Pakistan's supreme court yesterday ruled that the Reko Diq copper-gold mining lease in Balochistan province held by a Canadian-Chilean consortium led by gold mining giant Barrick Gold Corp is void as it conflicts with the country's laws.
The Reko Diq mining lease, which is part of the Tethyan copper belt, contains one of the world's largest low grade copper-gold deposits. It is located in the Chagai district in the northwestern corner of Balochistan, a backward and violence prone area of the country.
Barrick Gold, the world's largest gold producer, and Chile's Antofagasta Plc own 37.5-per cent stake each in the joint venture known as Tethyan Copper Company (TCC) with the remaining 25 per cent held by the provincial government.
The venture is the largest foreign direct investment mining project in Pakistan with an estimated capital outlay of $3.3 billion.
In its 16-page order, the country's apex court stated that the agreements of 1993 regarding Reko Diq and subsequent amendments were unlawful and TCC no longer had any rights in relation to the Reko Diq agreement.
Although reasons for the dispute are murky, some analysts speculate that Chinese interest in the deposits could also be a cause.