ISLAMABAD - Experts in the mineral sector have asked the government to strike an out of court settlement with the Tethyan Copper Company (TCC) on Reko Diq , and allot about 7 square kilometer area to the company, which will help promote a positive image of Pakistan to the investors and international community.
"We know that TTC has committed several mistakes while implementing the terms of their lease but even then for the sake of the country the government requires to settle the issue amicably," an official sources told The Nation on the condition of anonymity.
BHP Billiton initially signed the exploration licence with the Balochistan government in 1993, but later sold its share to TCC, a joint venture of Barrick Gold of Canada and Antofagasta of Chile. The Supreme Court on January 7, 2013 declared the agreement between the TCC and Balochistan Development Authorities (BDA) null and void and based on dishonesty. Against the decision the Tethyan Copper Company (TCC) went to International Centre for Settlement of Investment Disputes (ICSID) and is seeking monetary compensation from the federal and provincial governments.
According to Pakistan stance, the country had not violated any agreement as it was the TCC who despite retaining ownership of the vast mining land for 20 years, had done nothing for the people of area. The expert said that the government should only allot those areas to the TCC where they have carried out feasibility study and did drilling; the expert said adding that total such area is around 7 square kilometer only. Instead of giving lease to one company the government should allot the area in 10 separate leases, he added.
TCC went to the international arbitration court but it's not too simple that they will get what they have demanded in their case, there will be debate from both sides and some costs the company has added in their suit is unrelated to the government of Balochistan, the source maintained.
Pakistan is on the other hand spending millions of dollars on the pursuance of the case, the expert added. Meanwhile a source in the ministry of petroleum informed that "you wouldn't believe that from the Federal Minister to the Assistant Commissioner of the Chaghi area visited on foreign trips for the pursuance of the case, spending millions of dollars from the national exchequer,". "We have even received a request of foreign trip from non-concerned individuals, two lawyers, people from OGRA etc, the source said adding that it is nothing but just waste of resources.
Reko Diq is located in Chaghi district in northwestern Balochistan and its copper and gold reserves are spread over to more than 99 square kilometers. Reko Diq has mineral resources totaling 5.9 billion tons of ore with an average copper grade of 0.41 per cent and gold grade of 0.22 grams/ton. The economically mineable portion has been calculated at 2.2 billion tons with an average copper grade of 0.53 per cent and gold grade of 0.30 grams/ton.
Reko Diq 's annual production is estimated at 200,000 tons of copper and 250,000 ounces of gold from 600,000 tons of concentrate. The profit worked out by Tethyan Copper Company (TCC) is about $1.14 billion for copper and $2.5 billion for gold, totaling $3.64 billion approximately annually, which is around $ 200 billion in 55 years life of mine. But according the neutral estimates the profit over the 55-year life of the mine will be up to $450-500 billion. In case the Court of Arbitration decided in favor of TCC both federal and provincial governments would bear the financial losses, and to avoid such situation the government need to reach out of court deal with the company, the expert maintained.