Pakistan is currently looking forward to the reversal of a $5.8 billion penalty imposed for denying lease to an Australian company, claiming that paying it would hinder the country’s handling of the pandemic. Reko Diq Town in Baluchistan’s Chagai District is what the Prime Minister considers as a strategic national asset, despite the fact that mining therein would cost the country very dearly.
The World Bank’s International Centre for Settlement of Investment Disputes is considering Pakistan’s appeal against enforcing the penalty over its cancellation of the Reko Diq mining lease for Tethyan Copper Corp. Meanwhile, the Balochistan government has set up its own company to develop the mine. Arbitrations have initiated to discuss alternative solutions but anything on the deal is unclear. The Reko Diq case is testing the Prime Minister’s ability to keep alive efforts to lure more foreign investors.
Documents suggest that the intention of the penalty was to hold Pakistan accountable for having violated its investment treaty with Australia. Mahfooz Ali Khan who retired as a finance secretary in Balochistan told that the provincial government had agreed to the project hoping to see the mine developed but canceled after it found the rules being violated. He added, ‘I personally feel that both sides should consider an out of court settlement as both sides have solid legal points to continue a legal battle, but it would be better if they renegotiate and resume work on the project.
