The infamous Reko Diq is back in the limelight again as Pakistan seeks to shift an international tribunals penalty for not issuing leasing license to the company Tethyan Copper Corp., a 50-50 joint venture of Barrick Gold Corp. of Australia and Antofagasta PLC of Chile, a truly enormous penalty of $5.8 billion was applied. The penalty which has been called by economists as a ‘mugging’ of the impoverished Southeast Asian state comes out to be a whole 2% of its total GDP.
The state has appealed the penalty in the World Bank’s International Center for Settlement of Investment Disputes and is leading with the argument that the penalty would jeopardize both its fight against Coronavirus and its economy. The strong penalty was applied because Pakistan violated its investment treaty with Australia in the Reko Diq mining project. A former finance secretary of Balochistan had this to say on the case, “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.”