Mining Journal > Exploration & Development > Antofagasta, Barrick file Reko Diq notice

The Reko Diq joint venture between Antofagasta plc and Barrick Gold Corp to build a US$3.3 billion copper mine, filed a “notice of dispute” to gain time to resolve issues with the local government about its mining lease.
     
The notice, filed yesterday, gives Tethyan Copper Co 120 days to to engage the government of Baluchistan province in talks over the lease application, Tethyan's chief executive Tim Livesey said by phone from Islamabad.

The government gave Tethyan 30 days until Oct 19 to clarify ten issues about the application and refused the company’s request to extend the deadline by 60 days and negotiate, Livesey said. A call to the Quetta office of the Baluchistan government after business hours wasn’t answered.

“We’re hopeful and sure they will join us in discussion,”
Livesey said. “However at the end of the 120 days if we haven’t been able to resolve the dispute, the next step will be to trigger international arbitration in London.”

Tethyan’s application to mine copper and gold in Reko Diq, a rocky desert location in far southwest Pakistan, has been stalled because of the dispute. The company says it has spent more than US$500 million on the project and located enough ore to produce 200,000t of copper and 250,000oz of gold per year for 56 years.

The ten issues, which are outlined in a letter, include why Tethyan hadn’t submitted plans to build a smelter in the area and whether it’s a registered company in the country, Livesey said. While Tethyan has proposed to export copper concentrate, Baluchistan wants a copper smelter built locally to refine the metal, Livesey said.

“It seemed that they are trying to find whatever reason they can not to grant the mining licence,” he said. “We hope it’s a communication error within the government; we hope it’s only a misunderstanding so we can solve during discussions.”

The government, which last year refused to become a 25% equity partner in the project, asked why Tethyan applied for the licence on its own and not together with the government, Livesey said.

The letter also criticized Tethyan for not making a “proper feasibility or exploration of the deposit” and failing to achieve agreed targets, Livesey said. “We disagree,” he said. “It’s a very good, high-quality, international study.”

Oct 20 (Bloomberg)