Reko diq, history, icsid, foreign exchange reserves, FDI, minmetal saindak mine
Pakistan has sought a relieve of International center for settlement dispute after awarded by $5.8 billion in 2019 by ICSID arbitration between Tethyan and Pakistan which eventually favourd Australian company TCC. However, both tcc and government show leniency to have talks for find way to solve dispute in the midst of corona virus that wreck-havoc the country, already struggling in control the spread.
HISTORY
Tehtyan cooper cooperation, Australian mining company, known for extract the gold and Cooper in other countries with joint venture with Chile's company. Pakistan and tethyan signed the agreement in 1998 for lease of reko diq, southwestern Baluchistan, in which tcc extract the gold and Cooper reserves in reko diq with their expertise and machinery. by the end of 2011, Tethyan invested $220 million till the supreme court judgement regarding the fate of reko diq. In the judgement, tethyan license was canceled.
ICSID
thereafter cancellation of license by Pakistan's supreme court tethyan moved to world Bank's International center for settlement dispute in 2012. Icsid awarded Pakistan with $5.8 billions penalty for the damages they had to canceled the license of tethyan. tethyan, originally demand for $12 billion owing to its damages afterwords calculations Inflation and interest rate, investment they had in reko diq to build infrastructure and usage of their machinery.
Foreign Exchange Reserves and FDI
the penalty Pakistan has received for the damages is about 40 percent of foreign exchange reserves of Pakistan, which already depleting and 2 percent of Pakistan's GDP.
Cancellation of foreign investment in country may be worst thing for the economy as we live in globalization where every country needs FDI. having had done this, Pakistan has cut his own hand as multi national companies reluctant to invest in Pakistan such as amazon, apple, Samsung etc. it effects negatively when the country has lost his ability to attract the FDI.
Pakistan's move
Pakistan might have to go with Chinese company minmentals works in saindak, a town in chaghi, near Iran border, to save the multi billion dollar project of reko diq or sit with tethyan and negotiate the talks for the revival of reko diq project which was considered as world's largest gold and Cooper reservoirs.
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