Govt likely to re-auction Reko Diq’s copper, gold deposits

QUETTA: The Balochistan government, which has been asked by a legal team to finalise modalities to re-auction the disputed copper and gold deposits in Reko Diq, will hire foreign experts to start the sale process, a senior official said on Monday.
“We have various options …we are working with a different approach and the best deal will be considered,” Abdul Malik, Chief Minister of Balochistan told reporters.
Australia-based, Tethyan Copper Company (TCC), a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold, initiated international arbitration proceedings against governments of Pakistan and Balochistan in 2011 over a dispute on mining licence of Reko Diq after the Supreme Court had cancelled all agreements signed with the company on request of the then provincial government.
The court viewed that those deals did not properly protect rights of Balochistan.
Malik said the legal team, which is eyeing an out-of-court settlement with the TCC, has recommended initiating the process before an expected out-of-court settlement on damages claims.
“All the mines blocks are unlocked after the TCC gave up its demand for the leasing rights on Reko Diq,” Malik said. “We will soon issue new auctions tenders.”
The chief minister said his government is considering a proposal to break Reko Diq copper and gold deposits in three to four blocks and “put them on phase-wise auctions.”
“Initially, we can offer two major blocks to the international investors and in later stage remaining 12 blocks can be (put) on sale,” he added.
The TCC was granted exploration licence for the deposits in Reko Diq site in Balochistan in 2006. Under the deal, the Tethyan owned a 75 percent stake in the project costing $3.3 billion, with the government of Balochistan owning the remainder 25 percent.
Reko Diq, which means ‘Sandy Mountain’ in Balochi, holds an estimated 5.9 billion tons of mineral resources, with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams a ton.
Malik said behind-the-scenes efforts are underway to resolve this dispute amicably before the court verdict is announced in order to avoid negative impact of such arbitration on the concerned parties.
The chief minister said the government and its legal team will press on the TCC to agree on an out of court settlement on damage compensation. He declined to spell out the compensation amount, saying both the parties have signed a non disclosure agreement to avoid further “arbitration on the issue.”
“But we have an idea what they will ask for, and we will challenge their figure,” Malik said.
The government’s legal team expects the International Centre for Settlement of Investment Disputes (CSID) to take two to three months to announce its arbitration verdict.
Ahmer Bilal Soofi, the head of government’s legal team said the tender process should start soon.
“The TCC has shown its willingness to talk on an out of court settlement or at least to talk on how to stop further arbitration,” Soofi said. “We have advised the government to sort out technical issues and re-tender the fields before damage claims become a major point of contention.”