Islamabad: Mar 31, 2022 (TNS): Nation thanks for Pak Army;Pakistan evades $11b Reko Diq penalty.Whether it is peace or war, the role of Pakistan Army has always been exemplary and historic.The $11b Reko Diq fine imposed on Pakistan has been lifted due to the special efforts of the Pakistan Army officials.The reason for the negligence and indifference of political figures was that billions of Pakistani assets were about to be auctioned abroad.Needless to say, a miracle happened.Not only has Pakistan escaped the $11b fine imposed, but now a revolution has been announced in Pakistan’s economic development, the details of which are contained in the new agreement.The Reko Diq agreement has been reached after several rounds of negotiations over the past three years.The credit for this goes to the Pak Army officials .Who has done great good to the Pakistani nation by saving Pakistan from going bankrupt in the world.The Prime Minister of Pakistan Imran Khan in his tweet said that after 10 years of legal battles and negotiations, I finally congratulate the people on the successful agreement with Barrack Gold for the development of Reko Diq . About ً 11 billion in fines have been set off. “I congratulate the nation & people of Balochistan on successful agreement with Barrick Gold for development of Reko Diq mine after 10 years of legal battles and negotiations,” Prime Minister Imran Khan tweeted on Sunday. “Penalty of approximately $11 bn is offset, $10 bn will be invested in Balochistan creating 8,000 new jobs,” he added.The premier also wrote that Reko Diq would potentially be the largest gold and copper mine in the world. “It will liberate us from crippling debt & usher in a new era of development and prosperity.”
Finance Minister Shaukat Tarin also confirmed that Pakistan had reached an agreement to reconstitute the Reko Diq project.Addressing a press conference along with Energy Minister Hammad Azhar and Balochistan Chief Minister Mir Abdul Quddus Bizenjo in Islamabad, Tarin said some $10 billion would be invested in the province under this project, creating 8,000 new jobs for the locals.The government was actively engaged with Tethyan Copper Company (TCC) — a consortium between the Canadian based mining company Barrick Gold and Chile’s Antofagasta to work specifically on the Reko Diq project — to reach a settlement as the country was threatened with facing a penalty of $6.5 billion because of its top court’s decision to deny a mining lease to the firm.A new agreement was signed by representatives of the federal government and Balochistan with a delegation of Barrick Gold led by Chief Executive Dr Mark Bristow. As per the terms of the new agreement, the Reko Diq project will be revived and developed by Barrick Gold in partnership with Pakistani entities. However, it is learnt that the deal has to be approved by parliament as well as the Supreme Court.
According to settlement, 50% of the new project’s shares will be owned by Barrick Gold, while the remaining shares shall be owned by Pakistan, divided equally between the Centre and the Balochistan government. The federal government’s shares of 25% will be divided equally among three state-owned entities — namely the Oil and Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). Interestingly, no private company was included in the project by the Pakistani side despite efforts.
Balochistan’s shares shall be held by a company wholly-owned and controlled by the provincial government. As part of the prime minister’s vision for Balochistan, the provincial government’s share of capital and operating expenses for the project shall be borne by the Centre.In other words, the Balochistan government will not incur any expenses in development of the mines. Its share of expenses shall be borne by the federal government. In developing the project, nearly $10 billion will be invested in Balochistan, including $1 billion for social uplift projects — roads, schools, hospitals and creation of technical training institute for mining. The investment will create over 8,000 new jobs.The project will make Balochistan the largest recipient of foreign direct investment in the country. To ensure optimal utilisation of the nation’s mineral wealth, the government is also considering setting up a smelter.The agreement has been reached after several rounds of negotiations over the last three years.
