A local consortium has made a proposal to develop a major copper and gold mine in Chagai district in Balochistan after the country's top court decision blocked its development by -- Tethyan Copper Company (TCC) -- a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold.
The Balochistan Mineral Exploration Company (BMEC) received a proposal from the National Resources Private Limited (NRL) on an unsolicited basis to develop and implement the Tanjeel reserves as a starter project, followed by the development of the vast Reko Diq area reserves.
The NRL is a domestic consortium comprising Arif Habib Equity (Pvt) Limited, Mari Petroleum Company Limited, Liberty Mills Limited, Reliance Commodities (Pvt) Limited (Fatima group), YB Pakistan Limited (Lucky group) and South Western Mining (Pvt) Limited.
The BMEC is a joint venture of the Balochistan government, the Centre (10%) and the concession holder of EL199 (consisting of Reko Diq and Tanjeel reserves).
In an introductory presentation to the BMEC Board, the NRL summarily highlighted the salient features of the submitted proposal. Shamsuddin A Shaikh, the NRL CEO, said Balochistan had a significant role to play in the development of Pakistan and its economy.
“Through the development of Tanjeel and Reko Diq under [the] public-private partnership [mode], the NRL is hopeful that it can usher in a new era for the progress of the region through this initiative,” he added.
“The project will have a complete social uplift package associated with it for the entire area, in addition to the development of the mineral cadaster to aid the development of the mining sector.”
He also requested the BMEC Board to permit the NRL to carry out further investigation of the minerals and the energy and water resources, which would be required for the “expeditious development” of the proposed project.
Hafiz Abdul Basit, the provincial additional chief secretary (development) and the chairman of the BMEC Board, appreciated the initiative.
He assured the representatives of the NRL that the matter would be reviewed by the transaction adviser, already hired by the company, and dealt with in accordance with the laws, in the best interest of the province and the country.
In July 2019, an international arbitration tribunal of the World Bank's International Centre for Settlement of Investment Disputes (ICSID) had slapped a penalty of $5.84 billion on Pakistan for its 2011 court decision to deny the mining lease to the TCC.
The tribunal -- chaired by Germany's Klaus Sachs and including Bulgarian arbitrator Stanimir Alexandrov and UK's Lord Hoffmann -- had ordered Pakistan to pay over $4 billion in damages to the TCC, in addition to $1.7 billion in pre-award interest.
Later, the TCC approached five different countries courts for the enforcement of the penalty imposed on Pakistan.
In November 2019, Pakistan moved a plea before ICC for annulment of the award on several grounds. When the country's plea was registered, an interim stay was granted automatically on the enforcement proceedings initiated by the TCC.
A hearing to confirm the stay order took place via video link in April last year. In September 2020, the tribunal finally ruled in favour of Pakistan, confirming the stay on the enforcement of the award.
The office of the attorney general for Pakistan in a statement described the development as a success for the country and its legal team.
The federal government has said it is in talks with TCC about a settlement.
(With input from agencies)
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