KARACHI: Pakistan’s federal government will file a reference in the apex court next week for the revival of Reko Diq, a gold and copper project located in Balochistan province, the attorney general said on Thursday.
The Reko Diq project in southwestern Pakistan, which hosts one of the world’s largest undeveloped copper and gold deposits, was suspended in 2011 after Pakistan denied a joint venture, the Tethyan Copper Company, comprising Barrick Gold of Canada and Antofagasta Minerals of Chile, a licence to develop it.
Pakistan’s Supreme Court blocked Tethyan Copper in 2013 from developing Reko Diq following a court case over how the contract had been awarded.
But Barrick Gold ended a long-running dispute with Pakistan and is set to start to develop the project under an agreement signed earlier this year.
Under the out-of-court deal, an $11 billion penalty slapped against Pakistan by a World Bank arbitration court and other liabilities will be waived and Barrick and its partners will invest $10 billion in the project, Pakistan’s then Finance Minister Shaukat Tarin had said.
On September 30, the federal cabinet approved filing a reference in the Supreme Court for the revival of the project.
“The reference will be filed after October 9 ... and all the consultations have been completed,” Attorney General Ashtar Ausaf Ali told Arab News. “This reference and the agreement [signed with Barrick Gold] will be put before the apex court with the question of whether it negates the earlier judgment of the Supreme Court of Pakistan.”
The federal government plans to seek the court’s opinion on two questions:
“Whether the earlier judgment of the Supreme Court, the Constitution of Pakistan, laws or public policy prevent the federal and provincial governments of Balochistan from entering into the Reko Diq Agreements or affect their validity?' and 'If enacted, would the proposed Foreign Investment (Protection and Promotion) Bill, 2022 be valid and constitutional'," Pakistan's state-run media APP reported on Wednesday.
The International Centre for Settlement of Investment Disputes (ICSID) in 2019 announced a huge award of $5.8 billion against Pakistan in the Reko Diq case, filed in 2012 by Tethyan Copper. Damages included compensation of $4.087 billion by reference to the fair market value of the Reko Diq project at the time of the mining lease denial, and interest until the date of the award of $1.753 billion. The Tribunal also awarded TCC just under $62 million in costs incurred in enforcing its rights and also imposed another fine of $4 billion.
However, in March this year, the government of former Prime Minister Imran Khan signed an agreement with Barrrick Gold to avoid the $11 billion penalty.
The project will be operated by Barrick, which owns 50% stakes, while 25% shares each will be owned by the Balochistan provincial government and Pakistani state-owned enterprises.
The first production of copper and gold is expected in 2027-2028.
