Govt looks for local firms to invest in Reko Diq – Newspaper

LAHORE: The Balochistan government is trying to persuade large Pakistani investors to form a consortium to invest their money in the development of the Reko Diq copper-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 to develop this resource that will prove a game change for both Balochistan and the entire country," said the chief. of provincial government Jam Kamal Khan. He said during an interaction with senior journalists at the House of the Governor of Punjab on Monday.

"The development of the project [for commercial production] requires an initial investment of $ 3-4 billion, which adds to the $ 6 billion granted by the International Center for Investment Dispute Settlement (ICSID) in July against Pakistan for terminating the agreement with the Tethyan Copper Company (CBT).

"We want Pakistani businessmen to put their money into this project because it has the potential to help them grow and globalize," he said. However, he acknowledged that it was almost impossible to attract foreign investment for the project at this time in view of the current economic conditions in the country.

Balochistan CM says Pakistani companies are the "first priority" for the copper and gold mining project

On July 13, ICSID, one of the five organizations of the World Bank Group, imposed a fine of $ 4.08 billion and $ 1.87 billion in interest, against Pakistan in a case filed by the TCC. The TCC had claimed $ 11.43 billion in damages following the rejection by the provincial government of a lease request. The TCC said it had invested more than $ 220 million by the time the Pakistani government in 2011 unexpectedly refused to grant them the mining lease necessary to continue operating.

The verdict of the president of the Supreme Court, Iftikhar Muhammad Chaudhry, in the Reko Diq case was the first in a series of events that later led to the massive award against Pakistan. The prime minister regretted that the "emotional decisions" had taken this to Pakistan and Balochistan.

ICSID ruled against Pakistan in 2017, but announced the award of damages to the CBT in July.

"We have moved to the United States for the annulment of the damages," said Jam Kamal Khan. But he seemed to have no hope of any positive result. The president of the TCC board, William Hayes, had declared after the decision that the company was still "willing to reach an agreement with Pakistan, but would continue to protect its commercial and legal interests until the dispute ended."

Reko Diq is famous for its vast reserves of gold and copper and is believed to have the fifth largest gold deposit in the world in Chagai. Deposits in Reko Diq are large porphyry copper of low grade, with total mineral resources of 5.900 million tons of ore with an average copper grade of 0.41 percent and a gold grade of 0.22 g per ton.

The economically exploitable part of the deposit has been estimated at 2,200 million tons, with an average copper grade of 0.53pc and a gold grade of 0.30g per ton, with an estimated annual production of 200,000 tons of copper and 250,000 ounces of gold contained in 600,000 tons of concentrate.

According to the extensive technical and financial studies carried out to ensure optimal economies of scale and lower mining and processing costs, a large-scale, state-of-the-art mining and processing unit is required in Reko Diq.

Posted on Dawn, October 1, 2019