A joint venture between miners Antofagasta and Barrick Gold expects a decision on a key mining licence in Pakistan by mid-September, potentially paving the way for a major copper and gold project in the country's poorest region.
Tim Livesey, chief executive of the Tethyan Copper Company (TCC), which has a 75 percent interest in the Reko Diq project in the south-western Balochistan province, said the group was still awaiting a formal response from the provincial government after filing a feasibility study a year ago and a mining lease application in February. But he said Tethyan had had meetings with the federal and provincial governments in recent weeks and was confident a decision would be reached by the September 22 deadline.
The response has been delayed by the Supreme Court, which had barred the Balochistan government from giving approval for the Reko Diq license until a separate investigation ended. The court in May, however, allowed the government the right to decide on the lease.
"We are hopeful we will receive formal notification on the mining licence in September and that will allow us to then carry out the detailed discussion with the government of Balochistan, as a partner rather than as a regulatory body, and also with the federal government to ratify taxation agreements and so on," he said.
"We are hopeful and we have indication that we will get positive feedback... We hope that they see the sense in delivering an opportunity for us to answer any questions they may have, so that we can move forward." Livesey said Tethyan would negotiate but would not increase the provincial government's equity stake as part of negotiations, on the grounds the project would cease to make economic sense.
"The economics dictate that a 25 percent stake already gives the government of Balochistan and the government of Pakistan more than 50 percent of the returns on the project," he said, adding the venture could still negotiate on how returns are distributed between royalty and equity and work out a means of reducing the government of Balochistan's liability.
"We are looking at our financial models. We have not had a formal reply from the government of Balochistan, so we do not know exactly what their issues are, but once we get that we will be looking at them one by one." Reko Diq holds an estimated 5.9 billion tonnes of mineral resources with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams a tonne, according to data released by Antofagasta.