SANTIAGO: The Reko Diq copper mining project in Pakistan, which is jointly controlled by a Chilean and Canadian mining company, is likely to receive approval from the Balochistan government later in September.
According to a report published in a Santiago-based newspaper "Diario Financiero" on Tuesday, the Balochistan government was most likely to give a go ahead for the project later this month.
Reko Diq has been delayed due to permit issues and licensing disputes.
The London-listed Antofagasta and Barrick, each hold a 37.5% percent stake in the project, while the Pakistani government owns the remaining 25 percent, under the banner of a joint venture called Tethyan Copper Company (TCC).
TCC is based in Islamabad that is a joint venture between the Canadian mining giant Barrick Gold and the Chilean mining company Antofagasta, that had applied for a mining licence in February 2011 after having found a substantial amount of minerals at its exploration site.
A company spokesman at Antofagasta, however, said that government officials in Balochistan, haven't shown any signs they are ready to decide on the project.
The two companies which control the $3.3 billion project say Reko Diq can produce 190,000 metric tons of copper and 270,000 troy ounces of gold a year during the the first five years of operation.
Earlier it was reported that the standoff between the (TCC) and the Balochistan government may be headed towards a conclusion as a Chinese firm had offered to set up a smelting and refining facility in Pakistan, something that Quetta wanted and TCC had repeatedly said it was not able to do.
The Chinese mining giant Jinchuan Group had been lobbying the government to secure a deal to set up a multi-billion dollar smelting and refining facility near the Reko Diq mines to allow for the raw ores to be refined within Pakistan since the Balochistan government had expressed its discomfort with allowing TCC to export raw ores from the province.
TCC, for its part, said that setting up such facilities next to their plant would raise their investment costs too high. The deal became a political lightening rod after politicians in Quetta began to criticise TCC for offering what they said was a bad deal.
“The multi-billion dollar project may now be split in two: the mining part may go to TCC, if the Balochistan government decides in its favour, and Jinchuan may be hired for the smelting and refining part,” said one source familiar with the situation.
TCC sources said that the company had no objection if the government hired any other party for setting up smelting and refining facilities at Rekodiq.
Under the Balochistan Mining Rules, the company claims that is entitled to 100% ownership of the mining rights based on the fact that it made the investment to discover the mineral deposits. TCC has offered the Balochistan government a 25% share in the project. Quetta was mulling its decision on the matter after the Supreme Court refused to nullify TCC’s claims.
“The Supreme Court has given 120 days to the Balochistan government to decide the fate of project with TCC keeping in view rules and regulations,” sources said. “If Quetta fails to decide within that time, the case will reopen in the Supreme Court.”