Islamabad, Dec 24: Mining firm Tethyan Cooper Company has approached the High Court of Justice in the British Virgin Islands for the enforcement of the USD 5.97 billion penalty imposed by an international tribunal against Pakistan in the Reko Diq case, a media report said on Thursday. The Reko Diq district in southwestern Pakistan’s Baluchistan province is famed for its mineral wealth, including gold and copper.
The World Bank’s International Center for Settlement of Investment Disputes (ICSID) is considering Pakistan’s appeal against enforcing the penalty over its cancellation of the Reko Diq mining lease for Tethyan Copper Corp (TCC), a 50-50 joint venture of Barrick Gold Corp. of Australia and Antofagasto PLC of Chile. The office of the Attorney General for Pakistan, however, has assured that Pakistan is vigorously contesting these proceedings using all available legal resources. The government is also engaged to settle the matter amicably, the Dawn newspaper reported.
“Without prejudice to such engagements, Pakistan has reiterated that the government will vigorously pursue proceedings initiated by the company in any jurisdiction and the government reaffirms its commitment to protecting national assets wherever they may be located,” a statement by the attorney general’s office said. The ICSID tribunal had taken up the dispute between Pakistan and the TCC after the latter claimed USD 8.5 billion when the mining authority of Balochistan rejected its application for a multi-million dollar mining lease in the province in 2011.
According to details available on Tethyan’s website, the Reko Diq Mining Project was to build and operate a world class copper-gold open-pit mine at a cost of about usd 3.3 billion. The company says its 1998 agreement with the Balochistan government entitled it to the mining lease, subject only to routine government requirements. The project stalled in November 2011 after the application was rejected. Pakistani officials say the mining lease was terminated by the government because it was secured in a non-transparent manner.
company had invested USD 220 million in Reko Diq. The Australian mining company sought help from the World Bank arbitration tribunal in 2012, and it ruled against Pakistan in 2017, rejecting an earlier decision by the Supreme Court. The tribunal opted to use a formula for calculating damages for the cancelled lease based on the assumed profits Tethyan might have earned from the mine over 56 years.
In July 2019, the tribunal slapped a whopping USD 5.97 billion penalty against Pakistan for denying the mining lease to the Australian company. The fine, of nearly USD 6 billion, including the damages award and interest, is equal to about two per cent of Pakistan’s GDP, the report said. In November 2019, Pakistan challenged the penalty and initiated proceedings seeking its annulment, it said.
The ICSID is still considering Pakistan’s appeal against the penalty over its decision to cancel the Reko Diq mining lease for the TTC and a final hearing will take place in May 2021, it said.
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