Sunday, February 15, 2015

Reko Diq Pakistan

Reko Diq

Reko Diq is a small town in Chagai District, Balochistan, Pakistan, in a desert area, 70 kilometres north-west of Naukundi, close to Pakistan's border with Iran and Afghanistan. The area is located in Tethyan belt that stretches all the way from Turkey and Iran into Pakistan.

Reko Diq is a remote location in the North-West of Chagai district. Chagai is a sparsely populated western desert province of Balochistan. It is mostly low relief and thinly populated desert. The weather of Chagai ranges from very hot summers of 40-50°C to very cool winters of up to -10°C with less than 40 mm precipitation (winter rain and minor snow). It also exhibits periods of high wind and dust/sand storms which have a demobilizing impact on the local activities and trade. Access to the Chagai district is via the Zahidan - Quetta highway also known as the London Road.

The Reko Diq area is part of the Tethyan Magmatic Arc, extending through central and southeast Europe ( Hungary, Romania, Bulgaria, Greece) Turkey, Iran and Pakistan through the Himalayan region into Myanmar, Malaysia, Indonesia and Papua New Guinea. It contains wealth of large copper-gold ore deposits of varying grades.

The eastern and central sections of the belt are well recognized hosting world class mineralization such as Grasberg, Batu Hijau in Indonesia, Ok Tedi in Papua New Guinea and Sar Cheshmeh in Iran. Whereas in the eastern Europe it host world class porphyry/epithermal cluster of Bor, Majdanpek in Serbia and more recent developments include Skouries and Olympias Greece, and Copler in Turkey.

Reko Diq area is one of many eroded remnant volcanic centers in the Chagai volcanic chain of mountains which runs in an east west line across Balochistan between the Quetta to Taftan railway and the border with Afghanistan. TCC has identified a large low grade copper-gold resource at Reko Diq.

According to the 1998 census the population of Chagai District was 202,562, along with approximately 53,000 Afghan refugees. The population of Chagai District was estimated to be over 250,000 in 2005. Over 50% of the people of the area are Muslims. According to Dr. Samar Mubarakmand (Member Science & Technology, Planning Commission of Pakistan) Geological Survey of Pakistan had discovered the Reko Diq reserves way back in 1978.

Reko Diq, which means sandy peak in Baluchi language, is also the name of an ancient volcano.

Reko Diq, is famous because of its vast Gold and Copper Reserves and its believe to be the world 5th largest gold mine.


 The Gold Mines of Reko Diq.

In 1993 Australian mining giant BHP negotiated the Chagai Hills Exploration Joint Venture Agreement (CHEJVA) with the province of Balochistan to explore the desolate triangular region of Pakistan’s geography that borders Afghanistan and Iran. In  1997 BHP discovered significant copper-gold deposit at the Reko Diq site and in year 2000, Tethyan Copper Company was established by Mincor Resources after taking over the project from BHP. In 2006, Antofagasta PLC  of Chile and Barrick Gold Corporation of Canada  formed a JV and acquired 100% of Tethyan Copper Company Pty. Limited, an Australian company which subsequently transferred all mining rights to its Pakistani subsidiary, Tethyan Copper Company Pakistan.

The antofagasta Group holds a 50% interest in Tethyan Copper Company Limited (“Tethyan”), its joint venture with Barrick Gold Corporation (“Barrick”). Tethyan is seekingto develop the Reko Diq copper-gold deposit in the Chagai Hills District of the province of Balochistan in south-west Pakistan. Tethyan has held a 75% interest in an exploration licence encompassing the Reko Diq deposit, with the Government of Balochistan (the provincial authority) holding the remaining 25% interest, resulting in an effective interest for the Antofagasta group of 37.5%.

The mineral resource at Reko Diq is estimated at 5.9 billion tonnes with an average copper grade of 0.41% and an average gold grade of 0.22 g/tonne. The Group’s 37.5% attributable share of this resource amounts to 2.2 billion tonnes.

Tethyan completed the feasibility study in respect of the project and submitted this to the Government of Balochistan in August 2010. On 15 February 2011, Tethyan submitted an application to the Government of Balochistan in accordance with the Balochistan Mineral Rules for a mining lease. On 15 November 2011, Tethyan was notified by the Government of Balochistan that the Government had rejected its application for a mining lease. Tethyan has commenced two international arbitrations in order to protect its legal rights.

However, TCC has lost its case on 'Interim Measures' both in jurisdiction of the International Chambers of Commerce (ICC) and the International Centre for Settlement of Investment Disputes (ICSID). In 2012, The Supreme Court of Pakistan already declared the Reko Diq agreement void and non est after hearing constituting of identical petitions for Reko Diq mining lease. The Supreme Court of Pakistan stated that the TCC no longer had any rights in relation to the Reko Diq agreement.

In May 2013, Tethyan announced that it has withdrawn its request for 'specific performance / mining license' in both international arbitrations (i.e, ICC & ICSID) and now only seeking claims for monetary damages, including lost profits for the mining operations.

The deposit at Reko Diq is a large low grade copper porphyry, with total mineral resources of 5.9 billion tons of ore with an average copper grade of 0.41% and gold grade of 0.22 g/ton. From this, the economically mineable portion of the deposit has been calculated at 2.2 billion tons, with an average copper grade of 0.53% and gold grade of 0.30 g/ton, with an annual production estimated at 200,000 tons of copper and 250,000 ounces of gold contained in 600,000 tons of concentrate.

According to the extensive technical financial studies undertaken, in order to secure optimal ‘economies of scale’ efficiencies, and lower mining and processing costs, a large scale, state of the art mining and processing unit is required at Reko Diq.

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