In a significant change on Sunday, the government of Pakistan awarded the contract for the Reko Diq project to a Canadian company, "Barrick Gold". The court imposed a penalty of $11 billion on Pakistan, which has also been waived off. Earlier, the World Bank’s tribunal imposed a penalty on Pakistan.
%20(1).png)
%20(1).png)
Canva Premium Account
People from Canada's Barrick Gold company met with Pakistan's government many times to end a long-running dispute.
A deal for the project was signed in 2006 between a Canadian company, "Barrick Gold," a Chilean company, "Antofagasta," and the governments of Pakistan and Balochistan.
Under the agreement, the two companies were given a 37.5% share each, and a 25% share was given to the Balochistan government.
The Barrick-Antofagasta joint venture discovered huge mineral deposits more than a decade ago. The project was suspended in 2011 because Pakistan refused a licence to Barrick Gold and Chile’s Antofagasta Pic to develop Reko Diq. It resulted in a dispute between the two parties.
On July 17, 2019, the world bank’s tribunal of the international center for settlement of investment disputes stated that Pakistan had violated a Pakistan-Australia bilateral investment. Tethyan Copper Company Limited (TCC) has to pay Pakistan $6 billion plus interest because of a court order.
The world bank’s tribunal says that Pakistan has unjustifiably denied the lease to mine copper and gold at the Reko Diq mine.
In 2021, the Federal government of Pakistan started talks with Barrick Gold to settle the dispute over Reko Diq because its other partner company, Antofagasta, was seeking a monetary settlement of their share of $6 billion dollars.
Antofagasta, a Chilean company, said in a separate statement that they have agreed to exit the project as their growth policy is now concentrated on the production of copper and its by-products in America.
Barrick said it will operate a project that will grant a mining lease, surface rights and an exploration license. A new agreement was signed between Barrick Gold and the Pakistan government.
People from the Federal government, the Balochistan government, and a group from Barrick Gold signed a new agreement.
As per the terms of the new settlement, the Reko Diq will be revived by Barrick Gold in Pakistan’s partnership. The deal was reached after many rounds of discussion over the last three years. However, the deal has to be accepted by parliament and the supreme court.
Pakistan and Barrick Gold stakeholders will now hold 50% each of the reconstituted project. The federal government and the Balochistan government will each get half of the 50% share.
The federal government will split its 25% share of the company evenly between three state-owned entities: oil and gas development corporation limited, Pakistan petroleum limited, and government holdings Pakistan limited.
A company that is fully owned by the government of Balochistan will hold Balochistan’s 25% share.
Barrick’s chief executive officer and president says,
A delegation from Barrick Gold was called on by the prime minister. On the occasion, the Canadian chief commissioner to Pakistan, MS Wendy Gilmour, was also present. Prime Minister Imran Khan witnessed the signing.
He appreciates the efforts of the negotiating team to come up with a deal that is fair for the people of Balochistan.
He also congratulated the nation and people of Balochistan on a successful deal with Barrick Gold. He further said that $10 billion would be invested in the province. It will create 8,000 new jobs.
In a tweet, Prime Minister Imran Khan stated that Reko Diq will be the world's largest gold and copper mine.It will also free us from debt in a new era of prosperity and growth.
Initiation of the Project
The Reko Diq project in southwestern Pakistan hosts one of the world’s largest gold and copper deposits. The Reko Diq area can produce 200,000 tonnes of copper and 250,000 ounces of gold a year.A deal for the project was signed in 2006 between a Canadian company, "Barrick Gold," a Chilean company, "Antofagasta," and the governments of Pakistan and Balochistan.
Under the agreement, the two companies were given a 37.5% share each, and a 25% share was given to the Balochistan government.
The Barrick-Antofagasta joint venture discovered huge mineral deposits more than a decade ago. The project was suspended in 2011 because Pakistan refused a licence to Barrick Gold and Chile’s Antofagasta Pic to develop Reko Diq. It resulted in a dispute between the two parties.
On July 17, 2019, the world bank’s tribunal of the international center for settlement of investment disputes stated that Pakistan had violated a Pakistan-Australia bilateral investment. Tethyan Copper Company Limited (TCC) has to pay Pakistan $6 billion plus interest because of a court order.
The world bank’s tribunal says that Pakistan has unjustifiably denied the lease to mine copper and gold at the Reko Diq mine.
The Case was Investigated by the Federal Government
Imran Khan started working on Reko Diq's case right away when he took over. He told his team to come up with solutions that would work. In August 2019, prime minister Imran Khan set up a committee for negotiations. International advisors assisted the federal and provincial governments.In 2021, the Federal government of Pakistan started talks with Barrick Gold to settle the dispute over Reko Diq because its other partner company, Antofagasta, was seeking a monetary settlement of their share of $6 billion dollars.
Antofagasta, a Chilean company, said in a separate statement that they have agreed to exit the project as their growth policy is now concentrated on the production of copper and its by-products in America.
Barrick said it will operate a project that will grant a mining lease, surface rights and an exploration license. A new agreement was signed between Barrick Gold and the Pakistan government.
People from the Federal government, the Balochistan government, and a group from Barrick Gold signed a new agreement.
As per the terms of the new settlement, the Reko Diq will be revived by Barrick Gold in Pakistan’s partnership. The deal was reached after many rounds of discussion over the last three years. However, the deal has to be accepted by parliament and the supreme court.
Pakistan and Barrick Gold stakeholders will now hold 50% each of the reconstituted project. The federal government and the Balochistan government will each get half of the 50% share.
The federal government will split its 25% share of the company evenly between three state-owned entities: oil and gas development corporation limited, Pakistan petroleum limited, and government holdings Pakistan limited.
A company that is fully owned by the government of Balochistan will hold Balochistan’s 25% share.
Barrick’s chief executive officer and president says,
"This is a unique opportunity for Balochistan. It will bring many direct and indirect benefits to Pakistan and Balochistan for decades to come."
A delegation from Barrick Gold was called on by the prime minister. On the occasion, the Canadian chief commissioner to Pakistan, MS Wendy Gilmour, was also present. Prime Minister Imran Khan witnessed the signing.
He appreciates the efforts of the negotiating team to come up with a deal that is fair for the people of Balochistan.
He also congratulated the nation and people of Balochistan on a successful deal with Barrick Gold. He further said that $10 billion would be invested in the province. It will create 8,000 new jobs.
In a tweet, Prime Minister Imran Khan stated that Reko Diq will be the world's largest gold and copper mine.It will also free us from debt in a new era of prosperity and growth.