KARACHI: State-controlled China Minmetals Corporation has shown interest in partnering with Tethyan Copper Company (TCC), a consortium formed by Chilean and Canadian companies, adding yet another twist to the Reko Diq project.
Minmetals is interested and is studying the project, Santiago-based newspaper La Tercera quoted President Minmetals Zhou Zhongshu as saying at a recently organised seminar.
CEO TCC Gerhard Von Borries, however, denied any such developments, reaffirming that the Reko Diq deal is only between Antofagasta and Barrick Gold, the two mining stalwarts, and the provincial government of Balochistan. “This is the way it will stay,” asserted Borries.
Speculation has been rife in Pakistan as to the fate of the Reko Diq project which recently attracted attention of the Supreme Court after reports that prized assets of the country were being sold at a very low price.
The Supreme Court last week declined to grant a stay order in awarding the Reko Diq mining contract and adjourned the hearing till December 15.
Minmetals and TCC, among other companies, own sites on the Tethyan belt in Chagai district of Balochistan. However, TCC is the only company that has completed a feasibility study for operating a mine in the area and sent it for approval to the provincial government.
The company will seek a mining licence after the feasibility study is approved, according to Borries.
The area under consideration for mining runs in the Tethyan belt, a major mineralised zone that extends across central and southeast Europe, Turkey, Iran, Pakistan, through the Himalayan region into Burma, Malaysia, Indonesia and Papua New Guinea.
It is estimated that the mine will produce 200,000 tons of copper and 250,000 ounces of gold annually. The company site holds reserves of 2.2 billion tons of gold and copper.
Chile is China’s second largest trading partner in Latin America and trade between the two countries last year rose 2.1 per cent to $17.72 billion.
What is at stake?
Tethyan Copper Company plans an initial investment of $3.3 billion in the 56-year mining project once the government accepts the feasibility report.
The provincial government will invest 25 per cent and in return will get more than half of the total profits made from the project, according to TCC.
The federal and provincial governments will get 52 per cent of the profits from return, royalty and taxes while TCC will get 48 per cent, informed TCC.
Published in The Express Tribune, December 4th, 2010.