ISLAMABAD: Balochistan has told the central government that it should stay away from striking a settlement deal with the Tethyan Copper Company (TCC) over the multi-billion-dollar Reko Diq gold and copper mining project, saying the province has full rights over the project.
According to sources, fresh differences between the Balochistan government and the central government erupted when the Ministry of Petroleum and Natural Resources sent a summary to the inter-provincial Council of Common Interests (CCI) in an attempt to find an amicable settlement of a case filed by the TCC – a Canadian and Chilean joint venture which was awarded the project – in the International Centre for Settlement of Disputes in Washington DC.
“Balochistan government owns the multi-billion-dollar Reko Diq project and the central government has no right to pursue settlement of the case by seeking approval from the CCI,” sources quoted as saying a communications sent by the provincial government.
A case about the project is also being heard at the Supreme Court. According to a senior government official, Balochistan wanted to wait for a decision of the court before going for a settlement over Reko Diq.
In the international court, TCC filed a request for arbitration last year in a dispute over mining rights, claiming damages after Balochistan refused to give the go-ahead for extracting copper and gold.
The central government is not willing to pay any damages if TCC wins the case. Instead, it wants Balochistan to consider re-negotiating the deal to reach an amicable settlement with the company. Sources said the law ministry had suggested that the provincial government should pay damages if the international court ruled in favour of TCC.
Following the law ministry’s opinion, Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain has sent a summary to the prime minister, seeking approval that Balochistan should bear the cost of damages.
The central government has also asked the province to pay fee of legal experts amounting to Rs450 million. Former prime minister Yousaf Raza Gilani had approved a summary in this regard, requiring Balochistan to pay fee of legal experts and damages.
TCC, comprising Antofagasta of Chile and Barrick Gold of Canada, holds 75% shares in the Reko Diq project while Balochistan has a 25% stake.
TCC claims it has invested over $500 million in exploration, scoping and feasibility studies. Total investment is projected to reach $5 billion over five years.
However in 2009, TCC and Balochistan got embroiled in a row because of a couple of issues. First, TCC wanted the province to bear 25% of financial obligations according to its share in the project, but the province refused. Second, TCC was concerned about purported involvement of a Chinese company in the project.
The mine has estimated reserves of 11.65 million tons of copper and 21.18 million ounces of gold.
Published in The Express Tribune, September 12th, 2012.
More in BusinessUS, Japan pledge assistance for Diamer Bhasha Dam