Photos: As attached
The Tethyan Copper Company, a joint venture between Chilean mining company -Antofagasta and Canada’s Barrick Gold Corporation has filed claims for international arbitration before the Wold Bank’s International Centre for Settlement of Investment Disputes in 2012, after the Balochistan government rejected a leasing request from the company for the Reko Diq (sandy peak) project.
Now, an international arbitration court has imposed perhaps one of the biggest penalties in history on a nation – $5.976 billion, for unlawful denial of a mining lease to the company in 2011. The case between the company and Pakistan has been ongoing for the past seven years. Reko Diq is a small town in the Chagai district of Balochistan, and is close to the border with Iran and Afghanistan.
The mine in Reko Diq is renowned for it’s vast gold and copper reserves. It is believed to have the world’s fifth largest deposit of gold. The Tethyan Copper Company had submitted an extensive and detailed banking feasibility study as well for mining development in this region, as well as a mining lease application in February 2011. An environmental and social impact report had been submitted alongside the vital documents.
The project was dropped in November 2011, when the Balochistan government rejected the application by Tethyan Copper Company’s local operating subsidiary for a mining lease for Rek Diq. The ruling by the ICSID comes at a crucial juncture for Pakistan, when the latter is in a critical position, and is badly in need of reforms. Besides, the IMF (International Monetary Fund) had agreed to a $6 billion bailout package to the country.
Prime Minister Imran Khan asked for the formation of a commission to investigate and fix responsibility, for the massive loss to be borne by Pakistan.The Attorney-General and the provincial government of Balochistan are studying the financial and legal implications of this penalty.