Islamabad: Pakistan's Supreme Court on Friday endorsed a settlement for resuming a mining project in the mineral-rich province of Balochistan, potentially saving the country from paying billions of dollars in fines. The endorsement was an essential prerequisite condition for Canadian mining firm Barrick Gold to resume operations in Balochistan province.
President Arif Alvis sent a legal reference to the apex court in October for an opinion on the settlement deal signed in March between Barrick Gold and the Pakistan government. Alvi asked the court to address two issues, including if the new agreement was in line with the court's judgment of 2013 and if the proposed Investment Protection Act was compliant with the Constitution.
The five-member bench of the court led by Chief Justice of Pakistan Umar Ata Bandial issued a 13-page opinion on the case, which it had reserved on November 29 at the conclusion of the hearing. The court ruled that there is no violation of the apex court's 2013 judgment, which declared the first agreement as void. It stated the federal and provincial governments made the agreement with an expert opinion and that the Balochistan Assembly was taken into confidence.
The process for the reconstitution of the Reko Diq project has been undertaken transparently and with due diligence. The agreements are being signed by authorities duly competent to do so under the law, the ruling stated. The court also opined that there was no illegal clause in the contract, and the Canadian mining firm had assured that labour laws would be enforced and ensured corporate social responsibility.
The bench maintained that the Foreign Investment Bill was not just for Barrick Gold, but for every company that wanted to invest more than USD 500 million in the country. Pakistan was on tenterhooks as it would have had to pay a penalty of USD 100 million if the deal was not finalised with Barrick Gold on December 15.
The first agreement for the mining project was signed in 2006 with Barrick Gold and Chile's Antofagasta, which were part of the consortium Tethyan Copper Company (TCC) that unearthed gold and copper deposits at Reko Diq. But the open-pit mine project came to a standstill in 2011 after the local government refused to renew Tethyan Copper's lease and later in 2013, the Supreme Court declared it invalid. However, Pakistan had to face international litigation and in July 2019, the International Centre for Settlement of Investment Disputes (ICSID) Tribunal ruled in favour of TCC, ordering Pakistan to pay a hefty fine of USD 5.9 billion. (PTI)
