World Bank court orders Pakistan pay $5.8 billion damages to Tethyan Copper
The company said it had invested more than $220 million by the time Pakistan's government.
ISLAMABAD (Dunya News) – The International Centre for Settle¬ment of Investment Disp¬utes (ICSID), one of the five organisations of the World Bank Group, has ordered the Pakistani government pay damages of $5.8 billion, including $1.7 billion in interest, to Tethyan Copper – a joint venture between Chile’s Antofagasta Plc and Canada’s Barrick Gold – in the Reko Diq case.
The international tribunal, which provides facilities for conciliation and arbitration of international investment disputes, rendered its judgement on Friday — a 700-page ruling against Pak¬istan in the case.
Tethyan Copper discovered vast mineral wealth more than a decade ago in Reko Diq, at the foot of an extinct volcano near Pakistan’s frontier with Iran and Afghanistan. The deposit was set to rank among the world’s biggest untapped copper and gold mines.
The company said it had invested more than $220 million by the time Pakistan’s government, in 2011, unexpectedly refused to grant them the mining lease needed to keep operating.
The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Pakistan in 2017, but until now had yet to determine the damages owed to Tethyan.
Tethyan board chair William Hayes said in a statement the company was still “willing to strike a deal with Pakistan,” but added that “it would continue protecting its commercial and legal interests until the dispute was over.”
The Reko Diq mine has become a test case for Prime Minister Imran Khan’s ability to attract serious foreign investment to Pakistan as it struggles to stave off an economic crisis that has forced it to seek an International Monetary Fund bailout.
Pakistan considers Reko Diq as a strategic national asset and had taken a key role in its development amid the dispute with Antofagasta and Barrick.
Meanwhile, Pakistan has decided to challenge the award “very soon” by filing a review application.
Earlier, Tethyan Copper Company’s (TCC) management, the complainant whose contract was terminated, had claimed $11.41 billion in damages. In 2012, TCC filed claims for international arbitration before the ICSID of the World Bank after the Balochistan government turned down a leasing request from the company. The litigation has continued for seven years.
Reko Diq mine is famous because of its vast gold and copper reserves and is believed to have the world’s fifth largest gold deposit. Reko Diq, which means sandy peak in the Balochi language, is a small town in Chagai district in Balochistan.
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 represents one of the largest copper reserve in Pakistan and in the world having estimated reserves of 5.9 billion tonnes of ore grading 0.41% copper. The mine also has gold reserves amounting to 41.5 million oz.
The deposit at Reko Diq is a large low grade copper porphyry, with total mineral resources of 5.9 billion tons of ore with an average copper grade of 0.41% and gold grade of 0.22 g/ton. From this, the economically mineable portion of the deposit has been calculated at 2.2 billion tons, with an average copper grade of 0.53% and gold grade of 0.30 g/ton, with an annual production estimated at 200,000 tons of copper and 250,000 ounces of gold contained in 600,000 tons of concentrate.
With input from Reuters
