Settlement of Investment Disputes (ICSID). As the petitioner in the arbitration, which was launched in 2014, EuroGas is demanding compensation of $3.2 billion (€2.9 billion) from Slovakia for what it calls a marred investment.

EuroGas began indicating its plans to take legal action against Slovakia over the loss of the talc quarry in 2010. At first, it demanded compensation of €500 million in 2011. One year later a company called EuroGas Inc., registered in the USA, also began claiming compensation. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the USA from 1991 had been violated. The Slovak Finance Ministry last year denied that any such agreement had been broken.