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    Reko Diq

    ISLAMABAD: British High Commissioner to Pakistan Adam Thomson has said that the verdict in international arbitration on the Reko Diq saga may have chilling affects on foreign investors.

    “Supreme Court of Pakistan's verdict in certain cases whether it relates to Reko Diq or others is a sign of discouragement for foreign investors,” Adam Thomson said while talking to selected journalists on Wednesday night.

    Tethyan Copper Company (TCC) filed for international arbitration to protect its legal rights after Balochistan rejected its mining lease application. Tethyan Copper – a joint venture between Chilean copper producer Antofagasta and Canada's Barrick Gold – owns the massive Reko Diq project in Balochistan with reserves estimated at 2.2 billion tons of gold and copper.

    “There is a risk of misconception from some of its decisions and Reqo Diq is the latest one,” He said that Pakistan should think carefully about it.

    Responding to questions about litigation between government of Pakistan and international companies, the British High Commissioner said that a strong judicial system will not only uphold Pakistan's interest but was extremely important to foreign companies.

    He said that Pakistan and the United Kingdom signed a Bilateral Investment Treaty (BIT) in 1994 providing protection to companies in both countries. Pakistan is attracting British companies after promulgation of this agreement, he added.

    He said that the 10% increase in trade compared to the previous year was not bad keeping in mind the global recession.

    “UK-based exploration company Premier Oil has been working in the oil and gas sector of Pakistan for the last 10 years,” he said adding that there are more such companies.

    He said that British companies are doing very well in Pakistan which reflected from their profits. “These companies also face challenges with regulatory bodies being the biggest challenge,” he said. Although, he said, Pakistan in South Asia is comparatively a good place to do business, corruption is also a problem as few companies find it difficult to work in certain sectors.

    UK has very stringent Anti-Bribery Act which governs UK companies in Pakistan so that they would stay clean. “Some changes in reorganisation in government, ministries, regulatory bodies after the 18th Constitutional Amendment are also challenging to those British companies considering to invest in Pakistan,” he said adding that perception of insecurity is very high among them. “When I'm in UK, I try hard to overcome such impressions,” he added.

    “India is second largest investor foreign manufacture holder in UK,” he said adding that all Pakistani companies should also see UK as a gateway to European Union. “We are the second largest investor in Pakistan and aim to become the largest,” he concluded.

    http://paktribune.com/business/news/...mson-9994.html

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    Senior Member Neo's Avatar
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    Reko Diq

    Reko Diq


    THE untapped gold and copper deposits at Reko Diq are in the news again, with more of the same — further delays. The dispute at the moment is over which lawyers will hear the case in international arbitration. But this is only the latest obstacle in a stand-off between a foreign mining company and the Balochistan government that flared up a year and a half ago over the reportedly massive deposits in the province. And it has been nearly two decades since an exploration agreement was first signed that could by now have helped transform Balochistan’s fortunes. Now stuck in both the Supreme Court and in international arbitration, the disagreement shows no signs of being resolved while the province relies on handouts from the federal government and languishes for lack of development.

    Each side offers a series of arguments against the other. Tethyan Copper claims the 1993 agreement includes a generous pay-off for the provincial government and that there was no valid reason to deny them a mining license after they invested more than $200m in exploration. Balochistan claims the agreement offers no real financial benefit for the province and did not guarantee a mining license, and that the company has failed to begin mining for years. Lost in all of this is the bigger picture. For one, although various speculative figures are thrown around by people on both sides of the debate who undervalue or overvalue the deposits depending on their motivations, Reko Diq is a substantial deposit by global standards. The Balochistan government needs to get realistic about whether it has the means or the expertise to tap into this badly needed source of revenue. Second, the matter goes beyond Reko Diq. Foreign direct investment has been falling for the last four years, including by 50 per cent in 2011-12. If this case becomes yet another example of Pakistani economic policies and contracts changing depending on the government in power, that will only further damage the country’s reputation as an investment destination. It is worth trying to put nationalist rhetoric aside and reshape the agreement rather than necessarily throwing it out altogether.

    http://dawn.com/2012/07/30/reko-diq/
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

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    Senior Member Neo's Avatar
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    Reko Diq case: Centre refuses to pay Rs450m fee for legal experts


    Published: August 3, 2012

    ISLAMABAD: The federal government has distanced itself from the multi-billion-dollar Reko Diq gold and copper mining saga by refusing to pay Balochistan the Rs450 million it needs to pay legal experts to fight the international arbitration case filed by Tethyan Copper Company.

    Pakistan is currently in litigation with TCC at the International Centre for Settlement of Disputes in Washington and is hoping for an out-of-court settlement, said a top federal government official.

    The panel of legal experts representing Pakistan include Cherie Blair, wife of former British Prime Minister Tony Blair, Barrister Mehnaz Malik, Advocate General Amanullah Kanrani and Ahmer Bilal Soofi.

    TCC filed for international arbitration in November 2011 after Balochistan blocked the company from mining copper and gold by rejecting its application. TCC had submitted the feasibility report to the provincial government in August 2010 and applied for a mining licence in February 2011.

