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ISLAMABAD: Leading financial and legal advisers told the Supreme Court on Monday that the proposed agreement for mineral exploration in the Reko Diq area of Balochistan would be of immense benefit to the country and help clear “all of its liabilities”.
In a presentation to a five-judge SC bench, which had taken up a presidential reference about the latest Reko Diq agreement, Pierre Cailleteau, the managing director of Lazard Freres SAS (financial adviser), said the agreement would pay rich dividends to Pakistan.
The assurance came when Justice Yahya Afridi, a member of the SC bench, asked Additional Attorney General (AAG) Chaudhry Aamir Rehman to seek an assurance in writing from the advisers that this was the best option available to Pakistan under the circumstances.
The presentation was given to the court by a consortium of advisers in response to previous directives for explaining the salient features of the agreement being thrashed out between Pakistan and Reko Diq Mining Company (RDMC).
No company other than Barrick Gold ready to invest in the project due to $6.5bn award against Islamabad
When Chief Justice of Pakistan (CJP) Umar Ata Bandial asked what investors expected from the Supreme Court through this reference, the AAG said one of the reasons for filing the reference was to avoid controversies since the government had given certain concessions to investors.
In reply to another question by Justice Afridi, Mr Cailleteau said the advisers had not found any other investor to offer better terms to Pakistan at a time when it was facing a $6.5 billion award against it on a dispute between the government and Tethyan Copper Company.
The award was decreed by the International Centre for Settlement of Disputes.
When Justice Ijazul Ahsan asked whether any other company was willing to invest and give a better offer than Barrick Gold Corporation (BGC), the advisers said the consortium had explored this possibility with a number of companies, but none showed an interest in investing in the project because of a huge liability in the shape of the $6.5bn award.
Long life
The court was told that Reko Diq was a unique project since it had a mining life of 47 years, whereas the average life of copper mines the world over varied from 17 to 20 years.
The project has a potential of extracting 400,000 tonnes of copper annually and was amongst the top 10 copper mines in the world, the advisers said.
The projected economic benefit to the government of Balochistan over the next 40 years is estimated at $32bn, including equity, taxes and royalties.
Published in Dawn, November 8th, 2022
