WASHINGTON (Reuters) – The Tethyan Copper Company (TCC) said on Sunday it was ready to discuss the possibility of a negotiated settlement with Pakistan over a nearly $ 6 billion damages case decided in its favor.
On Friday, an arbitration tribunal of the World Bank’s International Center for Settlement of Investment Disputes (ICSID) awarded approximately $ 5.9 billion in damages to the TCC in connection with the arbitration claims it ‘it filed against Pakistan following the denial of a mining lease for the Reko Diq project in Pakistan in 2011.
Read: Pakistan asked to pay mining company $ 5.9 billion in Reko Diq case
Tethyan Copper Company is a joint venture equally owned by Antofagasta plc and Barrick Gold Corporation, one of the world’s mining giants.
The damages include compensation of $ 4.087 billion against the fair market value of the Reko Diq project at the time of denial of the mining lease, and the award of interest of $ 1.753 billion. The court also awarded TCC just under $ 62 million for costs incurred in asserting its rights.
“We are pleased to reach this milestone after more than seven years of arbitration,” Ivan Arriagada, CEO of Antofagasta plc, said in a statement.
âWe remain open to discuss the potential for a negotiated settlement with Pakistan and will continue to protect our business interests and legal rights until this dispute is concluded,â said William Hayes, President of TCC.
The award is binding on the parties. There are limited grounds for challenging the award under the ICSID Convention. The proceeds of the award are not expected to be recognized in Antofagasta’s financial statements until they are received.
Prior to the rejection of the mining lease application, TCC had completed a feasibility study showing that Reko Diq was one of the largest untapped copper and gold deposits in the world, and had a potential lifespan of more than 50 years and an estimated initial investment of over $ 3 billion.
ICSID, which provides conciliation and arbitration services for international investment disputes, issued its judgment Friday in a 700-page ruling against Pakistan.
The case of the Reko Diq gold and copper mining project was decided by the Supreme Court of Pakistan in its original and appellate jurisdiction simultaneously in 2013 and 2014.
Initially, the gold and copper resources were discovered by another leading global resource company, BHP Billiton, after signing a joint venture with the Balochistan Development Authority for mineral exploration at Chagai Hills in 1993.
The deal has led to accusations of shady deals, alleged corruption, bribes and bribes from foreign investors, which have cast a shadow on the future of the Reko Diq project. The media claimed that Reko Diq’s $ 260 billion assets were sold for nothing.
The alleged irregularities included the signing of the Reko Diq agreement by the governor of the province without cabinet approval, the purchase of project files by Antofagasta and Barrick Gold for $ 200 million, the approval of a 30-year lease without taking into account the expiration of the exploration license, the relaxation of mining rules, mysterious transfer of all of Balochistan’s share without any compensation / consideration, conduct of 270,000 meters of drilling in violation of the mineral rulers of Balochistan, etc.
Some reports describe her as “the mother of all business and the grandfather of all corruption cases in Pakistan, put together.”
It was alleged that Balochistan was in debt to pay most of the expenses but only had a 25 percent share. It was alleged that other parties to the joint venture acquired 75 percent of the rights to the project without paying anything to the governments of Pakistan and Balochistan.
During the proceedings, the mining committee of the provincial mining department rejected TCC Pakistan’s request and did not authorize the conversion of the exploration license into a mining license. The government of Balochistan has decided to exploit certain pockets itself.
Feeling aggrieved, TCC Australia filed a request for specific performance of the joint venture as well as a request for provisional relief with ICSID under the 1998 Pak-Australia bilateral investment treaty.
TCC has also filed a specific performance request with the International Chamber of Commerce, requesting an instruction for the issuance of a mining lease for 14 Reko Diq deposits located within an area of ââ99 kilometers.
The Supreme Court of Pakistan, however, declared the joint venture agreement illegal, null and void, which was executed in violation and contrary to various statutory provisions. Several agreements resulting from the original agreement were also declared illegal and void.
Posted in Dawn, July 15, 2019