    Tethyan Copper Company had hired SNC-Lavalin, one of the top three feasibility study companies in the world, to prepare a feasibility study which cost around $220 million and took around three to four years to be completed.

    The petroleum ministry had sought legal opinion from the law ministry which was of the opinion that the provincial government of Balochistan should pay the fees for legal experts, official said.

    The central government has also refused to pay damages if TCC wins the case in international court, official said adding that it has asked Balochistan to consider renegotiating the deal to reach an amicable settlement with the company.

    According to sources, the law ministry has also suggested that the Balochistan government should pay damages if the international court rules in favour of TCC.

    Several foreign companies have refused to make investment in Pakistan after TCC went to international court.

    TCC, which is represented by Antofagasta of Chile and Barrick Gold of Canada, holds 75% share in the project while Balochistan has a 25% stake.

    TCC claims it has invested over $500 million in exploration, scoping and feasibility studies on the project. Total investment is projected to be $5 billion over a period of five years.

    This is not the first altercation between the mineral-rich province and TCC. In the first one, Balochistan refused TCC’s proposal to become a partner by financing 25% of the project. Secondly, TCC was concerned about purported involvement of a Chinese company in the same project.

    In a letter written to then petroleum minister Naveed Qamar in September 2009, Pakistan’s Ambassador to Chile Burhanul Islam wrote that it was not a good idea to entertain Chinese company MCC in the same mining site, which had been offered to TCC with all commitment, responsibility, investment and legal claims. He suggested that the Chinese, if aspiring for a project, could be offered a separate mining site.

    In a feasibility report submitted to the Balochistan government, TCC projected a turnover of over $60 billion for the gold and copper project over a span of 56 years. This projection was based on the price of $2.2 per pound of copper and $925 per ounce of gold in 2009. The mine has estimated reserves of 11.65 million tons of copper and 21.18 million ounces of gold.

    Reko Diq case: Centre refuses to pay Rs450m fee for legal experts – The Express Tribune
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

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    Senior Member Neo's Avatar
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    Pakistan should think about Reko Diq carefully: Thomson

    By Zafar Bhutta
    Published: June 29, 2012

    ISLAMABAD: British High Commissioner to Pakistan Adam Thomson has said that the verdict in international arbitration on the Reko Diq saga may have chilling affects on foreign investors.

    “Supreme Court of Pakistan’s verdict in certain cases whether it relates to Reko Diq or others is a sign of discouragement for foreign investors,” Adam Thomson said while talking to selected journalists on Wednesday night.

    Tethyan Copper Company (TCC) filed for international arbitration to protect its legal rights after Balochistan rejected its mining lease application. Tethyan Copper – a joint venture between Chilean copper producer Antofagasta and Canada’s Barrick Gold – owns the massive Reko Diq project in Balochistan with reserves estimated at 2.2 billion tons of gold and copper.

    “There is a risk of misconception from some of its decisions and Reqo Diq is the latest one,” He said that Pakistan should think carefully about it.

    Responding to questions about litigation between government of Pakistan and international companies, the British High Commissioner said that a strong judicial system will not only uphold Pakistan’s interest but was extremely important to foreign companies.

    He said that Pakistan and the United Kingdom signed a Bilateral Investment Treaty (BIT) in 1994 providing protection to companies in both countries. Pakistan is attracting British companies after promulgation of this agreement, he added.

    He said that the 10% increase in trade compared to the previous year was not bad keeping in mind the global recession.

    “UK-based exploration company Premier Oil has been working in the oil and gas sector of Pakistan for the last 10 years,” he said adding that there are more such companies.

    He said that British companies are doing very well in Pakistan which reflected from their profits. “These companies also face challenges with regulatory bodies being the biggest challenge,” he said. Although, he said, Pakistan in South Asia is comparatively a good place to do business, corruption is also a problem as few companies find it difficult to work in certain sectors.

    UK has very stringent Anti-Bribery Act which governs UK companies in Pakistan so that they would stay clean. “Some changes in reorganisation in government, ministries, regulatory bodies after the 18th Constitutional Amendment are also challenging to those British companies considering to invest in Pakistan,” he said adding that perception of insecurity is very high among them. “When I’m in UK, I try hard to overcome such impressions,” he added.

    “India is second largest investor foreign manufacture holder in UK,” he said adding that all Pakistani companies should also see UK as a gateway to European Union. “We are the second largest investor in Pakistan and aim to become the largest,” he concluded.

    Pakistan should think about Reko Diq carefully: Thomson – The Express Tribune
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

  5. #5
    Member Pickwickian's Avatar
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    Whatever must be done to stop any foreigner touching Reko Diq should be done. We should tell them to get lost. The mine was sold secretly under Zardari for a couple $billions dollars when its worth is well over $200bln.

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    Senior Member Neo's Avatar
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    According to some estimates the reserves exceed $500 billion!!!
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

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    Member Pickwickian's Avatar
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    Quote Originally Posted by Neo View Post
    According to some estimates the reserves exceed $500 billion!!!
    I think that might be Pakistani exaggeration but either way, we shouldn't give it away cheaply.

