LONDON, UK: Antofagasta plc, Barrick Gold Corporation and the Governments of Pakistan and Balochistan have reached settlement in precept on a framework that gives for the reconstitution of the Reko Diq project, and a pathway for the corporate to exit the project.
The project was suspended in 2011 due to a dispute over the legality of its licensing process. Antofagasta has determined to not take part within the reconstituted project because the company’s growth technique is focused on the manufacturing of copper and by-products within the Americas (particularly Chile, Peru, the USA and Canada) and the Reko Diq project doesn’t support this strategy.
The events have agreed to work collectively over the course of this year to finalise and approve definitive agreements. If definitive agreements are executed and the conditions to closing are satisfied:
· the project will be reconstituted under Tethyan Copper Company Pty Limited (“TCC”), a three way partnership held equally by the Company and Barrick, and TCC’s International Centre for the Settlement of Investment Disputes (“ICSID”) award will be resolved;
· a consortium comprising various Pakistani state-owned enterprises will purchase shares in TCC’s subsidiary which will maintain the Project for consideration of roughly US$900 million; and
· proceeds will be distributed to Antofagasta in return for its exit from the TCC holding structure.
If the conditions to closing are satisfied throughout 2022, the Company would expect to obtain these proceeds throughout 2023.
Antofagasta plc notes that, though this settlement in precept is an important step towards its exit from the Reko Diq project and the decision of the ICSID litigation introduced in July 2019, there can be no certainty that definitive agreements will be finalised or approved, or that the conditions to closing will be satisfied.
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