QUETTA:
The Balochistan government is under pressure to accept a negotiated settlement in a dispute with a company – Tethyan Copper Company (TCC), which was engaged in mining at Reko Diq Copper and Gold Project and which now seeks monetary compensation for federal and Balochistan governments’ ‘breaches of contract and treaty rights’ at an international court.
During the recent two-week long hearing of the case, after which International Centre for Settlement of Investment Disputes (ICSID) in Paris reserved its judgment, the Pakistani legal team was also joined by political leadership – apparently for an out-of court settlement.
“Two committees were formed at federal and provincial level which went to Paris with a sole agenda—to have a negotiated deal with the TCC and out of court settlement,” an insider said on the condition of anonymity.
“The government committees had a separate briefing with the TCC and its parent companies – Antofagasta and Barrick Gold on Reko Diq project,” he said.
He said much before the hearing, the Attorney General of Pakistan had sent a letter to the Balochistan government, saying the case of Pakistan and Balochistan was weak and the latter was likely to lose out. “The AGP said the government would have to pay a fine of billions of dollars. So it was better to make an out-of-court settlement,” he said.
He said the Balochistan government was trapped now as it was trying to negotiate and also protect the interests of its people so that they would not be equally blamed for putting the invaluable resources on sale at throwaway prices.
Upon his return from Paris, Balochistan Chief Minister Dr Abdul Malik Baloch had said he would protect the interest of his people. He had not revealed anything about the possible deal but said he would take a decision in the best interest of Balochistan.
A government official said that Balochistan government is also trying to resolve the issue with the TCC before International court gives verdict. The TCC has invested over 220 million US dollars in the project since 2006. “The company now claims around 12 billion US dollars in monetary damages,” a source told The Express Tribune.
Another government official said the TCC was not willing to work in Pakistan now. “Government is trying to resolve the issue because if the government is found guilty, then we have to pay billions of dollars in fine,” he said.
He said that since Balochistan did not have resources to pay such a huge amount, the federal government would pay the money from Balochistan government’s funds. Citing previous examples of federal government’s discriminatory policies, he said: “The federal government will pay the money from Balochistan’s National Finance Commission (NFC) Award or Federal Public Sector Development Programme (PSDP),” he added.
Sources in the provincial government said federal government did not care whether the contract was finalised with the TCC or a Chinese company and it only wanted to start the project to get maximum amount.
“Not a single person in Balochistan will agree to have a contract with Chinese mining companies,” an official said, adding that the companies involved in Saindak project at Chagai and Lead and Zinc Project in Dudar, Lesbela did nothing for the local communities or provincial economy ‘but ruthlessly exploited the resources.’
Published in The Express Tribune, October 25th, 2014.
COMMENTS (7)
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Uneducated politicians and grade 22 officials having no professional qualifications sign agreements and lo this is the result. Pakistan could have taken assistance from Iran which have already completed such projects on her own.
chine=pakistan ,pakistan#(isnot equal to)china.
What possible incentive does TCC have to accept a Pakistan out of court settlement? You failed to honor the written agreement on the project so why should they place value on a new written agreement with Pakistan. They don't trust you .. they don't trust your judicial system. It's likely in their best interest to get an international judgement which effectively will put a lien on the project until the judgement is satisfied .. that means your going to have to come up with several Billion dollars before any credible international investor develops the project. . This maybe the largest financial disaster ever faced by Pakistan - all caused because you tried to steal a project after TCC had invested hundreds of millions of dollars. What's really disappointing is that Iftikhar Muhammad Chaudhry appears to have knowingly participated in this attempted theft. Time for an independent investigation.
Developing a low grade copper deposit, with an average copper grade of 0.41% and gold grade of only 0.22 g/ton in a backward region requires a large scale, state of the art mining and processing unit which would cost millions of dollars. The govt of Balochistan already had 25% stake in the agreement with TCC. With the inconsistent policies at the federal and provincial level, Pakistan has lost a golden chance to develop Reko Diq as a world class mine and show case it to attract further foreign investments in the energy and resource sector. The political leadership of Pakistan should frame clear rules and policies which will and ensure that the country as a whole and the local community in particular gain from such projects through taxes,infrastructure development and employment.
The valuations being put on are farcical..politicians have taken kickbacks so they will not end ths contracts if forced thy will reward antofagasta £ANTO-L..what was total investment by the miners in question ..a fraction of the amounts they are wanting there total Capex was no more than $100 million and that is being top end they are asking for multi billions ..The whole mines do not contain such riches
lets see what good the Present CM does for the people of Baluchistan. It is a shame that foreign companies of China are exploiting the resources of poor Balochis and the federal government is a witness to the looting of national resources. First you make an agreement which has ulterior motives of personal gain, so how can you defend the country interest while fighting a case in international courts. What a shame as we are ready to sell our resources for a personal gain to make few bucks. The people who did this agreement must be trialed and punished, otherwise this practice will go on and we will give excuses for every robbery on the national interest.
exploitaton of our precious resources will continue untill unless we get rid of our corrupt politicians! Who always use their power for self aggrandizement and enjoy perks