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.
The initial mine development plan envisages that in the processing plant about 110,000 tons of ore per day will be processed through flotation process and a 680 km concentrate pipeline will transport the product from the mine site to the port of Gwadar to a dedicated marine terminal facility at the port for storage and transfer of to shipping vessels for supply to smelters throughout the world. In order to secure optimal economies of scale efficiencies, lower mining and processing unit costs, a large scale mining and processing project is required.
The proposed processing plant will produce approximately 600,000 tons of copper concentrate a year, which will contain 28-31% copper and 7-22 g/ton gold which translates to about 200,000 tons copper and 250,000 ounces of gold per year. The commercial mining operations are anticipated to last for over 56 years with an estimated annual operating expense of about US$ 400 million of which 45%-50% will be spent nationally.
TCC is committed to the development of a mining initiative that has the potential to cause the transformation of Balochistan’s dormant mineral resources into profitable mineral reserves. The project offers the scale to significantly contribute to the uplift of the local people and strengthen the economy in general by generating long term revenues in the form of royalties, taxes, profit-sharing and employment opportunities. The project stakeholders including the Government of Balochistan and the Government of Pakistan shall be able to add significantly to their provincial and federal treasuries in order to undertake wider development projects in the best interest of the general masses. As soon as the TCC Reko Diq project goes into development, it will become a beacon for further investment into exploration and mining sectors in Balochistan and Pakistan in general.