Mining Journal > Exploration & Development > Pakistan rejects Antofagasta-Barrick Reko Diq lease

Pakistan’s Balochistan province rejected an application for a mining lease by Tethyan Copper Co, a joint venture between Antofagasta plc and Canada’s Barrick Gold Corp, according to a letter from the provincial administration seen by Bloomberg News.

The company’s response to a request for clarifications on its proposal to build a US$3.3 billion copper mine was “found unsatisfactory,” said the letter dated Nov 15 and signed by Bashir Mastoi, director general for mines and minerals, citing government rules on issuing such leases.

Shares of Antofagasta fell as much as 1.8% in London and traded down 0.3% at 1,163 pence as of 8:15 a.m. local time.

Mastoi wasn’t available for comment when Bloomberg reached his office by phone. Samia Shah, manager of corporate communications at Tethyan in Islamabad, declined to comment, citing company policy.

Tethyan’s application to mine copper and gold at Reko Diq, a rocky desert location in southwest Pakistan, has been stalled because of the dispute over the lease application. 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 a year for 56 years.

The Balochistan government had given Tethyan 30 days until Oct 19 to clarify 10 issues about the application and refused the company’s request to extend the deadline by 60 days and negotiate, Tethyan chief executive Tim Livesey said last month.

Tethyan would consider international arbitration in London if the two parties failed to resolve the dispute, he said in an Oct 20 phone interview.

The joint venture filed a “notice of dispute” on Oct. 20 to gain time to resolve issues with the local government about its mining lease, Livesey said. The notice gave Tethyan 120 days to engage the government of Baluchistan province in talks over the lease application, he said.

While Tethyan has proposed to export copper ore concentrate from its mining operations, Baluchistan wants a copper smelter built locally to refine the metal, according to Livesey.

Nov 16 (Bloomberg)