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    Senior Member Neo's Avatar
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    China will most probably be the biggest importer of Pakistani minerals; instead of selling the mines to Chili, a JV with China will be more feasible.
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

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    Senior Member Neo's Avatar
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    Reko Diq: Perspective


    June 28, 2012
    AKHTAR ALI

    Business Recorder carried a news item the other day, wherein it has been reported that the federal government has informed Balochistan government that it alone would be responsible for its handling of the Reko Diq project and that the GoP would not be footing the bill of international litigation that is to ensue failing an amicable resolution of the Reko Diq stalled project dispute.

    In these very pages, I wrote about the Reko Diq issue and advised the government of Balochistan to adopt more realistic and business like policies towards the approval of the Reko Diq project. In the meantime the dispute is moving from the Supreme Court to international judicial fora, which we find quite unfortunate. Before we offer some more and current advice to the parties involved, let me provide some perspective and relevant details of the project for the benefit of the readers.

    Reko Diq copper mining project is located in Chaghi, at the juncture of three borders ie of Afghanistan, Pakistan and Iran. A foreign company, Tethyan or its predecessor, a joint venture of Chilean company Antafagosta and Canadian company Berrickgold, had been given an exploration lease as a consequence of which, Tethyan has invested $200 million in preparing a project feasibility study and has submitted its proposal to Government of Balochistan to grant project approval and a mining production lease.

    The project envisages mining and primary processing of Copper ore resulting in an output of 200,000 tons of primary copper and 12 metric tons of gold per annum. By comparison, Saindak produces 16,000 tons of copper. Annual revenue of the project has been estimated at 2.345 billion USD. A foreign investment of 3.2 billion USD is projected financed through foreign equity and debt.

    Government of Balochistan has been offered an equity stake of 25% in the project. As per National and provincial Mineral Policy(NMP-95) that still holds current, a royalty of 2% on sales has been offered .Government of Balochistan is expected to earn a royalty of 47 million USD annually and profits on (25%) equity of 40 million USD to a total of 87 million USD annually. GoP will earn 70 million USD as corporate income tax.

    A total corporate profit of 234 million USD has been estimated, out of which net profit of 124 million USD per year may go to the foreign company Tethyan. Perhaps the largest impact would be on foreign exchange earnings whereby a net inward flow of 1000 million USD could be expected which probably is more than the total rice exports of Pakistan. These estimates are based on a GP rate of 10% of sales and a copper price of 7000 USD per tonne. Under more rosy projections, the aforementioned earnings of the parties can be doubled.

    What is the dispute? Formally, a flimsy argument has been made by the GoB in the court that full survey report has not been submitted by Tethyan and thus lease application has been denied. There are several aspects of the project, some real and some not so real. The foremost is unrealistic perception prevailing in some circles in Pakistan about the true value of the Copper deposit in question. The presence of some gold in it has made it even more romantic. In primitive societies, gold has a special appeal.

    A strange mix of arch-communist lawyers, fundamentalist politicians, romantic secessionist younger crowd and a few ambitious and self serving bureaucrats (having read rather old and outdated literature on the exploitation of mining companies) have together created a mythical environment that is impeding a realistic and amicable settlement.

    It is generally alleged that a copper deposit of a worth of 40-70 billion USD or more is being taken for a chime of royalty, little realising that 75 percent of the so-called 40 billion USD would be spent to bring the copper out of a depth of more than 1000 metres and processed.

    It is an extremely expensive operation. And as per estimates provided in the aforementioned, GoB is going to get 4-5 billion USD and GoP another 3.5 billion USD in the form of corporate income taxes over the life time of the project and not to talk of a foreign exchange earnings of 70 billion USD. I wish lawyers, especially the older ones, were taught some arithmetic and finance.

    Another argument that has nothing to do with the interest of Balochistan and its people directly is the issue of secondary processing. Public sector investment is being proposed, while Government of Balochistan has reportedly allocated some billions of Rupees in the budget. A bad dream at best, trying to create white elephants that may bankrupt the Balochistan government which has to be eventually bailed out, under the threat and slogans of secession.

    Copper and metals are a highly complicated business. Government of Pakistan had been trying to launch Saindak Copper project since ZAB days in 1970s. It barely managed to launch it after decades of effort and Chinese assistance. It lost money and GoP had to almost beg the Chinese to take it over and recoup their loan and investment through sales and exports of Copper to China. An investment of 500 million USD in the 1980s and the 1990s was made in Saindak for a production of 16,000 tons per year of copper output as against a Reko Diq projected output of 200,000 tons per year.

    Tethyan estimates an estimated investment requirement of 3.2 billion USD, while the opponents of the projects have filed a report in the Supreme Court claiming that they can do this job in 200 million USD or so; a highly irresponsible and misleading report containing copied material from Wikipedia. The report was not prepared by Government of Balochistan but was prepared by a federal government agency under the championship of a retired and re-employed bureaucrat who has now found other departments (such as Thar coal) to meddle in.

    No one, even Tethyan, can preclude secondary and tertiary processing in the country, provided there are takers and investors for the project. Ultimately, it would come once the main project comes on stream. You cannot coerce some body into investment, which is already very high in the proposed project configuration. As reported in the press, the company has even offered to finance a feasibility study in this respect.

