Balochistan government to pay for the damages if the international court rules in favour of TCC

Balochistan government to pay for the damages if the international court rules in favour of TCC

Saturday, April 7, 2012: Reko Diq gold and copper mining project continues to remain the bone of contention between TCC and Balochistan government. In a recent occurrence, the Balochistan has been left alone by central Government,
who held that Balochistan will have to bear all the damages if the international court of arbitration decides case in favour of Canadian and Chilean joint venture Tethyan Copper Company (TCC).

Earlier, the Ministry of Petroleum and Natural Resources had sent a summary containing two proposals to the prime minister for approval. According to the summary, the central government will not pay any damages if the international
court rules in favour of TCC and Balochistan should pay the compensation.

The other proposal is that Balochistan should re-negotiate with TCC, which filed the case last year, for finding 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 claims it has invested over $500 million in exploration, scoping and feasibility
studies on the project. Total investment is projected to be $5 billion over a period of five years.

TCC and Balochistan reached a deadlock in 2009 because of two issues.

First, TCC wanted Balochistan to bear 25% financial obligation according to its share in the project. But the province refused to take any financial responsibility.

Second was the purported involvement of a Chinese company in the project. A letter written by Pakistan’s Ambassador to Chile Burhanul Islam to then Petroleum Minister Naveed Qamar in September 2009 says, “I do not think that it
is a good idea to entertain Chinese company MCC for the same mining site which has been offered to TCC with all commitment, responsibility, investment and legal claims. The Chinese, if aspiring for a project, could be offered a new mining site.”

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Posted by Wajahat Javed on Apr 8 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry