While the provincial government contests international arbitration, the Supreme Court has set February 2 for resumption of proceedings against the Tethyan Copper Company’s (TCC) right to extract reserves worth billions of dollars.
Objections to arbitration
In its preliminary objections to the International Chambers of Commerce in London (ICC), the Balochistan government has declared its agreement with TCC ‘unlawful,’ The Express Tribune learnt on Sunday.
The objections have been raised by a team of local and international lawyers including former British prime minister’s wife Cherie Blair, Arthur Marriot, advocate Ahmar Bilal Soofi and Balochistan Advocate General Amanullah Kanrani. Balochistan government and the TCC developed differences over the valuation of the gold and copper reserves in Riko Diq area of district Chaghai.
The team of legal experts raised objections after the TCC moved the ICC against the Balochistan government for rejecting its application for mining lease, upon the completion of the feasibility study.
The TCC has also filed a request for arbitration at the International Centre for Settlement of Investment Disputes, against the federation.
The lawyers also dispute the jurisdiction of the ICC in taking up the matter. Until the Supreme Court decides the case against the legality of the agreement, it would not be in order for the ICC to take up the matter, the lawyers submitted.
The lawyers argue that the joint venture agreement between the Balochistan Development Authority and the TCC was ‘void and illegal’ because it entailed statutory independence of the licensing authority, and was against public policy. The lawyers say it was not a ‘concession agreement’ as popularly projected in media.
“It is in fact an agreement having an unlawful consideration to restrict the operation of an existing law – the 1970 Mining Rules,” the objections stated.
To TCC’s contention that it has a right to mining licence after completion of feasibility study, the lawyers submit that, in any case, the agreement did not guarantee grant of mining licence as a matter of right or in derogation of mining rules.
The lawyers add that the TCC could not have opted for international proceedings for it did not get approval of the Supreme Court.
The court, in its May 25, 2011 order, had allowed the Balochistan government “to expeditiously decide Tethyan’s application for grant of a mining lease and submit a report.”
Taking up the case again
After it adjourned the matter, members of Jamaat-i-Islami and the Workers Party, through their lawyer Raza Kazim, had asked the Supreme Court to take it up again, saying the TCC wanted to bypass the apex court.
The international arbitration tribunal would have no option but to give a decision in favour of TCC, which could lead to claims of billions of dollars in damages, if the court further delayed the proceedings, Kazim had submitted.
He asked the court to declare the agreement between the Balochistan government and TCC ‘illegal.’ His application would be taken up on February 2, according to a Supreme Court notice.
Published in The Express Tribune, January 30th, 2012.
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Little do most Pakistanis know that SPD has the paraphernalia to mine and extract gold and copper ores from Reko Diq and elsewhere.This agreement,if implemented,will drastically benefit TCC but wont bring Pakistan much in terms of revenues.Balochistan govt is in a financial quagmire and it is virtually impossible for the provincial govt to even make a 25% initial investment for the project as the agreement entails.TCC will grant loan to the govt at 25% interest rate to make that investment.Furthermore,TCC is not ready for the extracted ore to be refined in Pakistan.This project is supposed to create stupendous employment in that region but that wont be the case if the agreement goes ahead.Dr Samar Mubarakmand must head this project.The issue of sharing revenues with a foreign corporation simply wont arise if the project is conducted indigenously.I hope the SC manges to protect this enormous asset of ours.Pakistan wont get anything but 2% royalty for this project if TCC gets the license.
@ahmad: Hope and pray that rosy figures are correct. We have been listening to Thar coal reserves -- 175 billion tons BUT WHAT GOOD IS IT TO US? Let's be realistic about our natural resources! We don't have necessary funds, experts and equipment to develop gold or mega coal mine. TCC litigation won't let any donor agency come near Reko and we would end up like Steel Mill fiasco. Remember we were getting rid of Steel Mill for so called peanuts but ended spending Rupees 22 billion and now need another Rs. 8-10 billion to waste. The giant projects can only be run by private sector! Govt has miserable failed to run PIA, Railway, Steel Mill to name a few.
