Reko Diq reserves: Mining aspirant serves notice to provincial government

Published: October 22, 2011
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The two sides now have 120 days to meet and reach an agreement. PHOTO: ONLINE/FILE

The two sides now have 120 days to meet and reach an agreement. PHOTO: ONLINE/FILE

ISLAMABAD: 

A dispute between Balochistan government and Tethyan Copper Company (TCC) has taken an ugly turn that is likely to jeopardise $3.5 billion in foreign investment and a potential bilateral treaty between Pakistan and Canada.

TCC, a joint venture between Chile-based Antofagasta Company and Canada’s Barrick Gold Corp, seeking a mining license for Reko Diq copper and gold reserves, served a “notice of dispute” to the Balochistan government on Wednesday.

The partners filed the notice after the provincial government refused to meet the company executives and did not extend the 30-day deadline for it to respond to objections that the provincial government had risen over a mining lease.

The provincial government’s attitude disappointed the company which did not have any other option but to invoke dispute resolution clauses of the Chagai Hills Exploration Joint Venture Agreement, Canadian High Commission officials told The Express Tribune.

The provincial government had raised ten objections over mining licence application submitted by the TCC and gave it a month’s deadline to respond. The company repeatedly requested for time to better understand the objections but the government refused to either give time or extend deadline to file a comprehensive response, the diplomats said.

Under the safeguard clauses of the treaty, the two sides now have 120 days to meet and reach an agreement.

High Commission officials said if both parties could not resolve the dispute, the company will have to seek a resolution through international arbitration and seek compensation.

Reuters quoted the TCC Chief Executive Tim Livesey as saying: “It is my feeling that there is a degree of confusion … and I hope we can resolve the dispute”.

The company has so far spent about $400 million in the exploration and feasibility study and would not leave so easily, the diplomats added.

According to the feasibility study of the project, there is approximately $127 billion worth gold and copper reserves – an estimate contested by the Pakistani experts who say that the real value is over $260 billon. Of the earnings, 52% would go to the federal and provincial governments in shape of taxes, royalty and other incomes while the provincial government would have 25% equity partnership without risk investment. (With additional reporting by Shehzad Baloch in Quetta)

Published in The Express Tribune, October 22nd, 2011. 

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Reader Comments (14)

  • anwar
    Oct 22, 2011 - 10:13AM

    Most mining operations are a scam to siphon money from local and international banks against a minimum investment. blessing. Only mining operations taken in hand by local governments are successful if done seriously and in a transparent manner. In this case $127B reserves of copper and $4billion loans taken with only a $ 400 million invested on ground (inflated value). The judicial matters ensure that the reserves will sit there forever and the investors can live out the rest of their livers in peaceRecommend

  • Attif Abbas
    Oct 22, 2011 - 11:48AM

    I beleive company cant prove that he has invested $ 400 million in the project so far.If they have paid $ 390 Million out of this investment as executive salary , by taking it out probably $ 10 million will be left as real investment.Rest of matter is easy to solve.

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  • Ajmal Gorgaich
    Oct 22, 2011 - 12:50PM

    I can name every one in the court who have sought money from my company including the high ups. Such thieves and progress of Pakistan cannot go together. They are danger to the progress of the area, jobs of poor Baloch youth and a source of international defamation.Recommend

  • Zarbat Khan
    Oct 22, 2011 - 12:55PM

    The licence of the company expired due to technical reasons. critics should name whether we are alone in this bribery. Are politicians not demanding money from the department for issuing licences. So please put the case in correct perspective. Yes we are doing it, but we are not alone.Recommend

  • abid
    Oct 22, 2011 - 3:56PM

    It is another blunder by pak government, they say that if we can refine uranium whey cant we refine copper and gold? what a mess…During the tenure of this democratic gover. all important financial organs of Pakistan have been destroyed i.e. Pak steel mills, PIA, Pak Railways and Wapda etc yet they brag about exploring Reko Diq. Dr samar said we will generate 50,000 mw electricity from thar coal but since three years he is not able to manage funds for a simple 50 mw electricty project from thar coal. People of Pakistan especially media should educate people about pros and cons of such absurd steps that being taken by incompetent leaders.

    If an international cricket team cannot visit our country due to the security threat how any mnc will come and invest billions ? + when a mnc will go in international court of arbitration the absurd decision makers dont understand that it will prompt western MNc’s not to invest in Pakistan in the future?
    With the booming population , Pakistani people desperately needs jobs otherwise violence will shoot up.Recommend

  • Tariq Ahmad
    Oct 23, 2011 - 1:49AM

    Baluchistan can have 100% of zero if the Canadians leave

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  • Yaggi Baloch
    Oct 23, 2011 - 8:37AM

    Now federal Government has paly a positive role and save this project, becouse it is massive foreign investment.If TCC takes the case in INternational Court, then it will be bad luck for Pakistan as well Balochistan.
    The reputation of the CM Balochistan is not good, even Dr. Sammar Mubarak Mand is the man, who started conspiracies against Dr. Qadir khan. so how these two corrupt team can run this project.
    Every Pakistani can run this project, but no one can get benifit. running a project is some thing else ,and running a project on commercial basis is some thing else.
    Balochistan governemnt can make better the roads only quetta city, the how can they run this project.
    I request Pakistani media just play a positive role with open eyes, and never support the corrupt politicians. because they just want fill their pockets and increase bank balance.

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  • Gowaram Baloch
    Oct 23, 2011 - 10:07AM

    Fully agree with Abid comments

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  • KhalidJaved
    Oct 23, 2011 - 1:54PM

    Another farce by the Province of Balochistan. I’d like to see them try to extract an ounce of copper from the mine without the help of international engineering firms

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  • hopeless
    Oct 23, 2011 - 4:36PM

    This will be another hit Pak will have to take on the chin. Baloch govt cannot unilaterally change terms and conditions for binding contracts with 3rd parties, even if the govt owns the property. A signed deal is a deal. Even if the govt thinks that in hindsight it could have gotten a better deal, that’s no excuse to renege on the contract. They should have negotiated better in the first place.

    If this goes all the way to arbitration, the Baloch govt will have to pay expenses plus refund investments plus pay compensation for loss due to breach of contract. Money that the govt doesn’t have. Not to mention set back to investment for decades and lost jobs/royalties/etc because the case will be tied up in court with appeals and counter-appeals. Then again a Pak state agency will take a judicious path when pigs fly.

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  • Attif Abbas
    Oct 23, 2011 - 10:29PM

    Question is how much money they actually owe, its nt like the hue and cry created by WS firms,where they cry in billions of dollar and when you go into math its pennies.So where do we stand.

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  • A Khan
    Oct 24, 2011 - 8:18PM

    With the present provincial political setup and the mafia of mines department, Balochistan is not likely to make any progress in mining. Just see how the officers of the department are defending bribery and corruption.
    Unless heads are physically rolled for corruption and crimes, things are not likely to change on this side of the Pat feeder Canal

    Recommend

  • A Khan
    Oct 25, 2011 - 10:51AM

    Like Ajmal Gorgaich, I too want to be a witness of the bribery charges against the officers of Mines Department and the ministers. They will never let any body do a rightful job unless paid heavily. Present setup in the department is the most corrupt in the last three decades.

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  • Asad Khan Luni
    Oct 25, 2011 - 1:31PM

    Mines Department in the present set up is defrauding every one from investor to miner to labor. It is not only the big fish like TCC in reko diq which is being mugged, but every one who works in any mining field is their victim. If the department and its minister were not enough, they have been joined by FC also, which plunder in the name of security. They do not let anyone work in the leased area in the name of security, unless one pay them.

    Recommend

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