Litigation: Expropriation of Limestone Quarry in Oman

Overview

A New York investor invested in a limestone quarry in Oman. The quarry was subsequently expropriated in 2006. Core Consultants was employed by the defense attorneys to assist in building a case against the Omani sultanate.

Methodology

Whilst several years had passed since the date of expropriation, Core Consultants valued the future potential of the limestone quarry from the perspective of an investor in 2006. Several clients were contacted in order to affirm that they had specific limestone offtakes.

Our Recommendation

Despite being employed by the defense, our opinions remained independent and unbiased. Our recommendation was that whilst compensation was required, the quantum being asked was too large. Further as some of the offtakes were with firms that had uneconomic businesses there was risk to the future profits. Finally as the limestone quarry had reserves for only 15 years, a twenty five year valuation was too rich.

Outcome

The two parties subsequently settled out of court in 2013. Core Consultants remains an associate for the legal team.

Lara Smith

Lara is the CEO and founder of Core Consultants. She has been an analyst for over thirteen years and has focused on commodity markets for just over a decade. She began her career as a buy-side analyst at Foord Asset Management in Cape Town, before taking a Head of Research role at a mining corporate finance and investment firm.

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