Context
The Chilean newspaper Diario Financiero published a report on Tuesday stating the Balochistan government is likely to approve the Reko Diq copper mining project. The mining project is joint venture between Chilean mining giant Antofagasta, Canadian Barrick, and the Pakistani government. The joint project operates under the banner of Tethyan Copper Company (TCC) and is based in Islamabad.
The project was delayed due to a standoff between TCC and the Balochistan government over the setting up of a smelting and refining facility and ownership issues. TCC has said it would not be able to set up such a facility locally. However, the Chinese Jinchuan Group has offered to construct the smelting and refining service in Pakistan, an option favored by the Balochistan government. It is now believed the project would now be split in two, the mining part (TCC) and the smelting and refining segment (Jinchuan). TCC has said it has no objections to this arrangement.
Antofagasta and Barrick control the $3.3 billion project and hold a 37.5% stake, while the government of Pakistan holds 25% in the joint venture, TCC. The TCC has offered the Balochistan government a 25% ownership in the project. According to an estimate, during the fist five years of operation, Reko Diq can produce 190,000 metric tons of copper and 270,000 troy ounces of gold a year.
The Supreme Court of Pakistan had earlier supported TCC’s claim to 100% ownership of the mines, as its efforts led to the discovery of these mineral deposits. The Court is now giving the Balochistan government 120 days to decide the future of the project, failing which, the case would be reopened.
PoliTact is following these and other developments associated with Pakistan-China and Eurasia trade and energy corridor very closely.
