‘Reko Diq reference’: Country to pay $9bn if deal not inked by Dec 15, SC told

ISLAMABAD: The counsel for Barrick Gold informed the apex court that if by December 15, 2022, the agreement is not signed between Balochistan and Barrick Gold then Pakistan would have to pay over $9 billion.

In 2019, the World Bank’s arbitration tribunal imposed a penalty on Pakistan for unlawful denial of mining. After a decade-long legal battle, Pakistan announced the out-of-court settlement with Barrick Gold in March. Antofagasta agreed to exit the project if Pakistan pays him $900 million.

Makhdoom Ali Khan, representing Barrick Gold, stated that after the contract Pakistan would also be saved from paying the expected fine of the international court of arbitration.

A five-judge bench, headed by Justice Umar Ata Bandial and comprising Justice Ijazul Ahsan, Justice Muneeb Akhtar, Justice Yahya Afridi, and Justice Jamal Khan Mandokhail, on Tuesday, heard the presidential reference on the Reko Diq project.

Makhdoom contended that the provincial government can enter into international agreements, but they could not have sovereign agreements with any country.

The chief justice noted that as the federal government is a shareholder in the reintroduction project of Reko Diq; therefore, the provincial government’s agreement with the international company is not an issue.

Amicus curiae tells SC how Reko Diq settlement benefits country

Makhdoom said that his client wanted the Supreme Court’s opinion in order to avoid legal complications. He contended that the default of Pakistan is still looming, adding Barrick Gold does not do business to save countries from default. He stated that first time in the history of Pakistan a massive foreign investment worth $4.5 billion is taking place in the shape of the Reko Diq project.

The chief justice questioned whether Barrick Gold is keeping an eye on the economic situation of the country. He asked the counsel that instead of scaring the Court, tell about the transparency in this project. He further asked Makhdoom: “Don’t tell the court why the country is suffering due to the wrong policies of the economic wizards”.

Justice Ijaz inquired if there is the guarantee that such kind of awards is not announced against Pakistan in the future. He remarked that Chagai from where the gold will be extracted is close to the borders of Iran and Afghanistan.

Makhdoom said that the government of Pakistan will provide security for the project, while the internal security arrangements will be made by the company itself. He said copper and gold ores will be sent abroad through seaports, adding Barrick Gold will also lay an underground pipeline from Balochistan to the port for its transportation. He further said that Barrick Gold will also construct roads and community centres for the development of the locals. Besides that, the project will create 4,000 jobs, he added.

The case was adjourned until today (Wednesday).

Copyright Business Recorder, 2022