Sunday, March 20, 2022
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.
Taking to Twitter, 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."
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.
In a press conference, Finance Minister Shaukat Tarin shared details of the agreement and said that Barrick Gold would retain 50% of the shares. While the rest of the shares will be divided between the federal government and the provincial government of Balochistan.
The 25% share of the federal government would be divided between the State Owned Enterprises Oil and Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan (GHPL).
The finance minister said an agreement was signed in 2006 among a Canadian Company Barrick Gold, a Chilean company Antofagasta PLC, and governments of Pakistan and Balochistan to extract gold and copper from the Reko Diq mines reserve.
"As per the old agreement, 37.5% share each was given to the two foreign companies and 25% share was to given to the Balochistan government," he said.
He said 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 levelled a $6.4 billion award on the Pakistan government. Meanwhile, the London Court of Arbitration also imposed another $4 billion fine on Pakistan.
The PM pursued the case and directed to draw a suitable solution as early as possible due to which an agreement was settled today under which Antofagasta decided not to participate in the reconstituted project and withdrew from its claim of $3.9 billion in place of $900 million.
He informed that the $900 million would be paid by the three SOEs and in return they would get the 25% 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," added Tarin.
Tarin said Pakistan and Balochstan would be benefited for over 100 years from this project and the total worth is estimated to be over $100 billion.