Pakistan is in talks with Tethyan Copper to settle a $5.8 billion dispute around the Reko Diq copper project, Reuters reported while quoting two senior Pakistani officials.
Tethyan Copper is a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold.
Last year, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to reimburse damages of $5.84 billion to Tethyan Copper for blocking Tethyan from developing the asset as the joint venture had already spent more than $220 million on the project.
“We have been engaged in negotiations with parties involved in the Reko Diq dispute,” Reuters quoted an official who is part of the negotiating team.
Another official was quoted as saying that the parties have been in talks for an extended period since Tethyan last year expressed willingness to explore a negotiated settlement.
Law360, a legal news service, reported this week that Tethyan had been given the go-ahead by ICSID to collect half of the arbitration award.
Having to pay out the award would wipe out nearly half of Pakistan’s foreign exchange reserves as the country contends with the pandemic-driven economic crisis.
Located in Balochistan, Reko Diq is among the world’s biggest untapped copper and gold deposits. The development of the asset has been stalled for nearly a decade by the long-running dispute.