In August 2019, the prime minister had set up a committee to steer the negotiations with an aim for early development of the mines. In this effort, the federal and provincial governments were assisted by international advisors including a law firm, White & Case, and an investment bank, Lazard.To ensure the deal is compliant with all the laws, the government will submit the matter before parliament and the Supreme Court. It has been learnt that 10 future governments would continue this project wherein $100 billion would be earned.On July 29, 1993, the BHP Minerals (BHP) and the Balochistan Development Authority (BDA) had signed the Chagai Hills Exploration Joint Venture Agreement (CHEJVA). Subsequently, on Nov 23, 2006, the TCC had bought the BHP’s interests in CHEJVA for $240 million. It had become a party to the CHEJVA pursuant to a novation agreement with the BHP and the Balochistan government. On August 26, 2011, the TCC had submitted its feasibility report and an application for mining lease which was rejected by the licensing authority on November 15, 2011. On November 6, 2011, a petition was filed before the Supreme Court asking the top court to order the Balochistan government to refrain from issuing a mining license in an arbitrary and unlawful manner.On January 6, 2013, the Supreme Court held CHEJVA to be void ab initio. On December 12, 2011, the TCC had instituted proceedings before the International Centre for Settlement of Investment Disputes i (ICSID) for alleged violations by Pakistan of Australia-Pakistan BIT, 1997; and, before International Chamber of Commerce (ICC) for alleged breach by the Balochistan government of contractual obligations under CHEJVA.The ICC tribunal had stayed its proceedings in deference to the ICSID proceedings. On February 12, 2016, the tribunal had issued a draft decision on jurisdiction and liability and held that (i) it had jurisdiction over TCC’s claims; (ii) TCC had made an investment in Pakistan; and, (iii) Pakistan has expropriated TCC’s investment in Pakistan and breached its BIT obligations.On July 12, 2019, the ICSID tribunal had given an award of $5.894 billion plus an interest of $700,000 per day in damages against Pakistan to the TCC.
At the same time, the London Court of Arbitration also imposed another $4 billion fine on Pakistan.Shortly thereafter, the TCC had initiated proceedings for the enforcement of the award in several jurisdictions, including, Australia, the US, and UK (British Virgin Islands). The ICC also resumed proceedings and was expected to give an additional award against the Balochistan government. Contemporaneously, Pakistan challenged the ICSID Award by initiating proceedings before it for the annulment of the award. Subsequently, Antofagasta decided not to participate in the reconstituted project and withdrew from its claim of $3.9 billion in place of $900 million. All of the legal proceedings shall now be withdrawn permanently by both the TCC and Pakistan. The Reko Diq mine is located near Reko Diq town in Chagai District, Baluchistan, Pakistan. It is one of the largest copper and gold mines in the world located in the south west part of Pakistan in Balochistan province. Reko Diq represents one of the largest copper and gold reserves in the world having estimated reserves of 5.9 billion tonnes of ore grading 0.41% copper and gold reserves amounting to 41.5 million oz.The Reko Diq area is part of the Tethyan Magmatic Arc, extending through central and southeast Europe ( Hungary, Romania, Bulgaria, Greece) Turkey, Iran and Pakistan through the Himalayan region into Myanmar, Malaysia, Indonesia and Papua New Guinea. It contains wealth of large copper-gold ore deposits of varying grades.Reko Diq area is one of many eroded remnant volcanic centers in the Chagai volcanic chain of mountains which runs in an east–west line across Balochistan between the Quetta-Taftan Line railway and the border with Afghanistan. TCC has identified a large, low-grade copper-gold resource at Reko Diq.Reko Diq is a small town in Chagai District, Balochistan, Pakistan. It is located in a desert area, 70 kilometres north-west of Naukundi, close to Pakistan’s border with Iran and Afghanistan. The area is located in Tethyan belt that stretches all the way from Turkey and Iran into Pakistan.Reko Diq, which means sandy peak in Baluchi language, is also the name of an ancient volcano.Reko Diq Mine is famous because of its vast Gold and Copper Reserves and its believed to have the world 5th largest gold deposit The country has managed to escape a penalty of $11 billion after reaching an out-of court settlement on the Reko Diq project in the Chagai district of Balochistan after hectic efforts of the Pakistan Army as well as the security establishment of Pakistan.
