After more than a decade of wrangling, the FTSE-100 miner Antofagasta looks set to exit its contentious copper and mining project in Pakistan, with plans to clear $900 million from selling its 50 per cent stake.
The miner, which is based in Chile, has struck a deal with Toronto-based partner Barrick Gold and the Pakistan government to end its involvement in the Reko Diq project in the southwest of the country. It has been the scene of a long-running dispute after Pakistan suspended the companies’ licence to develop the mine in 2011. A legal row ensued with the case resulting in the World Bank arbitration court slapping an $11 billion penalty on Pakistan.
Under the terms of the deal, that penalty and other liabilities will be waived, with Barrick pressing on with the project, retaining a 50 per cent stake. It will be the project’s operator, being granted a mining lease, exploration licence and surface rights. Antofagasta is selling its holding to local state-backed interests, evenly split between Pakistan’s federal government and the province of Balochistan, home of the mine.
The Barrick-Antofagasta joint venture discovered the vast copper and gold deposits more than a decade ago at the foot of an extinct volcano in the Balochistan region on Pakistan’s borders with Iran and Afghanistan.
Antofagasta said that it would receive $900 million for its stake “if definitive agreements are executed and the conditions to closing are satisfied”.
