| Government comes to an agreement after ‘10 years of legal battles and
negotiations’ | PM announces ‘successful agreement’ on development of
Reko Diq Mine | Claims it to be world’s largest Gold, Copper Mine | Says
‘Project will liberate the country from crippling debt’
By Uzma Zafar
ISLAMABAD: Prime Minister Imran Khan on Sunday announced the successful agreement with a Canadian company for the development of the Reko Diq mine in Balochistan, saying it will create 8,000 new jobs for the people.
The prime minister congratulated the nation and people of Balochistan on the agreement between the government of Pakistan and Barrick Gold Corporation — a mining company.
“I congratulate the nation and people of Balochistan on successful agreement with Barrick Gold for development of Reko Diq mine,” wrote the premier.
According to the PM, the government came to an agreement after “10 years of legal battles and negotiations.”
He further said: “Penalty of approximately $11 billion is offset, $10 billion will be invested in Balochistan creating 8,000 new jobs.”
Claiming Reko Diq as the largest gold and copper mine in the world, the premier said that the project will liberate the country from crippling debt, adding that it will “usher [the country] in a new era of development and prosperity.”
Reko Diq could be in production within five to six years: Barrick Gold
In a separate statement, Barrick Gold Corporation confirmed that they have reached an agreement with the federal and Balochistan governments on a “framework that provides for the reconstitution of the Reko Diq project”.
According to the mining company, Barrick “will be the operator of the project which will be granted a mining lease, exploration licence, surface rights and a mineral agreement stabilising the fiscal regime applicable to the project for a specified period”.
“The process to finalize and approve definitive agreements, including the stabilisation of the fiscal regime pursuant to the mineral agreement, will be fully transparent and involve the federal and provincial governments, as well as the Supreme Court of Pakistan. If the definitive agreements are executed and the conditions to closing are satisfied, the project will be reconstituted including the resolution of the damages originally awarded by the International Centre for the Settlement of Investment Disputes and disputed in the International Chamber of Commerce,” said the statement.
Barrick’s President and Chief Executive Officer Mark Bristow hailed the agreement as an important step towards the development and operation of Reko Diq.
The mining company said Barrick will start a full update of the project’s 2010 feasibility and 2011 expansion pre feasibility studies, which envisaged a conventional truck-and-shovel open pit operation with comminution and flotation processing facilities producing a high-quality copper-gold concentrate.
Bristow said that if all goes according to plan then Reko Diq could be in production within five to six years.
Shaukat Tarin shares details of agreement
Minister for Finance and Revenue Shaukat Tarin on Sunday confirmed that Pakistan had reached an agreement to reconstitute the Reko Diq project, enabling the country to avoid the $11 billion penalty as well as to avail the largest gold and copper reserve in the world.
Earlier today, it was reported that an out-of-court settlement of the project in the Chagai district of the province had been finalised. Pakistan is actively engaged with Australia’s Tethyan Copper Company (TCC) to reach the settlement as the country was threatened with facing a penalty of $6 billion due to its decision to deny a mining lease with the latter.
In the latest development, the governments of Pakistan and Balochistan, Antofagasta plc, and Barrick Gold Corporation agreed in principle to a framework to reconstitute the project as well as to a pathway for Antofagasta to exit the project.
Addressing a hurriedly called press conference along with Energy Minister Hammad Azhar and Chief Minister Balochistan Mir Abdul Quddus Bizenjo in Islamabad, Tarin said some $10 billion would be invested under this project which would create 8,000 new jobs for the locals.
He added that as per the new agreement, Barric Gold would retain 50 per cent share, while government of Balochistan would get 25 per cent share, and the rest 25 per cent share would be attributed to the state-owned enterprises – Oil and Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan (GHPL).
He apprised media persons that an agreement was signed in 2006 among a Canadian Company Barrick Gold, a Chilean company Antofagasta plc, and the governments of Pakistan and Balochistan to extract gold and copper from the Reko Diq reserve.
As per the old agreement, 37.5 per cent share each was given to the two foreign companies whereas 25 per cent share was given to the provincial government.
The agreement was suspended in 2011 due to a dispute over the legality of its licensing process. As a result, the International Court of Arbitration leveled $6.4 billion award on government of Pakistan while on the same time the London Court of Arbitration also imposed another $4 billion fine on Pakistan.
The minister further said that soon after taking the charge, Prime Minister Imran Khan actively pursued the case and directed to draw a suitable solution as early as possible.
Subsequently, Antofagasta decided not to participate in the reconstituted project and withdrew from its claim of $3.9 billion in place of $900 million.
Tarin informed the newsmen that $900 million would be paid by the three state-owned enterprise (SOEs) and in return they would get 25 per cent share of the project.
Had the PM not taken his personal interest in the case, Pakistan would have to pay the huge amount of $11 billion as a penalty, he maintained.
Tarin also said Pakistan and Balochistan would benefit from the project for more than 100 years and the total worth is estimated to be over $100 billion.
Terming the new agreement a landmark achievement, Hammad Azhar said it was a historic day. He added that according to the Barrick Gold, Reko Diq was the only one part with such huge gold and copper reserves. There were also other reserves in the area, so a lucrative mining cluster is going to be developed in Pakistan.
