A World Bank arbitration court has imposed a penalty of over five billion dollars on Pakistan for unlawful denial of a mining lease to a company for the Reko Diq project in 2011.
The Tethyan Copper Company had approached the International Centre for Settlement of Investment Disputes in 2012 after the Balochistan government declined its lease request. The international tribunal on Saturday announced in a 700-pages ruling that Pakistan has to pay Tethyan Copper USD 5.8 billion in damages, Samaa News reported.
Pakistan's Supreme Court had terminated the deal in 2013. The mining company said that it had invested over USD 220 million on Reko Diq.
The company is still "willing to strike a deal with Pakistan," Tethyan board chair William Hayes said in a statement. But, added that "It would continue protecting its commercial and legal interests until the dispute was over."
The case between the Pakist government and the international company continued for at least seven years.
The penalty came as a major blow to the cash-strapped economy of Pakistan that has received billions in financial aid packages from international orgsations such as the International Monetary Fund (IMF) and a few friendly countries, including China, Saudi Arabia and the United Arab Emirates (UAE) during the current fiscal year.
Prime Minister Imran Khan on Sunday issued orders for the formation of a commission to investigate and fix responsibility for the massive loss borne by Pakistan in the Reko Diq case.
The Attorney General's office issued a press release stating that Islamabad together with the Balochistan government was analysing the legal and financial effects of the court orders and that the government was considering all aspects of the matter and will decide the future course with a consultation.
The press release said Pakistan had the right to use all legal options available under the international laws. The government also welcomed Tethyan Copper Company's (TCC) offer to resolve the issue through negotiations. It also welcomed all the international investors to Pakistan.
It added that Pakistan was further interested in the development of Reko Diq resources and as a responsible state saw the international agreements and protection of legal rights and interests with seriousness.
Reko Diq mine is famed for its vast gold and copper reserves and is believed to have the world's fifth largest gold deposit.
The small town of Reko Diq in Chagai district in Balochistan is located in a desert area, 70 kilometres north-west of Naukundi, close to the border with Iran and Afghstan.
( With inputs from ANI )