Mining firms will need to secure the Pakistani military's approval to develop the long-stalled Reko Diq copper-gold project in the Balochistan province, Reuters reported March 12, citing anonymous sources.
The project, which is estimated to host 5.9 billion tons of ore, has been derailed by a multi-billion dollar legal dispute between the Pakistani government and its former owners, Antofagasta PLC and Barrick Gold Corp., who are both seeking claims of up to US$11.5 billion over the denial of a mining lease in 2011.
The Pakistani government is trying to settle the dispute as a World Bank arbitration tribunal is expected to announce this year the damages the two companies are entitled to, the report said, citing Information Minister Fawad Chaudhry.
In addition, the government is reportedly looking for new investors, who will need the blessing of the military. An army-controlled engineering firm, Frontier Works Organization, is interested in joining a consortium for the project, according to the report.
Chaudhry said Pakistan is in talks with potential new investors from the Middle East and Europe. He did not provide further details to the newswire.
China Metallurgical Group Corp., which operates the Saindak copper-gold mine in Balochistan, is reportedly interested in Reko Diq. Norinco International Cooperation Ltd. also inquired about the project a few years ago, sources told Reuters.
Saudi Arabia, which pledged to invest US$2 billion in mineral development projects in Pakistan, also expressed interest, the report said.