Tethyan Halts $3.4 billion mine work as Pakistan rejects lease: Bloomberg report

London: Tethyan Copper Co., a venture between Antofagasta Plc (ANTO) and Barrick Gold Corp. (ABX) to build a $3.4 billion Pakistan copper and gold mine, mothballed operations and will fire 150 workers after its mining lease was rejected.

The company filed arbitration against government of Balochistan province, who refused mining lease, and federal government of Pakistan in Washington & Paris, Tim Livesey, chief executive officer of Tethyan, said Wednesday in a telephone interview with Bloomberg wire service. The company is seeking damages of about $500 million, including $214 million of expenses until the end of feasibility study in August last year, he said.

“We aren’t packing up and leaving the country,” Livesey said. “We are going to mothball the exploration camp and we have a voluntary redundancy program at the moment and majority of the workers accepted that very openly.” About 150 jobs are affected, he said.

Bloomberg report said Balochistan government on Nov. 16 refused Tethyan’s application to mine at Reko Diq, a rocky desert location in far southwest Pakistan. The government in September asked the company to explain 10 issues, including why Tethyan hadn’t submitted plans to build a smelter in the area. While Tethyan has proposed exporting copper ore concentrate from its mining operations, Balochistan wants a copper smelter built locally. A call to Balochistan Mines & Minerals Department in regular working hours wasn’t answered, report said.

“We can see no realistic reason why the license should be rejected,” Livesey said. “We haven’t been able to get to meet them to discuss the rejection to better understand it. Until that happens we are pretty much in dark as to what real reason is.”

Tethyan filed arbitration at International Centre for Settlement of Investment Disputes in Washington and at International Chamber of Commerce in Paris, Livesey said. “It’s our hope and desire still to meet with the government and regulators to find a solution to all this,” he added.

Leave a Reply