Copper-and-gold project: Balochistan in a quandry over the fate of Reko Diq

Govt does not want to be seen selling the gold mine at throwaway prices

QUETTA:

The Balochistan government is under pressure to accept a negotiated settlement in a dispute with a company – Tethyan Copper Company (TCC), which was engaged in mining at Reko Diq Copper and Gold Project and which now seeks monetary compensation for federal and Balochistan governments’ ‘breaches of contract and treaty rights’ at an international court. 

During the recent two-week long hearing of the case, after which International Centre for Settlement of Investment Disputes (ICSID) in Paris reserved its judgment, the Pakistani legal team was also joined by political leadership – apparently for an out-of court settlement.

“Two committees were formed at federal and provincial level which went to Paris with a sole agenda—to have a negotiated deal with the TCC and out of court settlement,” an insider said on the condition of anonymity.

“The government committees had a separate briefing with the TCC and its parent companies – Antofagasta and Barrick Gold on Reko Diq project,” he said.



He said much before the hearing, the Attorney General of Pakistan had sent a letter to the Balochistan government, saying the case of Pakistan and Balochistan was weak and the latter was likely to lose out. “The AGP said the government would have to pay a fine of billions of dollars. So it was better to make an out-of-court settlement,” he said.

He said the Balochistan government was trapped now as it was trying to negotiate and also protect the interests of its people so that they would not be equally blamed for putting the invaluable resources on sale at throwaway prices.

Upon his return from Paris, Balochistan Chief Minister Dr Abdul Malik Baloch had said he would protect the interest of his people. He had not revealed anything about the possible deal but said he would take a decision in the best interest of Balochistan.

A government official said that Balochistan government is also trying to resolve the issue with the TCC before International court gives verdict.  The TCC has invested over 220 million US dollars in the project since 2006. “The company now claims around 12 billion US dollars in monetary damages,” a source told The Express Tribune.

Another government official said the TCC was not willing to work in Pakistan now. “Government is trying to resolve the issue because if the government is found guilty, then we have to pay billions of dollars in fine,” he said.



He said that since Balochistan did not have resources to pay such a huge amount, the federal government would pay the money from Balochistan government’s funds. Citing previous examples of federal government’s discriminatory policies, he said: “The federal government will pay the money from Balochistan’s National Finance Commission (NFC) Award or Federal Public Sector Development Programme (PSDP),” he added.

Sources in the provincial government said federal government did not care whether the contract was finalised with the TCC or a Chinese company and it only wanted to start the project to get maximum amount.

“Not a single person in Balochistan will agree to have a contract with Chinese mining companies,” an official said, adding that the companies involved in Saindak project at Chagai and Lead and Zinc Project in Dudar, Lesbela did nothing for the local communities or provincial economy ‘but ruthlessly exploited the resources.’

Published in The Express Tribune, October 25^th, 2014.