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Call for joint Pakistan and Chilean copper project

Steel News - Published on Thu, 03 Jun 2010

The Nation reported that Pakistan Ambassador to Chile is making efforts to save USD 5 billion Reko Diq Copper Mine Project between Government of Balochistan and Tethyan Copper Company while strongly opposing to award the said project to the Chinese company MCC that is already working in Sandak Project.

As per report, Mr Burhanul Islam Pakistani Ambassador to Chile influenced the Federal Government by recommending taking advantage of the Chilean and Canadian JV investment, represented by Tethyan Copper Company. He was of the view that it was not a good idea to entertain Chinese company MCC for the Reko Diq Copper Mine Project that had already been offered to TCC with all concomitant responsibility, investment and legal claims.

Mr Burhanul Islam further suggested the government that the Chinese, if aspiring for a project, could be offered a new mining site. However, if the government of Pakistan considered the possibility of developing the copper mining industry itself, it would be a milestone in its indigenous copper development industry.

Informed sources confirmed that Pakistan was pursuing with a Chilean mining company and its Canadian partner concerning development of copper mining at Reko Diq in Balochistan. According to the JV agreement of the project, TCC holds 75% of the project while Balochistan government holds 25% share without any obligation to contribute towards the cost of exploration till the end of the feasibility study.

Moreover, sources disclosed that the total investment in Reko Diq project was expected to be about USD 5 billion over a period of 5 years. TCC was planning a mega project in the Phase I involving an investment of USD 1 billion to USD 3 billion to produce 72,000 tonnes of copper concentrate annually. Even on full commissioning. The annual export would go up to 400,000 tonnes copper concentrate with optimum capital investment. It is also pertinent to mention here that after joint venture agreement, the deadlock in the negotiating is on the issue of fulfilling 25% obligation in the project by Balochistan government as entailed in the joint venture agreement.

However, Tethyan Copper Company had presented a counter proposal Net Profit Interest under which 25% share of the profit on copper sales would be payable to Balochistan government after 8 years of commissioning the project on recovery of capital investment. At present, Balochistan government has not taken any position on the proposal. This has led to deadlock.

(Sourced from www.nation.com.pk)

Posted By : admin on Thu, 03 Jun 2010
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