    Government of Balochistan should have hired foreign consultants to examine and assist in negotiations to extract the best deal instead of relying on naïve enthusiasts and local amateurs and being swayed by street sentiment. There is nothing secret or special about the Reko Diq deposit.

    There are many countries where even better ore is available and there are bigger deposits as well. If a company has spent time and money on a project, it would like to recoup its investment and benefit from it for mutual good. Too much should not be read in their insistence. The lease terms may be limited to the extent of the revealed data in terms of geographical coverage and mineral specifications.

    Other safeguards can be built like installing laboratory facilities at the export point to check and record the specifications of the exported item. Companies do not acquire unlimited rights any way and any production lease would be for specified minerals and agreements can build in such safeguards. Also clauses can be provided for local processing of a percentage of mine output, if and when such facilities were made available in the country.

    Clearly, it is in Pakistan's interest, and more so in Balochistan's interest, that the Reko Diq project is implemented and the current company offer is accepted with some negotiated enrichment for the government of Balochistan. Secondary processing is not the issue for Balochistan; income and employment and local development is. Some senior journalists who have visited the project have reported a broad-based support of the project among the locals. They obviously see the benefit. An area so remote that it was found fit for a nuclear explosion, would not get a better opportunity for development.

    As to the legal aspect, there are ambiguities and difficulties. Mineral policy of the province does not lay down rules for automatic conversion of exploration lease into a production lease. Most mining regimes, except some of the more business-like ones, suffer from this. Supreme Court has accordingly not announced a clear verdict yet and has asked the parties to negotiate.

    There are arguments on both sides as to the automatic conversion of leases. Neither the government can assume unlimited powers to refuse such conversion nor can the investor have a cart-blanche for getting its proposal approved simply because it has invested money in exploration. In our opinion, however, prima facie a good and reasonable proposal has been submitted and ought to be accepted in a difficult time and environment in the province and the country, when the DFI offerings are so rare and limited.

    Coming back to the recent intimation of GOP to GOB regarding the financial responsibility of the latter in footing the bill of international litigation, it is welcome as it probably attempts to dissuade the GoB from pursuing a litigationist approach and encouraging an amicable settlement bilaterally with the company. In the wake of the 18th Amendment and even earlier, mineral resources were in the provincial domain.

    Pakistan has been ranked as one of the most corrupt countries in the world, the ranking going up and down slightly over a long-term trend. Balochistan is probably worst in this respect within Pakistan. Mining companies are used to making underhand payments for consummating deals as most mining jurisdictions in the world are plagued with similar problems.

    One would be highly skeptic of the claims of protecting the provincial and so-called national interest. Unless the asking price is too unreasonable, the deal probably would have been made. GoP should take active interest in guiding and persuading the government of Balochistan towards making right decisions towards the approval of the project, for not only its own agencies were involved in spreading unrealistic proposals and projections, the people of Balochistan and the residents of Chaghi will lose a precious opportunity of employment, income and development.

    Litigation would spoil the prospects of the project, even if GoB wins the case in international judicial forum, which is almost impossibility. Sentiments of business community even in Pakistan and Balochistan are for going ahead with the Tethyan proposed project. The project, province and the country would earn a bad name and it would generally send a wrong signal to international investors, which should be the final reason for GOP to use its muscle and act decisively for an amicable settlement of the issue outside the court, national or international. Foreign consultants of repute should be invited to evaluate the proposal and offer expert advice on possible enrichment of benefits and building in necessary safeguards to protect the interests and rights of the people and government of Balochistan.

    Reko Diq: Perspective | Business Recorder
    Great spirits have always found violent opposition from mediocre minds. - Albert Einstein

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    Administrator Aryan_B's Avatar
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    TCC loses Reko Diq case in international court

    TCC loses Reko Diq case in international court


    Jawwad Rizvi
    Saturday, December 15, 2012


    LAHORE: The International Centre for Settlement of Investment Disputes (ICSID) Tribunal has given the decision in favour of the Balochistan government and Dr. Samar Mubarakmand, allowing them to carry out mining and smelting project in the Reko Diq area of Balochistan.

    The tribunal has released its decision on provisional measures applied by the Tethyan Copper Company Pty Limited (TCC) in which they had sought to restrain the Balochistan government and Dr. Samar Mubarakmand to carry out mining and smelting project in Reko Diq.

    The decision, a copy of which available with The News, was released by the tribunal on December 13. The Tribunal, comprising eminent scholars and Judges namely Dr. Klaus Sachs, Lord Hoffman and unanimous decision almost after five weeks.

    The 45 pages unanimous decision has declined to accept TCC’s pleas regarding urgency and irreparable loss. The Tribunal has effectively given a go a head to the government but has required them to keep the Tribunal informed of all the developments on regular basis about the activities that would be carried out in the Reko Diq area by Dr. Samar and his team.

    The Tribunal decided that ‘Respondent shall immediately inform the Tribunal and Claimant of any change of its present intention, to implement the H4 Work Plan, not to expand its mining activities to H14 and/or H15 or to any other deposit within License EL-5 and not to give any rights in this regard to any third party’. “Respondent shall further inform the Tribunal and Claimant, on a regular basis, about its specific plans and activities with respect to deposit H4”.

