Reko Diq Case: Pakistan Asked To Pay $5.9 Billion In Compensation To Mining Firm By World Bank’s Arbitration Body

The International Centre for Settlement of Investment Disputes (ICSID), one of the five organisations of the World Bank Group, has ordered Pakistan to pay $5.976 billion in compensation to Tethyan Copper Company (TCC), a joint-venture between Canada’s Barrick Gold and Chile’s Antofagasta, Dawn reported.

The penalty slapped on Pakistan is one of the biggest in ICSID’s history.

TCC had filed claims before the World Bank’s arbitration body in 2011 after it was refused permission to develop the rich Reko Diq gold and copper mine in Pakistan’s western Balochistan province despite making a huge investment of $220 million in the project. Balochistan provincial government had rejected an application by the TCC’s local operating subsidiary for a mining lease in respect of Reko Diq.

The case between the Pakistani government and the international mining behemoth has been ongoing for seven years. The company had initially pressed for $11.43 billion in damages for the termination of their contract but Pakistan was able to bring down the claim to $4.08 billion.

Located in a small town in Chagai district in Balochis­tan, the Reko Diq mines are part of the Tethyan Magmatic Arc, a mineralised belt that runs through Iran, Afghanistan and into Pakistan. The mine is known for its vast gold and copper reserves and is believed to have the world’s fifth largest gold deposit.

Pakistan government has been exploring various options to resolve the commercial dispute with TCC including an out-of-court settlement and a proposal to attract new foreign investors that would take on the project and compensate TCC.