An arbitration tribunal of the World Bank’s International Center for Settlement of Investment Disputes (ICSID) had on Monday ruled against Pakistan in relation to the unlawful denial of a mining lease for the Reko Diq project in 2011, Chilean mining company Antofagasta plc announced on Tuesday.
The International Center for Settlement of Investment Disputes’ (ICSID) verdict came after Tethyan Copper Company Limited (TCC), a joint venture between Antofagasta and Barrick, filed an arbitration claim against Pakistan for unlawfully denying a mining lease for the Reko Diq project.
The claim could not be verified with Pakistan’s legal representatives in the case.
The damages phase of the proceedings will begin on March 22, during which the tribunal will consider submissions from the parties to determine the amount that Pakistan must pay TCC. A ruling on the quantum of damages is expected in 2018.
At the conclusion of this phase, Tethyan will receive an award entitling it to the fair market value of the project at the time that mining lease application was denied.
In January, 2013, the Supreme Court had declared invalid the Reko Diq agreement – a lease for one of the world’s richest deposits of gold and copper in Balochistan held by the TCC – observing that the agreement ran counter to the country’s mineral development act and mining concession rules.
A three-judge bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, declared “not valid” the Chagai Hills Exploration Joint Venture Agreement (CHEJVA), the initial 1993 exploration agreement between the Balochistan government and Australian mining group BHP.
Tethyan Copper Company
Reko Diq is one of the world’s richest deposits of gold and copper held by a Canadian-Chilean consortium that includes Vancouver-based giant Barrick Gold.
Barrick, the world’s largest gold producer, and Chile’s Antofagasta Minerals, each own a 37.5% share, as the Tethyan Copper Company, in the largest Foreign Direct Investment mining project in Pakistan.
Their plan was to build and operate a copper and gold open-pit mine at Reko Diq in the Chagai district of Balochistan.