Differences among the ruling coalition parties regarding the restructuring of the Reko Diq copper-gold project in the Chagai district of Balochistan surfaced on Tuesday, as the federal cabinet gave the final go-ahead for the signing of the deal before the December 15 deadline.
The two main coalition parties of the government, the Jamiat Ulema-e-Islam-Fazl (JUI-F) and the Balochistan National Party-Mengel (BNP-M), boycotted the cabinet meeting, chaired by Prime Minister Shehbaz Sharif.
The cabinet held a detailed discussion on the Reko Diq project.
A similar situation was seen in the Balochistan Assembly, where lawmakers lashed out at the government over the passage of a resolution in favour of the deal. A BNP-M member of the provincial assembly termed the resolution an attempt to usurp the rights of the people of Balochistan.
The JUI-F and the BNP-M protested in the federal cabinet meeting, saying that they were against the bill on the project because they were not taken into confidence regarding the matter. However, the government assured the coalition partners that their reservations were valid and necessary amendments would be made soon.
In his opening remarks, Premier Shehbaz said that the government of Pakistan would ensure the protection of the rights of investors in all the investment projects, including the Reko Diq project, and all the promises made to them would be fulfilled.
The cabinet was informed that a presidential reference was filed in the Supreme Court under Article 186 of the Constitution for a legal opinion on the final agreements. The court gave its opinion on December 9, saying that the restructuring process was transparent.
The cabinet was told that the opinion of the Supreme Court had already been taken regarding the Foreign Investment (Promotion and Protection) Bill, 2022. The cabinet was also informed that it had been decided by the coalition parties that the legislation was to the extent of the Reko Diq project only.
In this regard, a five-member cabinet committee was formed to remove some legal obstacles. The committee included Law Minister Azam Tarar, Finance Minister Ishaq Dar, Commerce Minister Syed Naveed Qamar and Economic Affairs Minister Ayaz Sadiq.
The cabinet committee will hold talks with the leaders of the coalition parties and take them into confidence and address their concerns. It was also decided that the amendment would be made in consultation with the concerned parties.
During the meeting, the cabinet also approved the regulatory framework for the state enterprises and their special purpose vehicles, the government of Balochistan Special Purpose Vehicles, and the Reko Diq Project Company regarding its restructuring.
After a long discussion, the ministers approved the signing of the final agreements for the restructuring of the Reko Diq project on the recommendation of the Petroleum Division. The cabinet also approved the project funding plan passed previously by the Economic Coordination Committee (ECC) of the Cabinet.
On Sunday, the Petroleum Division informed the ECC meeting that the federal and Balochistan governments entered into an out-of-court settlement with Tethyan Copper Company, Australia (TCCA), following an adverse arbitrary award issued by the International Centre for Settlement of Investment Disputes (ICSID).
The TCCA is jointly owned by Barrick Gold Corporation of Canada and Antofagasta PLC of Chile. The Petroleum Division further informed the ECC that as per settlement terms an amount of $900 million was deposited in an escrow account.
However, sources told The Express Tribune that the government directed the state-owned companies to deposit an additional payment of $22 million in the escrow account, which was jointly operated by the Antofagasta Plc and the government of Pakistan.
The current joint venture comprised Barrick Gold Corporation with 50% shareholding and the government of Balochistan with 25% shareholding, 10% direct free carrier, plus 15% through Balochistan Mineral Resources Limited to be paid by the government of Pakistan along with capital and operating expenses on the project.
Further, three state-owned enterprises (SOEs) – Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL) and Government Holdings (Private) Limited (GHPL) – collectively hold 25% share in the project through a single Special Purpose Vehicle called the Pakistan Minerals (Pvt) Limited.
On Saturday, the Balochistan Assembly adopted a resolution about the Reko Diq project amid opposition parties’ protest – fulfilling a pre-condition for the settlement agreement between Pakistan and Barrick Gold to proceed ahead.
On Tuesday, however, the opposition lawmakers expressed their reservations over the passage of the resolution. “This is an attempt to usurp the rights of the people of Balochistan,” BNP-M’s Akhtar Mengal said on a point of order.
He claimed that the treasury members had passed the resolution in the dark of night and deceived the people of Balochistan. However, Minister Noor Muhammad Dummar, who belongs to the Balochistan Awami Party (BAP), replied that the resolution was adopted in the presence of the opposition lawmakers.
On Friday, the Supreme Court had declared that the settlement agreement between the Pakistani government and two international companies, Antofagasta and Barrick Gold Corporation, for the revival of the Reko Diq mining project was legal.
(WITH INPUT FROM OUR QUETTA CORRESPONDENT)
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