ISLAMABAD: Balochistan has told the central government that it should stay away from striking a settlement deal with the Tethyan Copper Company (TCC) over the multi-billion-dollar Reko Diq gold and copper mining project, saying the province has full rights over the project.
According to sources, fresh differences between the Balochistan government and the central government erupted when the Ministry of Petroleum and Natural Resources sent a summary to the inter-provincial Council of Common Interests (CCI) in an attempt to find an amicable settlement of a case filed by the TCC – a Canadian and Chilean joint venture which was awarded the project – in the International Centre for Settlement of Disputes in Washington DC.
“Balochistan government owns the multi-billion-dollar Reko Diq project and the central government has no right to pursue settlement of the case by seeking approval from the CCI,” sources quoted as saying a communications sent by the provincial government.
A case about the project is also being heard at the Supreme Court. According to a senior government official, Balochistan wanted to wait for a decision of the court before going for a settlement over Reko Diq.
In the international court, TCC filed a request for arbitration last year in a dispute over mining rights, claiming damages after Balochistan refused to give the go-ahead for extracting copper and gold.
The central government is not willing to pay any damages if TCC wins the case. Instead, it wants Balochistan to consider re-negotiating the deal to reach an amicable settlement with the company. Sources said the law ministry had suggested that the provincial government should pay damages if the international court ruled in favour of TCC.
Following the law ministry’s opinion, Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain has sent a summary to the prime minister, seeking approval that Balochistan should bear the cost of damages.
The central government has also asked the province to pay fee of legal experts amounting to Rs450 million. Former prime minister Yousaf Raza Gilani had approved a summary in this regard, requiring Balochistan to pay fee of legal experts and damages.
TCC, comprising Antofagasta of Chile and Barrick Gold of Canada, holds 75% shares in the Reko Diq project while Balochistan has a 25% stake.
TCC claims it has invested over $500 million in exploration, scoping and feasibility studies. Total investment is projected to reach $5 billion over five years.
However in 2009, TCC and Balochistan got embroiled in a row because of a couple of issues. First, TCC wanted the province to bear 25% of financial obligations according to its share in the project, but the province refused. Second, TCC was concerned about purported involvement of a Chinese company in the project.
The mine has estimated reserves of 11.65 million tons of copper and 21.18 million ounces of gold.
Published in The Express Tribune, September 12th, 2012.
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Balochistan even can not run a flour milll, how can we expect from him to run a Copper Gold project.. this is just a blackmailing by CM balochistan and nothing else... sort of disgusted resistance has made Pakistan defamed among the global investors. Non of them are willing to invest even a single Dollar in Pakistan.. and this is just because of nepotistic policies made by the educated but not civilised Pakistani politicians.
FYI sir TTC in its feasibility report has shown contradictory values of the total reserves found in Reko Diq. The reserve are thought to be much higher than the reported values. Hence the Baluchistan govt decided not to beleive on TTC's report and carry out the project independently or with the help of Chinese.
@Hafiz Shah Ali: You cant do that anymore when you have already signed a contract with a firm and are just reneging on it, which is what Balochistan is doing, to get more money from the company. This is classical behavior of authorities in third world countries. They beg firms to invest and take on the risk. If it doesnt work out, the firm pays and they dont care. If it does work out and the firm is supposed to reap the benefits of its risky investment, they claim one thing or another and ask for more money. This is just greed of the Baloch government. They need to understand no one will touch any investment in BL with a pole if they do this. Neither the Balochistan Govt nor the Center has the money to develop the resources of Balochistan. These are incredibly risky investments requiring billions to be paid. You need big companies to do this and by treating them like this and reneging on an agreement, you are setting yourself up for decades more of poverty. The natural resources of Balochistan arent worth squat if they are not extracted.
Go out with international bidding for the project.Have an independent international consultant draw up the project report and bid document and award the project to the best offer.
So Balochistan didn't honor it's joint venture agreement and would not fund it's share of the cost and then decided that with rising copper prices it could bully TCC out of the picture and resale the mining rights to the Chinese. Guess again -- by most accounts TCC will win their lawsuit in International arbitration and no international mining company will touch that project with that liability hanging over the project.