ISLAMABAD: In February of 2011 Tethyan Copper filed an application
for a mining lease (ML) over a mining area within the exploration
license EL?5 in the Chagai district of western Balochistan. The basis of
the application was a feasibility study (FS) of an initial mine
development at the Reko Diq project.
The FS was completed and
served on the Government of Balochistan in August 2010 under an existing
agreement between Tethyan Copper and the Government of Balochistan (the
Chagai Hills Exploration Joint Venture Agreement or ‘CHEJVA’). At the
time of the completion of the FS in 2010, and under the provisions of
the CHEJVA, the Government of Balochistan was entitled to become a 25%
equity partner in the project, enabling them to profit additionally from
the mine development and operations over and above the normal royalty
and taxation payments. The Government of Balochistan on November 24th
2010 decided not to become a participating party in the project.
Upon
receipt of the ML application from Tethyan Copper in February 2011, the
Government of Balochistan regulatory body responded in September 2011
with a number of observations, made in the context of an intended
refusal. Tethyan Copper was given 30 days to respond to the
observations. Tethyan Copper sought to meet with the Government of
Balochistan to better understand their observations and concerns and
requested an extension of an additional 60 days in order to engage with
the Government of Balochistan, however no extension was granted. Under
the CHEJVA, Tethyan Copper filed a ‘Notice of Dispute’ (NoD) on
Wednesday 19th October 2011. The NoD allows a 120 day period, during
which Tethyan Copper and the Government of Balochistan may seek to meet
and resolve the dispute. Tethyan Copper is hopeful that the Government
of Balochistan will engage to meet and discuss the ML application. We
would like to see the project move forward with the Government of
Balochistan as a participating partner, for the benefit of Balochistan
and Pakistan. It is our belief that this project has the potential to
become a model for the development of a modern mining industry in
Balochistan, contributing to the greater Pakistani economy through a
large initial foreign direct investment (the FS indicates $3.3 billion
initial capex) and through ongoing revenue generation and local
reinvestment during the 56 year mining operation. The owners of Tethyan
Copper are world class mining companies, listed on the main London, New
York and Toronto exchanges: Antofagasta PLC and Barrick Gold
Corporation. The mine would be constructed, developed and operated
transparently, using industry & international best practice. Online
