Category Archives: Mining

Reko Diq: Pakistan versus Gold Diggers

These narratives show how foreign investors are a double-edged sword for Pakistan. TCC was suspected of lending support to Baloch separatists. 

Pakistan has recently been garnering a lot of attention in international tribunals. A recent case is the Reko Diq case, which led to arbitration in the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). In Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan (ICSID Case No. ARB/12/1), ICSID has ruled that Pakistan has to pay a $5.8 billion penalty to a mining company, the Tethyan Copper Company (TCC). It is an oddity that the Pakistani public has been disabled from knowing the full details of the ICSID arbitration judgment. The condition for the publication of the award is that both parties must consent to its publication and apparently there is no consensus that it should be published, or alternatively there is consensus that it should not be published. Either way that is rather opaque and lacks transparency. Yet we do know the identities of the arbitrators and the costly law firms employed by the parties and all the procedural steps in the arbitration (which is rather pointless indeed without knowing the full and exact details of the final arbitration award). 

It is rather appalling that the award is not in the public domain and the people of Pakistan are being denied access to the full details of the decision. Reko Diq is a region in Balochistan that has large gold and copper reserves. TCC acquired an exploration license in 2006, buying it from the company BHP Minerals. Though this seems a very recent mining project, TCC itself is a joint venture by other foreign companies, and BHP had been granted licenses since 1993 by the Balochistan Development Authority (BDA) under the Chagai Hills Exploration Joint Venture Agreement (Chevja). Now that TCC was exploring Reko Diq’s reserves, it completed its feasibility study in 2010, and applied for a mining lease, but it was denied. Chevja had been challenged by petitioners before. In 2013, the Supreme Court decided that the agreement (Chevja) was void ab initio. In 2009, the provincial government had already terminated Chevja. Continue reading

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Filed under Accountability, Balochistan, Corruption, Courts, Discussion, Economy, Legislation, Mining, Pakistan, World Bank

Majyd Aziz Balagamwala: Making Minerals a National Priority

thThe European Parliament presented a year-end gift to Pakistan by according us the status of Generalized Scheme of Preferences (GSP) Plus that should provide a much needed boost in exports, especially textiles and leather. Everyone concerned with this achievement patted themselves on the back for a job well done. It did not matter who did what or how or what really spurred the European Parliament to take a positive decision. However, in the initial euphoria, it seemed that stakeholders completely forgot the importance of what is nonchalantly referred to as non-traditional exports. Minerals, for example.

Various trade development policies and frameworks did provide incentives and subsidies for many items but there has never been a focused attention accorded to minerals: see the Mines Act (IV of 1923) which although old still gives rights to workers and sets out basic standards. There is the usual bragging that Pakistan is richly endowed with natural resources and has billions of tons of coals to last a century, etc, etc but actions speak louder than words. The Pakistan Strategic Trade Policy Framework (2012-15) earmarked only “Rs 20 million for subsidy at 100 per cent of the prevailing mark-up rate for establishing mining and processing units in Khyber Pakhtunkhwa and Balochistan.”Interestingly, the same amount is allocated for Women’s Chamber of Commerce and Industry. Continue reading

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Filed under Discussion, Legislation, Mining, Pakistan