    “The Tribunal remains seized of the matter and shall consider future applications by Claimant if the situation materially changes, in particular in case Respondent, materially deviates from the H4 Work Plan, expands its mining activities to deposits H14 and/or H15 or to any other deposit within License EL-5 or gives any rights in this regard to any third party”. Otherwise, the Request is dismissed.

    “The Tribunal will decide on the costs related to the Request at a later stage of the arbitral proceedings”, the decision of the Tribunal was stated.

    Earlier, the Claimant in their application had sought freeze on work of the Government of Balochistan in 99 square kilometres of area including H/4. The government in its Reply had stated that they were working on H/4 area which is 12 kilometers away from H/14 and H/15 for which the TCC had filed feasibility.

    Dr. Samar also had appeared before the Tribunal in London to explain the technical details of the Project and stated that earliest development of H/4 deposits was in the national interest of the people of Balochistan and Pakistan.

    In this regard, legal arguments on behalf of the Respondent Pakistan were addressed by Mr. Ahmer Bilal Soofi, Mr. Arthur Marriott QC; Ms. Mahnaz Malik and Mr. John Kingston and Ms. Cherie Blair QC of Matrix Chambers. The Advocate General of the Balochistan was also present at the proceedings.

    Earlier the application of TCC was rejected by the Mining authority of Balochistan on the grounds that they had filed feasibility of only 6 kilometres area comprising of two deposits whereas they wanted to acquire 99 kilometres that contained 14 deposits.

    TCC loses Reko Diq case in international court - thenews.com.pk

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    Member qaisarjaan's Avatar
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    TCC Loses Reko Diq Case in International Court

    LAHORE: The International Centre for Settlement of Investment Disputes (ICSID) Tribunal has given the decision in favour of the Balochistan government and Dr. Samar Mubarakmand, allowing them to carry out mining and smelting project in the Reko Diq area of Balochistan.

    The tribunal has released its decision on provisional measures applied by the Tethyan Copper Company Pty Limited (TCC) in which they had sought to restrain the Balochistan government and Dr. Samar Mubarakmand to carry out mining and smelting project in Reko Diq.

    The decision, a copy of which available with The News, was released by the tribunal on December 13. The Tribunal, comprising eminent scholars and Judges namely Dr. Klaus Sachs, Lord Hoffman and unanimous decision almost after five weeks.

    لاہور: بین الاقوامی سرمایہ کاری کے تنازعات کے حل (ICSID) کے لئے مرکز ٹریبونل بلوچستان حکومت اور ڈاکٹر ثمر مبارک کے حق میں فیصلہ دے دیا ہے، انہیں بلوچستان کے Reko Diq علاقے میں کان کنی اور smelting منصوبے کو لے جانے کی اجازت دی ہے.

    ٹربیونل نے عارضی Tethyan کاپر کمپنی Pty لمیٹڈ (ٹیسیسی) کی طرف سے لاگو اقدامات جس میں انہوں نے بلوچستان حکومت اور ڈاکٹر ثمر مبارک نے کان کنی اور Reko Diq میں smelting منصوبہ لے روکنا کی کوشش کی تھی پر اس کے فیصلہ جاری کیا ہے.

    فیصلہ، نقل دی نیوز کے پاس دستیاب ہے جن میں سے ایک، 13 دسمبر کو ٹربیونل کی طرف سے جاری کیا گیا تھا. ٹریبونل، ممتاز علماء کرام اور ججوں یعنی ڈاکٹر کلاؤس سیکس، رب ہافمین اور تقریبا پانچ ہفتے کے بعد متفقہ فیصلہ پر مشتمل ہے.

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    Reko Diq case: SC concludes hearing, ruling to be announced on Jan 7

    ISLAMABAD: The Supreme Court on Friday concluded the hearing of the Reko Diq case, DawnNews reported. The ruling in the case is to be issued on Jan 7, 2013.

    A three-judge bench of the Supreme Court, headed by Chief Justice Iftikhar Muhammad Chaudhry, had been hearing the case constituting of identical petitions filed against the federal government’s decision to lease out gold and copper mines in Reko Diq in Balochistan’s Chagai district to the Tethyan Copper Company (TCC) – a Canadian and Chilean consortium of Barrick Gold and Antofagasta Minerals. Reko Diq sits over the popular Tethyan copper belt and is known to have the fifth largest deposits of gold and copper in the world.

    During the hearing, Chief Justice Iftikhar said the ruling in the case would be in accordance with the country’s law and Constitution.

    The bench reserved the ruling after Khalid Anwar, counsel for the TCC, concluded his arguments.

    Earlier during the hearing, Anwar stated that he had concluded his arguments. The counsel for BHP company, Abdul Hafeez Pirzada and counsel for Balochistan government, Ahmer Bilal Sufi, had already concluded their arguments.

