Tethyan Copper, a joint venture of London-listed copper miner Antofagasta Plc and Canada's Barrick Gold Corp , has filed a notice of dispute with Pakistan's Baluchistan province over its Reko Diq mine.
Tethyan said it filed the notice with the provincial regulator after the region refused to meet its executives or extend a deadline for it to respond to objections that officials had raised over a mining lease being sought for the Reko Diq copper-gold project.
Reko Diq -- only the second significant project in the mineral-rich region and potentially a source of much needed inward investment -- holds an estimated 5.9 billion tonnes of mineral resources, with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams a tonne.
It is my feeling that there is a degree of confusion, Tethyan Chief Executive Tim Livesey told Reuters. I am very hopeful we will meet ... and I hope we can resolve (the dispute).
The two sides now have 120 days to meet and reach an agreement. Failing that, Tethyan said it would move to seek a resolution through international arbitration. International courts cannot force the attribution of the license by the local government, but Tethyan could seek compensation for cash invested and loss of future earnings.
The joint venture partners spent $200 million in 2006 buying the exploration license from rival BHP Billiton . Construction has been projected to cost some $3.3 billion, but that is expected to climb given rising costs faced by the mining industry, particularly in remote locations like Baluchistan.