ICSID rules in favour of Tethyan over Reko Diq project

Stock Market Wire | 21 March 2017

ICSID rules in favour of Tethyan over Reko Diq project

Antofagasta (ANTO) has confirmed that the World Bank’s International Center for Settlement of Investment Disputes (ICSID) has ruled on the arbitration claims that Tethyan Copper (TCC), a joint venture with Barrick Gold, filed against the Islamic Republic of Pakistan regarding the unlawful denial of a mining lease for the Reko Diq project in Pakistan in 2011.

Yesterday’s decision by the ICSID tribunal rejected Pakistan’s final defence against liability and confirmed that Pakistan had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.

The damages phase of proceedings will begin on 22 March and the tribunal will consider submissions from the parties to determine the amount that Pakistan must pay TCC. A ruling on the extent of damages is expected in 2018.

"We are pleased with this decision and now the damages phase of the arbitration can begin. We expect that, at the conclusion of this phase, Tethyan will receive an award entitling it to the fair market value of the project at the time that the mining lease application was denied," said Ivan Arriagada, Antofagasta Chief Executive Officer.

Prior to submission of the mining lease application, Tethyan had completed a feasibility study showing that Reko Diq was one of the world’s largest undeveloped copper and gold deposits with a potential mine life of over 50 years mine life for an estimated initial capital investment of over $3bn.