  13. #13
    Senior Member Neo's Avatar
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    Reko Diq fiasco

    Reko Diq fiasco


    The Supreme Court (SC) in its reserved judgement in the Reko Diq case has through a short order held the original agreement to explore and later mine the copper and gold reserves in the area null and void, and as a consequence, all later agreements stemming from the original one. The Balochistan government had signed a Chaghai Hills Exploration Joint Venture Agreement (CHEJVA) with Australian mining group Broken Hill Propriety (BHP) in 1993 when a caretaker government under Moeen Qureshi at the Centre and Mohammad Nasir Mengal in Balochistan was in office. The appropriateness of a caretaker government signing such a far reaching deal regarding a precious natural resource is certainly questionable, but this seems to have been a repeated pattern ever since. In 2002, when governor’s rule existed in Balochistan before the elections under Musharraf that year, the Governor, Justice (retd) Amir-ul-Mulk Mengal signed an addendum to CHEJVA to overcome certain legal lacunae that stood in the way of BHP’s successor company Tethyan Copper Co (TCC) acquiring assignment of the interest of the parties to CHEJVA. The original 1993 CHEJVA, an addendum to the exploration agreement of March 2000, an option agreement of April 2000 and a novation agreement of April 2006 have all been found “illegal, void and non est” on the touchstone of the Mineral Development Act 1948, the Mining Concession Rules 1970 framed under it, the Contract Act 1872 and the Transfer of Property Act 1882. The judgement can only be welcomed since all this skullduggery and bending of the laws and rules seems to be typical of the manner in which the mineral wealth of Balochistan has been handled since independence. Nothing, no law, no rule, seems to stand in the way of concessions to foreign interests and their local collaborators in selling the natural resources of the poorest province of Pakistan for a song. This has led Baloch nationalists to bitterly oppose such blatant exploitation and appropriation of the rights of the people of the province over their natural resources. One only has to cast one’s mind over the sorry history of Sui gas, the Saindak copper and gold project, Gwadar Port and sundry others to understand the depth of bitterness generated amongst generation after generation of the Baloch since independence at the ‘internal colonialist’ policies they have been subjected to. Unfortunately, instances of redress or compensating for past wrongs too have been conspicuous by their absence in the case of Balochistan. Hence the current Baloch generation’s veering towards separatism, having given up hope of justice or equity from the state.

    To return to Reko Diq, a few facts will highlight the literal gold mine it represents. Reko Diq lies in Chaghai District, 70 kilometres northeast of Naukundi, close to the confluence of the Afghanistan and Iran borders. The desert site is estimated to hold 5.9 billion tons of copper ore, of which 2.2 billion tons is considered mineable. This would yield 200,000 tonnes of copper and 250,000 ounces of gold per annum. Estimates of the value of the deposits vary according to the fluctuations in the price of copper and gold, but the lowest estimate is a worth of $ 3.3 billion and rising because of price escalation in the international market. The struck down agreement between the Balochistan government and TCC gave the former a 25 percent stake and the latter the remaining 75 percent. Baloch anger over one more instance of the exploitation by outsiders (foreign and other provinces of Pakistan) of its natural resources had been rising since 2010 and eventually dragged Aslam Raisani’s government into the ‘nationalist’ camp. Now, after the original and later agreements have been declared null and void by the SC, certain questions linger. First, what effect will the SC decision have on the international arbitration proceedings initiated by TTC and what will be the fallout on foreign investment in Pakistan as a whole? Second, lacking the finance and expertise, how will the Balochistan or federal government develop the Reko Diq reserves of copper and gold? The weight of the SC decision has come down on the side of Pakistani and Baloch interests, as it should. But what follows will be interesting to watch. Dr Samar Mubarakmand, our prominent nuclear scientist, has been offering his services all over the place, first for the Thar coal project (his underground gasification proposal having proved unfeasible by now) and now the Reko Diq copper and gold project. With due respect, nuclear science is a different discipline from mining. What the Balochistan and federal governments should do is seek finance and expertise internationally, but this time sign agreements in an open, transparent manner according to the laws and rules of the land and best international practice, and that too not by any interim or caretaker setup, but by a government mandated by the people to do so while upholding the interests of the local people of the area, province, and country. Are we capable of getting this right? Given the track record revealed by the SC case, it remains to be seen.

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  14. #14
    Forum Administrator bilalhaider's Avatar
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    Reko Diq: the other side

    EARLIER last month, a three-member bench of the Supreme Court headed by Chief Justice Iftikhar Chaudhry declared null and void the Reko Diq gold and copper mine agreement, the Chagai Hills Exploration Joint Venture Agreement (CHEJVA), with Tethyan Copper Company (TCC).

    In view of the sheer value of the stakes involved (estimated to be in the billions of dollars), is it time to rejoice over yet another judgment of the Supreme Court that is ostensibly aimed at protecting our country’s natural resources from “exploitation” by a foreign entity?

    More importantly, in view of the ongoing arbitration proceedings before the International Chamber of Commerce (ICC) and the International Centre for Settlement of Investment Disputes (ICSID), what effect, if any, would this Supreme Court judgment have? Could this agreement be considered illegal conclusively and definitively on the basis of the Supreme Court judgment alone?

    To the consternation of many Pakistanis, this Supreme Court judgment would neither affect the ongoing arbitration proceedings before the ICC and the ICSID nor have a substantial effect on the rights of TCC to obtain a mining lease.

