Reko Diq project dispute: TCC rules out out-of-court settlement with Balochistan

Fears new government may also cause trouble for the company.


Zafar Bhutta November 05, 2012

ISLAMABAD: Tethyan Copper Company (TCC) – a Canadian and Chilean joint venture – has ruled out an out-of-court settlement with the Balochistan government in a dispute over multi-billion-dollar Reko Diq gold and copper mining project located in Balochistan, say sources.

The company has expressed fears if it reaches a settlement it can land in trouble again after a new government comes to power in elections next year, say sources. “How can you guarantee that the upcoming government will not cause trouble for us,” sources quoted TCC officials as saying.

The row between TCC and the Balochistan government emerged after the Musharraf government vacated office and current coalition took over in 2008. Earlier, TCC was awarded the project with mining rights and it signed a joint venture agreement with Balochistan during the Musharraf regime.

TCC has approached the International Centre for Settlement of Disputes in Washington DC, which will conduct a hearing of the case today (Tuesday). Pakistan has hired foreign legal experts including Arther Marriott and Sherry Blair, the spouse of former British prime minister Tony Blair, in the case. Legal experts also include Aamir Bilal Sufi, Mehnaz Malik and other lawyers.

The Balochistan government will bear expenses of the legal battle that amount to Rs450 million. The central government has told Balochistan that it will also be responsible for payment of damages if TCC wins the case.

On its part, Balochistan has cautioned the central government that it should stay away from reaching a settlement with TCC, saying the province has full rights over the copper and gold project.

According to sources, the province moved into action when the Ministry of Petroleum and Natural Resources sent a summary to the Council of Common Interests (CCI) – an inter-provincial body – in an attempt to find an amicable settlement of the case.

“The 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 a communications sent by the provincial government as saying.

Balochistan also wants to wait for a decision of the Supreme Court in this connection before going for a settlement.

In the international court, TCC has claimed damages after Balochistan refused to give the go-ahead to extracting copper and gold from the project site.

The central government desires that TCC, comprising Antofagasta of Chile and Barrick Gold of Canada, holds 75% shares in the 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.

In 2009, TCC wanted the province to bear 25% financial obligations according to its share in the project, but the province refused. TCC was also 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.

TCC management did not respond to queries sent to it about refusal to reach an out-of-court settlement with Balochistan.

Published in The Express Tribune, November 6th, 2012.

 

COMMENTS (1)

just_someone | 11 years ago | Reply

TCC is absolutely in the right here and Balochistan is completely screwed. They will pay crazy damages and also make it impossible to get foreign firms to take the risks of investing in Pakistan. They should have opted for an out of court settlement years earlier to get this project rolling.

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