The document summarizes a dispute between the governments of Pakistan and Balochistan, and mining companies over exploration rights in the Reko Diq area. It discusses a 1993 agreement between Balochistan and BHP allowing exploration, as well as a later feasibility study by Tethyan Copper Company (TCC). Key points of conflict included TCC's rejected mining lease application and lawsuits filed in international arbitration. An ICSID tribunal ultimately ruled Pakistan must pay TCC $11.5 billion in damages.

2. INVOLVING PARTIES
GOVERNMENT OF PAKISTAN GOVERNMENT OF BALOCHISTAN BHP COMPANY
Treaty Type: Bilateral Investment Treaties
Date Of Signature: 29th July, 1993

3. BHP
MINCOR
TCC
Antofagasta
Barrick of
Gold

4. INTRODUCTION
• Chagai Hills Exploration Joint Venture agreement, signed between the Balochistan Government and
Broken Hill Properties Minerals (BHPM) in 1993.
• The agreement provided for exploration on an area in District, Chagai, measuring 3,347,226 acres (13,546
Square kilometers)
• Promises to build and operate a world class copper-gold open-pit mine at Reko Diq in the northwest
district Chagai of Balochistan province.
• Agreement envisaged exploration by BHPM within a period of 6 years at its own cost over the Exploration
Area, followed by preparation of a Feasibility Study to undertake mining of the proven mineral resource.
• According to the JVA, BHPM would have earned 75% interest on satisfactory completion of Exploration
Program while BDA had 25% share in the JV, both in cost and profit.

5. FEASIBILITY REPORT IMPORTANT POINTS
• Project need the Capital investment of about US$ 3.3 billion to US$ 5.0 billion .
• In a feasibility report submitted to the Balochistan government, TCC projected a turnover of over $60 billion
for the gold and copper project over a span of 56 years.
• The mine has estimated reserves of 11.65 million tons of copper and 21.18 million ounces of gold.
• It is the Worlds fifth largest Gold reserves.
• After BHP had failed to make significant progress on the project. In 2000, BHP sold it share to the TCC
• TCC is the Joint Venture of Barrick Gold and Antofagasta.
• TCC completed an extensive and detailed bankable feasibility study establishing the basis for mine
development at Reko Diq during August 2010 and submitted a mining lease application in February 2011.
• Feasibility study also included the Environmental and Social impact assessment (ESIA) report.

6. CONTRACT DETAILS
• The consortium wanted two new agreements, the share holder’s agreement and mining
agreement.
• The first agreement was to be signed between government of Balochistan and the BHP.
• The second agreement involved government of Balochistan, government of Pakistan and the
BHP.
• On papers scrutinized, it was revealed that so many things were done without approval at
appropriate level.

7. CAUSES OF CONFLICTION
• After submission of feasibility report in 2011 TCC also submitted application for the grant of
mining lease over an area of 99.70 sq. km2, the TCC did not fulfil the condition of rule 47 and 48
of BMR 2002. mining lease was rejected on 15th November 2011 by the licensing authority
(GOB).
• TCC went into an appeal before the secretary mines and minerals under rule 70 of BMR 2002,
after hearing same was also rejected by the Appellate authority. after rejection of mining lease
application.
• This case has also rejected by Supreme Court 4 Bench Judges.
• TCC went in an appeal into ICSID (International Court of Settlement of Investment
Disputes) and ICC (International Court of Crime).

8. CASE OF TETHYAN COPPER V. PAKISTAN
• TETHYAN COPPER COMPANY PTY LIMITED V. ISLAMIC REPUBLIC OF PAKISTAN
(ICSID CASE NO. ARB/12/1)

9. OBJECTIONS ON CONTRACT
• Who allowed extension beyond initial 6 years, and why?
• Who allowed the company transfer of its share to successor or assign, without prior approval of
the second party? if it was not provided in the mother agreement, then why it was not blocked?
• Who allowed the landing rights to the company?
• Why arbitration was kept in ICC and ICSID? where law of the land operates, all legal issues are
to be sorted out under those laws. here by accepting this clause, hands were tied.

10. CONTRACT FAILURE CAUSES IN PAKISTAN
• Despite a recent rise in the number of international arbitration cases, Pakistan has been unable to
develop its own specialized pool of experts in arbitration and contract writing.
• The selection of arbitration counsels and law firms at home and abroad is made on the basis of
relationships, friendships and pick and choose at exorbitant cost, rather than on the basis of a
transparent process.
• In most cases, the government agrees to the demands of external investors in long-term deals and
cherry-picking in dealing with jurisdictions of the local legal system to bypass contractual
enforcement.

11. FINAL VERDICT BY ICSID
•Pakistan has to pay US $11.5 billion to TCC.

12. Thank YOU