    This is not because these institutions do not recognise Pakistan’s apex court nor because of any questions about the Supreme Court assuming jurisdiction of a matter that is not within its jurisdiction. It is primarily because the legality or validity of the CHEJVA is not at issue before these arbitral tribunals.

    In the case of ICSID proceedings in particular, they are being conducted pursuant to Article 13(3)(a) of the bilateral investment treaty between Pakistan and Australia. Pakistan was left with no choice but to submit the dispute for arbitration which Pakistan did by agreeing to arbitrate, through written consent, within 30 days after receiving the request for arbitration.

    Therefore, the ICSID arbitration was neither initiated on the basis of some arbitration clause in the CHEJVA nor has it any connection with the fundamental issue decided by the Supreme Court, that is, the legality of the CHEJVA.

    The ICSID tribunal is primarily dealing with TCC’s allegation that Pakistan breached its contractual obligations under the bilateral investment treaty between Pakistan and Australia and general international law.

    This was made abundantly clear in ICSID’s order of December 2012 in connection with a stay sought by TCC against mining activities in a specific area on the grounds that such activities would cause irreparable harm to the work that was already done in TCC’s deposit areas.

    The ICSID tribunal rejected this request and allowed the Balochistan government to proceed with its mining activities in a particular deposit area subject to certain conditions.

    Although the government officials and lawyers trumpeted this decision as a huge victory for Pakistan, it is important to understand that the tribunal still has to decide the principal issue of whether or not there was a contractual breach on the part of Pakistan and in case of a breach, whether damages or specific performance should be ordered.

    In terms of remedies, the ICSID convention gives the tribunal power to order pecuniary or non-pecuniary remedies including restitution, that is, restoring the situation that existed before the breach or wrongful act was committed.

    Pakistan has argued that TCC has no basis for claiming specific performance of the agreement and could only claim damages. TCC, on the other hand, has argued that specific performance, if materially possible, should be preferred over other remedies including damages.

    In case the ICSID tribunal renders an award in favour of TCC, at a minimum, Pakistan would have to pay a significant amount of money in damages. More importantly, if the tribunal orders specific performance, it would essentially mean that Pakistan would have to perform all those obligations that it was contractually obliged to do in the first place, that is, before the arbitration proceedings were initiated. In an op-ed on the Reko Diq matter published last year, I had discussed the Supreme Court’s direction to the Balochistan government to request the ICC and ICSID to take no further action in the arbitration proceedings while the issue of validity of the agreement was pending before the Supreme Court. I had raised the issue of whether the Supreme Court order was in line with international law.

    Almost one year on, the agreement has been declared illegal by the Supreme Court but the question remains whether the Supreme Court’s order was in line with not just the relevant international law but also with Pakistan’s contractual obligations to foreign investors under a bilateral investment treaty.

    Worse still, if the arbitral tribunal orders specific performance of the agreement, the Supreme Court’s declaration of the CHEJVA as a void agreement would essentially be of no relevance or consequence.

    The writer is a partner at the Lahore-based law firm of Rana Ijaz & Partners. He is a graduate of Columbia Law School and a member of the New York Bar.
    Reko Diq: the other side | Opinion | DAWN.COM

  15. #15
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    Re: Reko Diq: the other side

    Pakistan must resolve the Reko Diq issue.

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    Tethyan Drops Reko Diq. project in Pakistan

    Barrick, Antofagasta venture gives up Pakistan project Reko Diq
    May 8, 2013

    LONDON, May 8 (Reuters) - Tethyan Copper, a joint venture between Canada's Barrick Gold and Chilean miner Antofagasta, has given up hope of eventually mining Reko Diq, a disputed but promising copper-gold project in Pakistan's poorest region.

    Instead, Tethyan said in a statement on Wednesday that it would seek monetary damages as compensation for what it says are Pakistan's breaches of contract and treaty rights, and those of the region, Baluchistan.

    "Recent developments have regrettably compelled Tethyan to withdraw the request for specific performance... While we have long hoped to mine Reko Diq, as is Tethyan's right, the conduct of Pakistan and Baluchistan has made that goal impracticable," Tim Livesey, Tethyan Chief Executive, said.

    "We will pursue our claims for monetary damages, including lost profits for the mining operations, in the international arbitrations."

    Since 2006, Tethyan has invested over $220 million for the development of a copper-gold mine at Reko Diq.

    Barrick, Antofagasta venture gives up Pakistan project Reko Diq | Reuters

  17. #17
    Member somebozo's Avatar
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    Re: Tethyan Drops Reko Diq. project in Pakistan

    Extraction of gold and precious metals should indigenised.

  18. #18
    Forum Administrator bilalhaider's Avatar
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    Re: Tethyan Drops Reko Diq. project in Pakistan

    Until the political climate and security conditions improve drastically, reko diq will only remain a promising prospect. Huge blow for pakistan. No one wants to work here in these existing conditions.

