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ISLAMABAD: Prime Minister Imran Khan congratulated the nation and residents of Balochistan province over a successful agreement for the development of Reko Diq mine.
In a series of tweets, the prime minister expressed that Reko Diq mine would be potentially the largest gold and copper mine in the world and liberate the country from the crippling debt, ushering in a new era of development.
He further informed that a successful agreement was made with Barrick Gold for the development of Reko Diq. This has been achieved by setting an investment of $10 billion and creation of 8,000 new jobs.
“I congratulate the nation & ppl of Balochistan on successful agreement with Barrick Gold for development of RekoDiq mine after 10 years of legal battles & negotiations. Penalty of approx (approximately) $ 11 bn is off set, $10 bn will be invested in Balochistan creating 8000 new jobs,” the prime minister posted on his Twitter handle.
“RD will potentially be the largest gold & copper mine in the world. It will liberate us from crippling debt & usher in a new era of development & prosperity,” he added in a related tweet.
Pakistan has reached an out-of-court settlement of the Reko Diq project withAustralia’s Tethyan Copper Company (TCC) as the country was threatened with facing a penalty of $6 billion due to its decision to deny a mining lease.
The Attorney General for Pakistan (AGP) office, especially International Disputes Unit Head Additional Attorney-General (AAG) Ahmed Irfan Aslam, mainly negotiated the Reko Diq deal.
A new agreement was signed by representatives of the federal government and Balochistan with a delegation of Barrick Gold led by Chief Executive Dr Mark Bristow. As per the terms of the new agreement, the Reko Diq project shall be revived and developed by Barrick Gold in partnership with Pakistani companies.
According to the agreement, 50 per cent of the new project’s shares will be owned by Barrick Gold, while the remaining shares shall be owned by Pakistan, divided equally between the federal government and the provincial government of Balochistan.
The federal government’s shares of 25% shall be divided equally amongst three state-owned entities (SOE), namely Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL).
Balochistan’s shares shall be held by a company wholly-owned and controlled by the Government of Balochistan.
Earlier, the lawmakers of Balochistan expressed their satisfaction with the terms of the proposed deal after senior federal government officials addressed concerns on the out-of-court settlement for the Reko Diq project.
A senior official in the AGP’s office, along with additional secretaries of petroleum and finance, provided an eight-hour briefing to the members of the Balochistan Assembly in December 2021.
A day earlier, the Balochistan cabinet approved the proposed agreement and settlement regarding the Reko Diq project during a special cabinet meeting chaired by Balochistan Chief Minister Abdul Quddus Bizenjo.
“The cabinet thoroughly reviewed all aspects and points of the agreement,” an official handout said. The provincial cabinet expressed satisfaction over the stance of the Balochistan government regarding the multibillion-dollar copper and gold project.
Reko Diq project would guarantee an end to the prevailing sense of deprivation and backwardness of Balochistan, the statement stated. “It would be a game-changer,” it mentioned. Secretary minerals briefed the cabinet about the benefits of implementing the proposed agreement and project for Balochistan and its people.
$6 billion fine
In July 2019, an international arbitration tribunal of the ICSID struck a penalty of $6 billion on Pakistan for its 2011 decision to deny the mining lease to the TCC – a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile.
The tribunal, chaired by Germany’s Klaus Sachs and Bulgarian arbitrator Stanimir Alexandrov and UK’s Lord Hoffmann, had ordered Pakistan to pay over $4 billion in damages to TCC in addition to $1.7 billion in pre-award interest.
The tribunal had found that Pakistan had unlawfully denied the TCC a lease to mine copper and gold deposits at the Reko Diq mine. It had held that the state had committed an unlawful expropriation under the Australia-Pakistan bilateral investment treaty. Later, the TCC had approached courts in five different countries for the enforcement of the penalty imposed on Pakistan.