The lawmakers of Balochistan have expressed their satisfaction on the terms of the proposed deal after senior federal government officials addressed their concerns on the out-of-court settlement on the Reko Diq project.
The country is facing a massive penalty of $6 billion because of its decision to deny a mining lease to Australia's Tethyan Copper Company (TCC).
The Pakistan government is engaging with the TCC for a settlement in the matter for the last couple of years.
It has been learnt that a senior official in the Attorney General for Pakistan’s (AGP) office, along with additional secretaries of petroleum and finance, gave a lengthy eight-hour briefing to the members of the Balochistan Assembly on Monday.
Sources told The Express Tribune that the officials were successful in addressing all concerns of Balochistan lawmakers on issues related to the provincial profit-sharing, royalty etc.
The lawmakers were told that the deal had yet to be signed, but negotiations were under way to finalise it soon.
They were informed that the most daunting challenge was to clear the liability of $6 billion fine awarded by International Centre for Settlement of Investment Dispute (ICSID) on account of scrapping the lease mining agreement with the TCC.
To clear the liability, a deal is being negotiated wherein there was a possibility that TCC’s one shareholding company Barrack might again come to resume the project with different terms.
The lawmakers were informed that Balochistan’s profit share would be 25%, which was equal to that of the federal government.
The federal government would also bear the burden of the province's share of the cost of the project.
Therefore, Prime Minister Imran Khan on Wednesday announced that in line with his government's vision for the uplift of smaller provinces, he had decided that the federal government would bear the financial burden for Reko Diq and its development on behalf of the Balochistan government.
“This will help usher in an era of prosperity for the people and the province of Balochistan,” he had added.
The officials also informed the lawmakers that mining companies would ensure 5% royalty in accordance with the provincial law. The company would also spend on education, health and water in the province in order to fulfil corporate social responsibilities.
In July 2019, an international arbitration tribunal of the ICSID had slapped a penalty of $6 billion on Pakistan for its 2011 decision to deny the mining lease to the TCC -- a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile.
The tribunal -- chaired by Germany's Klaus Sachs and including Bulgarian arbitrator Stanimir Alexandrov and the 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.
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The tribunal had found that Pakistan had unlawfully denied the TCC a lease to mine copper and gold deposits at the Reko Diq mine, located in Chagai district of Balochistan.
It had held that the state had committed an unlawful expropriation under the Australia-Pakistan bilateral investment treaty.
Later, the TCC had approached courts in five different countries for the enforcement of the penalty imposed on Pakistan.
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