Barrick, Antofagasta Start Legal Proceedings Against Balochistan

A controversy-mired joint venture between Barrick Gold of Canada and Antofagasta of Chile on Monday filed for international arbitration after the insurgency-torn province of Balochistan refused to give it one of the world’s biggest copper-cum-gold mining license.

“There is a forum in Paris and Washington where the commercial parties go for arbitration,” Samia Ali Shah, spokesperson for Tethyan Copper Company said on phone from Islamabad Wednesday.

Shah refused to talk beyond that about the project.

Tim Livesey, CEO of TCC, said in a statement Tuesday: “We have to initiate arbitral proceedings in order to protect our legal rights, but we remain open to meeting with the Government of Balochistan and its regulatory body to work towards an amicable, negotiated resolution to the dispute.”

The Supreme Court of Pakistan – the country’s highest court – decided in May that the government of Balochistan has the right to decide the licensing issue at Reko Diq.

“Barrick’s lawsuit against the government of Balochistan reveals the coercive nature of transnational finance with respect to developing countries,” said Sakura Saunders, an international activist against gold mining who is now based in Toronto. “Extractive Industries such as gold mining are notorious for leaving host communities impoverished, and Balochistan has the right to deny Barrick’s bid.”

Washington-based Pakistani businessman Muslim Lakhani , who is now a self-styled philanthropist, takes credit for bringing the global gold giants to Balochistan.

Barrick and Antofogasta spent $200 million to buy the exploration license from Lakhani in September 2006, a month after former governor and chief minister of Balochistan Nawab Akbar Bugti was killed on the orders of the then Pakistan coup leader and military ruler Gen. Pervez Musharraf.

“In 1993 BHP Billiton negotiated a joint venture with the Province of Balochistan to explore the Chagai Hills region. From 1994 to 1997 BHP Billiton discovered a major copper deposit at Reko Diq. In year 2000, Tethyan Copper Company was established by Mincor Resources NL after taking over the project from BHP Billiton. In 2006, Antofagasta Minerals plc and Barrick Gold Corporation formed a JV and acquired 100% of Tethyan Copper Company Pty. Limited, an Australian company. Tethyan Australia subsequently transferred all mining rights to its Pakistani subsidiary, Tethyan Copper Company Pakistan,” Tethyan’s Shah wrote to this correspondent in her last email.

Lakhani, who was all praise for Musharraf, arrived in the U.S. as litigation ensued over the Reko Diq project.

Both Musharraf and his hand-picked former premier Shaukat Aziz, a friend of Lakhani, are now wanted in Balochistan for the killing of Nawab Bugti, 79.

Baloch militants fighting for an independent Balochistan had repeatedly warned multinational companies to stay away from their homeland.

Balochistan chief minister Nawab Aslam Raisani wants Barrick and Antofagasta to leave Balochistan as he said his province would be better off running the project on its own.

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