@JS: You should be glad this happened at a timely manner. Currently valued at above 288 billion some argue that with the price of gold ever increasing against the dollar, the mines are worth 500 BILLION dollars in actual with only the surface gold estimated at 65 billion dollars. The license for it was given for only a 100 dollars, yes thats 100, and the government was informed by the company that the total estimate of gold there is 5 billion dollars. So i am thankful that this intervention by the S.C took place otherwise Pakistan would be have been robbed of an asset which is practical terms is more than the oil of iran, saudia arabia and UAE put together.
We all know why tcc doesnt want to give up this deal which they have achieved with the help of our crooked politicians to fill up their pockets with billions of unclaimed dollars and there have been reports that they have been mining outside the assigned area just to make an extra buck. because let me through this out, when they made the deal it was thought that it would b a cake walk coz there wouldnt be anyone to fights for the interest of pakistan as per history and they make unprecedented amount of loose money and so they have allegedly reported the facts inaccurate during the feasablity report and were sure about getting away with it. The SC intervention has ruined their plans of officially proclaimed robbery and now they are presenting their overstated expenses on their feasability report still trying to get away with it. Seriously do u really think we should b happy with TCC taking the nuts and giving us just the shells and expect us to be happy and clapping about the fact that atleast there is an foreign investment or shuold i say a foreign invitation to loot.
the fight before the supreme court of pakistan is for the best deal for pakistan with reko diq...currently, the deal is not as sweet as everyone thinks it is...it is not necessary that the GOB should do the job itself....let foreign companies come in - but through an open, competitive bidding process with full transparency..and as said earlier, it has to be the best deal for the people of pakistan and balochistan in particular...please understand that the supposed 25% of the profits after production of the copper and gold begins if after the GOB has paid back 25% equity in the mining venture...and the supposed profits are to be given over a period of 56 years with a paltry 2% net royalty...that surely isnt beneficial for our future, is it??
@ishtiaer hussain: "............This is exactly the reason why no companies of international repute are coming to Pakistan for long-term investments." ------ YOU MEAN TO SAY THAT THEY SHOULD HAVE AN OPEN HAND, A CARTE BLANCE TO COME AND PLUNDER AND LOOT ?
The Baluchistan Mining Concession Rules, 2002 states the procedure to do mining business and other provinces have similar rules. Kindly note that there is no bidding process because there is NO DATA available with govt. If one believes that there is potential for a certain mineral then first step is to acquire a Reconnaissance Licence FOR A PARTICULAR AREA OF INTEREST after payment of prescribed fee. Then a Exploration Licence is acquired by paying fee again. The last step is to obtain a Mining Licence again after payment of fee.The fee for each licence and royalty are clearly stated in the Mining Rules. One licence creates a right for the other in line. TCC was not here for a picnic party and spent a couple of hundred million dollars for business deal. They were very generous by agreeing to share 25% profits with Baluchistan Govt because the Mining Rules do not require profits to be shared. I AM GLAD THEY HAVE OPTED FOR THE INTERNATIONAL ARBITRATION INSTEAD MAKING ILLEGAL PAYMENTS TO OUR ??. No foreign investor or donor agency will now fund Reko project and as usual Pakistan will suffer by not getting a world class project going. NO FEE, NO ROYALTY, NO TAXES NO JOBS!!! PLUS PAY A BILLION PLUS DOLLARS AS DAMAGES TO TCC.
TCC are acting as bullies ----- this is our land and our mines and whatever lies above or under our lands is our sole property and gives us rights to decide who may or who may not be our partner in whatever venture we wish to undertake. TCC should be dismissed merely on the grounds of mistrust.
@JS:
You are absolutely right, dear. They want mining rights for some government agency so that bureaucrats and politicians can fill their pockets with money from the project. This is exactly the reason why no companies of international repute are coming to Pakistan for long-term investments.
this is how we attracted and treat investors in this country. Keep an eye on this...this is exactly what will happen if any large enough company is stupid enough to show any interest in Thar coal.