Court: SC sets aside Reko Diq contract with foreign exploration and mining company

ISLAMABAD: The Supreme Court on Monday set aside the Reko Diq gold and copper mine contract with a foreign exploration and mining company by declaring it illegal and against the rules.

A three-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Gulzar Ahmed and Justice Sh. Azmat Saeed announced the verdict earlier reserved in December 21, 2012. The 16page short verdict authored by Chief Justice Iftikhar Muhammad Chaudhry declared the Reko Diq contract as illegal and against the rules.

The court allowed the appeals and the petitions filed under Article 1843 of the Constitution and disposed of the miscellaneous application over the Reko Diq contract. In its short order, the court held that the Chagai Hills Exploration Joint Venture Agreement executed on July 23, 1993 was contrary to the provisions of the Mineral Development Act, 1948, the Mining Concession Rules, 1970, the Contract Act, 1872 and the Transfer of Property Act, 1882 and even it was not valid, thus declared to be illegal, void and non est.

The court ruled that all amendments made to the agreement after its signing were also unlawful and in contradiction with the agreement. The court noted that the amended agreements executed on March 4, 2000, April 28, 2000, April3, 2002 and April 1, 2006, were also illegal and void.

“All these instruments do not confer any right on BHP, MINCOR, TCC, TCCP, Antofagasta or Barrick Gold in respect of the matters covered therein, thus it is further held that EL5 is tantamount to exploration contrary to rules and regulations as the claim of TCCP is based on CHEJVA, which document itself has been held to be non est. Therefore, before exploration it was incumbent upon it to have sought rectification of its legal status”, the court held.

The court noted that in the constitutional petition filed before the Balochistan High Court against the Reko Diq contract, the Balochistan government had opposed the petition, however, when the matter came up before the apex court in 2007 and orders were passed on February 3 and May 25, 2011, wherein certain issues were noted, the Balochistan government supported the stance of the petitioners who also filed additional grounds in light of the changed circumstances.

The court ruled that the civil miscellaneous applications and the petitions filed against the Reko Diq deal under Article 1843 of the Constitution were simultaneously maintainable under the Constitution and the scope of the relief claimed by the petitioners could be enlarged in view of the facts and circumstances of the case. The court held that the TCC no longer had any rights in relation to the Reko Diq agreement.

A number of identical petitions and civil applications were filed in the Supreme Court against the federal and Balochistan governments’ decisions to lease out gold and copper mines at Reko Diq, located in Chagai district of Balochistan to the Tethyan Copper Company TCC — a Canadian and Chilean consortium of Barrick Gold and Antofagasta Minerals. Reko Diq sits over the popular Tethyan copper belt and is known to have the fifth largest deposits of gold and copper in the world.