TUESDAY JUNE 26: Islamabad's position in relation to Reko Diq project: Balochistan government to be held responsible if ICA rules in favour of TCC

ISLAMABAD: The federal government has made it clear to Balochistan government that if the International Court of Arbitration (ICA) decides in the favour of Canadian and Chilean joint venture Tethyan Copper Company (TCC) with respect to Reko Diq, the responsibility will fall on the provincial government.
Sources in the Ministry of Petroleum (MoP) told Business Recorder here on Monday that the Ministry has given following two proposals to the provincial government of Balochistan: first, the federal government will not pay any damages if the international court rules in favour of TCC and Balochistan should pay the compensation and secondly Balochistan should re-negotiate with TCC, which filed the case last year, and find an amicable settlement to the dispute.
The Supreme Court of Pakistan is also hearing a case pertaining to the project. TCC, which is represented by Antofagasta of Chile and Barrick Gold of Canada, holds 75% shares in the project while Balochistan has a 25% stake. TCC working on the development of one of the major copper-gold mine at Reko Diq, Balochistan on November 29, 2011 following the formal refusal for the Mining Lease Application (MLA) by the provincial government had taken the issue to the international arbitration court.
According to the feasibility report submitted by TCC to the provincial government, the mine has total reserves of 22 billion pounds of copper and 13 million ounces of gold and the mine life is 56 years. US $3.3 billion investment would be needed initially to start mining production. The major cost includes development of a 682 km long pipeline from the site to Gwadar for transport of goods to international markets. The government of Balochistan in October last year had rejected the application of the TCC as the provincial government itself wanted to complete the project and in its annual budget 2011-12 has allocated Rs 8.5 billion for establishing a gold/copper refinery.