  19. #19
    Senior Member Hope's Avatar
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    Re: Tethyan Drops Reko Diq. project in Pakistan

    I think there is more to this than meets the eye. It was the provincial govt that was causing the hassle and allegedly not granting th licences necessary

  20. #20
    Elite Member sparkling's Avatar
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    Fears grow about Reko Diq Gold mines

    Fears grow about Reko Diq Gold mines...Baloch senator says deal offered to China



    WASHINGTON: While major world mining and investment companies are preparing to invest big time, big money in Balochistan, specially in the mining sector, suspicions and doubts that the biggest gold mine of Reko Diq may be quietly handed over to China as part of the growing economic ties are also coming to the fore.

    Official and business circles have been wondering for some time what will happen to the multi-hundred billion dollar Reko Diq gold and copper mines after the world’s largest mining company, Barrick Gold of Canada, was thrown out of Pakistan by the Supreme Court of Pakistan during the PPP regime.

    But after the recent visit of high level government delegation to China and a flurry of quick MoUs and super-paced exchange of visits, an important leader from Balochistan, former Senator Sana Baloch has alleged publicly that the government has promised these mines to China in a year or so.

    While the Government leaders strongly denied any deal or any promise made during the Beijing visit, an official Pakistan Government statement assuring that the Reko Diq mines will be given to the highest bidder in an international tender is still awaited.

    Meanwhile as the wait continues, world mining companies are expecting and waiting for Pakistan to float international the tenders inviting bids for Reko Diq and some are ready to offer more than $100 billion in 30 to 35 years, insiders of the mining industry say.

    The ousted Barrick Gold had promised less than a billion a year in 56 years but they never shared what they had found during the many years of exploration they did in Reko Diq. What is generally believed is that Reko Diq is bigger than Afghan Aynak mines which were estimated by President Karzai at over $3 trillion.

    Sana Baloch’s charge has come amid a frenzy of shuttle economic activity between Islamabad and Beijing. A top level economic delegation led by Zhang Xiaoqiang, vice chairman National Development and Reforms Commission (NRDC) is in Islamabad today and was asked by Federal Minister for Planning and Development Ahsan Iqbal to raise ceiling of Chinese investments in Pakistan to $10 billion from present $3 billion.

    The government has been speaking about Chinese investments of between $18 to $20 billion in Gwadar-Kashgar Highway, the bullet train and Lahore-Karachi Motorway in the coming years but what is not yet been explained is how the Chinese will be repaid for these investments.

    One form of repayment is now being suspected in the form of handing over the $300 billion plus Reko Diq mines to China on the pattern of the Saindak Copper mines, at almost a throw-away price.

    Senator Sana Baloch has made this allegation: “Chinese authorities were assured of getting the world’s richest copper-gold deposit, Reko-Diq, by next year – again without following international transparent norms.” “Shady deals in the name of brotherly relations have deprived the people of Balochistan of any benefits they can get from these resources. Not a single contract has ever been made public,” the angry senator from Balochistan says. “I repeatedly requested details of agreements and contracts signed during the Musharraf regime, but to no avail.”

    The Reko Diq issue is awaiting a decision in the international arbitration forums where the Canadian Barrick Gold has filed cases against Pakistan for compensation. These cases may be decided in a few months and involve only a few million dollars but the world mining market is preparing seriously for bidding for the mines in a big way as these companies realize that Reko Diq offers billions of dollars of profits and financial opportunity for the host country.

    In one such case, three weeks back the Delloite Finance Corporation of Canada, the single largest professional services organization in the world in 2010, issued a Letter of Interest, through its mining division, to an American mining company preparing for the big tender in a joint venture with a major Australian capital markets investment organization which has at least 10 world class mining companies ready to bid for Reko Diq.

    Experts fear that if the Government did not opt for a transparent international tender for Reko Diq, hundreds of billions of dollars may be lost in the coming years just like the Saindak Copper mines where Pakistan did not benefit significantly as General Musharraf first gave the mines to China and then extended the deal for another five years.

    No details of what Pakistan gained are available as against the potential and the promises that were made but Senator Sana Baloch says Gwadar, Saindak, the Duddar Lead-Zinc project and several other such deals are a complete mystery for the common Baloch.

    He says the multi-billion copper-gold Saindak project is being extracted, without any monitoring in the past 10 years by a Chinese company. “According to official reports, copper-gold worth $633.573m was extracted during 2004-08. The Balochistan government received a paltry two percent share, while half the profits go to Beijing and 48 percent to Islamabad,” he says in an article sent to The News. (see page-6)

    For Reko Diq the Supreme Court, although in a veiled reference, guided the Government of Balochistan to hold an international tender like the one held in Afghanistan’s Anyak Copper deposit.

    In the Afghan tender, supervised by the World Bank, eight international companies from many countries had contested. It was globally reported that a Chinese company allegedly tried to bribe a Minister in Afghanistan paying him $30 million but was caught.

    Experts say if for an investment of up to $20 billion over the next 20 years, the Chinese are handed over the multi-hundred billion Reko Diq mines, in a non-transparent manner, it would be the greatest open and shut robbery and treachery with the country.

    By getting what is its right, Pakistan can build many motorways and bullet trains on its own, provided the rulers keep the national interest in mind, says one mining expert.


    http://www.thenews.com.pk/Todays-New...ernment-denies

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