An arbitration tribunal of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) has ruled against Pakistan in the Reko Diq gold-cum-copper mine project.
The decision went in favour of Tethyan Copper Company (TCC) — a joint venture between Antofagasta of Chile and Barrick Gold Corporation of Canada — which filed the case in 2011 claiming that Pakistan had unlawfully denied a mining lease.
According to a statement issued by Barrick Gold, the world’s largest gold mining company, the decision rejected Pakistan’s final defence against liability and confirmed that Pakistan had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.
The damages phase of the proceedings will begin on March 22 (today), during which the tribunal will consider submissions from the parties to determine the amount that Pakistan must pay to the TCC. A ruling on the quantum of damages is expected in 2018.
At the conclusion of this phase, Tethyan will receive an award entitling it to fair market value of the project at the time when the mining lease application was denied The project in Reko Diq — a dusty little town located in Chagai, Balochistan — was expected to require an initial capital investment of more than $3b. It is one of the world’s largest undeveloped copper and gold deposits, with a potential mine life of more than 50 years.
