QUETTA: Tethyan Copper Company (TCC), in response to Balochistan’s refusal to grant mining licence for Reko Diq project, has charged the provincial licensing authority with violating mineral rules as well as TCC’s rights under a joint venture agreement and Pakistani laws.
The Balochistan government has rejected TCC’s mining lease application for exploring copper and gold reserves in Reko Diq area. TCC had submitted the application in February this year, following submission of a feasibility study in August 2010.
In a press release issued on Friday, TCC said Balochistan had not responded to requests for meetings to resolve the issue and the rejection notice compromised the company’s preferred route to sort out issues through negotiation.
“The licensing authority’s summary refusal to grant the mining licence, to which TCC is entitled, breaches not only the Balochistan Mineral Rules (2002), but also TCC’s rights under the Chagai Hills Exploration Joint Venture Agreement and Pakistani law,” it said.
Discussing the merits and benefits, TCC said it believed the Reko Diq project could contribute significantly to the development of a modern and transparent mining industry in Balochistan, contributing to the local and greater Pakistani economy through large foreign direct investment and through revenue generation and local investment during the mine’s expected life of 56 years.
“We firmly believe that our activities to date have been fully in line with the Balochistan Mineral Rules (2002) and we will welcome the opportunity to discuss this with the provincial regulator and the government,” said Tim Livesey, CEO of TCC.
According to Livesey, the project has the potential to kick-start the mining sector in Balochistan and will act as a catalyst for further investment in exploration and mining by independent parties.
“Tethyan is committed to developing its mine at Reko Diq in line with international best practice with respect to environment, labour, health and safety,” he said.
Responding to TCC’s claims, Balochistan government’s focal person Ali Madad Jatak denied that the provincial government had breached the agreement, saying the application for mining licence was rejected because TCC violated the agreement.
Talking to The Express Tribune, he said Balochistan had the capability to run the project smoothly. “Chief Minister Nawab Aslam Raisani wanted people to own the province’s mineral resources and the decision was taken in people’s interest. The exploration licence was granted to an Australian company in 1993-94 and the company sold its shares without taking the government into confidence,” he said.
Tethyan Copper Company Pakistan (Private) Limited is a joint venture between Barrick Gold of Canada and Antofagasta Minerals of Chile – both gold and copper mining giants.
TCC, in partnership with the Balochistan government, is evaluating the development of a world-class copper and gold mine at Reko Diq, District Chagai of Balochistan. The company has already invested over $200 million in the project since 2006.
Published in The Express Tribune, November 19th, 2011.
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I am not sure about the details but depending on the recovery grade of copper and gold and the ease of mining it, 25% may not be a very bad offer. TCC is offering to setup power generation, mining and mill operation which includes floatation. But a 25% from a Chinese company may be a bad offer. In the recent past Chinese have developed Copper Smelting technology which is significantly cheaper than the technology in use by Australian and Canadian Mining companies. This has caused shutdown of many copper smelters around the world. Doing it by ourselves, its highly safety critical process. Pakistan may be able to do what TCC is trying to setup but I dont think Pakistan can operate a smelter on its own. Secondly it consumes huge amount of power. I know all this becase I am an engineer in a smelter in overseas. I would suggest that Pakistan should get its samples tested and verify ore grade first and then best would be to invite international mining companies for bidding in a clean fashion (which I doubt is possible with politicians with their personal interests)
@Muslim Baloch: If Pakistanis in general cannot be trusted to deal with the affairs of Pakistan honestly, what makes you think the people of Balochistan will deal with the affairs of Balochistan honestly?
@Muslim Baloch : This project is being handled by your own government. Not Federal.
@ Cautious, the mining profit is not much even Congo gets 34 percent of the profit share in their country. And also if the feasibility study which TCC was suppose to complete has blunders and doesnt paint the right picture then ofcourse the contract has to be nullified.
@yasar : A chinese company has agreed to setup a smelting unit at Reqo Diq to purify the gold n copper instead of exporting raw material at peanuts. What more do u want.
Well same thing happen to Thar coal in around 2003. Chinese company was willing to invest and wanted to charge a fee that is very competative but last govt got greedy and wanted to pay investers a smaller amount then they wanted. They pulled out but now we are making coal deals that mean average Pakistan have to pay way more.
Boluchstan will have same issue, eventually they will invite a foreign company back who will ask for a bigger share and will get it because sardars of Boluchstan do not have expertise to carry out project.
Good politicians of Pakistan take all decisions for the greater good of awam we have 60+ years of our history to prove that.
Great - a project which could have brought jobs and prosperity to the region is going to end up in litigation - not only will the project not be completed you will probably end up having to paying damages to TCC. This sends a clear message to foreign investors ---- stay away!
It has been seen that there were many projects took places in balochistan. All seen uncomplicated due to Pakistani vague policy and corrupt government. The best solution is to handover balochistan to Baloch people.
A neutral third party needs to be brought in to solve this mess of claims and counter-claims. But this request must come from the BOD or they will complain they are being bull-dozed.
Good sense should prevail. This project could change the face of Baluchistan and confer huge benefits on it's people stretching out over the life of the project.
Unless the BOD does not want that and prefers to keep their people in eternal bondage to the Sardars.