LAHORE: The Balochistan government is trying to persuade large Pakistani investors to form a consortium to invest their money in the development of Reko Diq copper and gold mining project.
“Our first priority is to convince Pakistani companies to invest in this project because neither the provincial nor the federal government has the finances for developing this resource that will prove a game changer for both Balochistan and the entire country,” provincial chief minister Jam Kamal Khan said during an interaction with senior journalists at the Punjab Governor’s House on Monday.
“The development of the project [for commercial production] requires an initial investment of $3-4 billion, which is in addition to the $6bn awarded by the International Centre for Settlement of Investment Disputes (ICSID) in July against Pakistan for terminating agreement with the Tethyan Copper Company (TCC).
“We want Pakistani businessmen to put their money in this project because it has the potential to help them grow big and go global,” he asserted. However, he acknowledged that it was near impossible to attract foreign investment for the project at the moment in view of current economic conditions in the country.
The ICSID, one of the five organisations of the World Bank Group, on July 13 slapped a $4.08bn penalty and $1.87bn in interest – against Pakistan in a case filed by the TCC. The TCC had claimed $11.43bn in damages following the rejection by the provincial government of a leasing request from it. The TCC said it had invested more than $220 million by the time the Pakistan government in 2011 unexpectedly refused to grant them the mining lease needed to keep operating.
Chief Justice Iftikhar Muhammad Chaudhry’s verdict in the Reko Diq case was the first in a series of events that later led to the massive award against Pakistan. The chief minister lamented that “emotional decisions” had brought this on Pakistan and Balochistan.
The ICSID had ruled against Pakistan in 2017, but announced the award of damage to the TCC in July.
“We have moved in the US for the annulment of the damages,” Jam Kamal Khan said. But he did not appear hopeful of any positive outcome. TCC board chair William Hayes had stated following the decision that the company was still “willing to strike a deal with Pakistan, but it would continue protecting its commercial and legal interests until the dispute was over”.
Reko Diq is famous for its vast gold and copper reserves and is believed to have the world’s fifth largest gold deposits in Chagai. The deposits at Reko Diq are large low grade copper porphyry, with total mineral resources of 5.9bn tonnes of ore with an average copper grade of 0.41 per cent and gold grade of 0.22g per tonne.
The economically mineable portion of the deposit has been calculated at 2.2bn tonnes, with an average copper grade of 0.53pc and gold grade of 0.30g per tonne, with an annual production estimated at 200,000 tonnes of copper and 250,000 ounces of gold contained in 600,000 tonnes of concentrate.
According to the extensive technical and financial studies undertaken to secure optimal economies of scale, and lower mining and processing costs, a large scale, state-of-the-art mining and processing unit is required at Reko Diq.