TCC Reko Diq Project – Largest ever single Foreign Direct Investment mining project in Pakistan
The Reko Diq Mining Project is a US$ 3.3 billion capital investment project that promises to build and operate a world class copper-gold open-pit mine at Reko Diq in the northwest district Chagai of Balochistan province in Pakistan.
TCC completed an extensive and detailed bankable feasibility study establishing the basis for mine development at Reko Diq during August 2010 and submitted a Mining Lease Application in February 2011, along with an Environmental and Social Impact Assessment (ESIA) report. Progress on the project came to a standstill in November 2011, when the Government of Balochistan summarily rejected the application by TCC's local operating subsidiary, Tethyan Copper Company Pakistan (Private) Limited (“TCCP”), for a mining lease in respect of Reko Diq. TCC believes that, under the Chagai Hills Joint Venture Agreement (“CHEJVA”) between TCC and the Government of Balochistan, as well as under the Balochistan Mineral Rules 2002, TCCP was legally entitled to the mining lease subject only to “routine” government requirements.
In order to protect its legal rights, in November 2011 TCC commenced international arbitration proceedings at two forums: one against the Government of Pakistan with the International Centre for Settlement of Investment Disputes, asserting breaches of the Bilateral Investment Treaty between Australia (where TCC is incorporated) and Pakistan, and another against the Government of Balochistan with the International Chamber of Commerce, asserting breaches of the CHEJVA.
Despite the initiation of arbitral proceedings in order to protect its rights, TCC remains hopeful of an opportunity to reach a negotiated resolution to the case. It is TCC’s position that a negotiated grant of the lease would provide the best outcome for the Company and the people of Balochistan and Pakistan as a whole.