Pakistan seeking reversal of $5.8 billion penalty imposed by international tribunal – Details here

New Delhi: An international tribunal has imposed penalty of 5.8 billion on Pakistan for denying a mining lease to an Australian company Tethyan Copper Corp.

Pakistan is seeking the reversal of the penalty saying that the huge amount of penalty imposed upon the country will deal a severe blow to the country already reeling under the impact of the coronavirus pandemic.

What is the case all about?

Tethyan Copper Corp., a 50-50 joint venture of Barrick Gold Corp. Of Australia and Antofagasto PLC of Chile.

Tethyan Copper discovered vast mineral wealth in the Reko Diq district in southwestern Pakistan's Baluchistan province which is famed for its mineral wealth, including gold and copper.

Last year an arbitration tribunal of the World Bank's International Centre for Settl­ement of Investment Disputes (ICSID) awarded the aforesaid penalty following the denial of a mining lease for the Reko Diq project in Balochistan in 2011.

Pakistan's has made an appeal against enforcing the penalty over its cancellation of the Reko Diq mining lease which the World Bank's International Center for Settlement of Investment Disputes is said to be considering.

It has been reported that both Pakistan and Tethyan expressed willingness to discuss alternative solutions or an outside settlement, although the status of any such talks on a deal is not clear yet

Prior to the denial of the mining lease application, TCC had completed a feasibility study showing that Reko Diq was one of the world's largest undeveloped copper and gold deposits, and had a potential mine life of over 50 years and an estimated initial capital investment of over $3 billion, an IANS reported had quoted last year.

The ICSID, which provides facilities for conciliation and arbitration of international investment disputes, rendered its judgement on Friday in a 700-page ruling against Pakistan.

Reko Diq gold and copper mines project case was decided by the Supreme Court of Pakistan in its original and appellate jurisdiction simultaneously in 2013 and 2014.

With Agency Inputs