SC declares void Reko Diq mining lease
Announcing its reserved judgement in the Reko Diq mining lease case, the Supreme Court has declared Chaghai Hills Exploration Joint Venture Agreement (CHEJVA) illegal while observing that its execution was contrary to provisions of various laws of the land.
A three-judge bench headed by Chief Justice Iftikhar Muhammad Chaudhry announced the 16-page short order in response to identical petitions filed against gold and copper mining lease in Reko Diq in Chaghai district of Balochistan. The court has reserved its judgement after completion of arguments of the counsels for all the petitioners and respondents on December 21 last year.
The court declared “not valid” the initial 1993 exploration agreement between the Balochistan government and Australian mining group BHP, since BHP Billiton. It said the agreement ran counter to Pakistan’s mineral development act and mining concession rules, and therefore to transfer it to the Canadian-Chilean consortium is also “illegal, void and non est”.
Announcing the short order, the CJP ruled, “The CHEJVA dated 23.07.1993 is held to have been executed contrary to the provisions of the Mineral Development Act, 1948, the Mining Concession Rules, 1970 framed there under, the Contract Act, 1872, the Transfer of Property Act, 1882, etc, and is even otherwise not valid, therefore, the same is declared to be illegal, void and non est.” The order maintained that the ‘Novation Agreement’ for the Reko Diq mining lease was purportedly made for the purpose of substituting CHEJVA, adding that the government of Balochistan was also made a party to the joint venture.
The order said that it was not permissible under the Balochistan Mining Rules (BMR) 2002 as well as the Rules of Business of the government of Balochistan (GOB), particularly Rule 7 and other rules. “The GoB, in purported exercise of the powers vested in it under the BMR 2002, granted relaxations in violation of Rule 98 ibid as no reason was assigned for the relaxation of the relevant rules”, the order said.
Declaring all the amendments in the CHEJVA illegal, the order read, “The Addendum No. 1 dated 04.03.2000, Option Agreement dated 28.04.2000, Alliance Agreement dated 03.04.2002 and Novation Agreement dated 01.04.2006, which are based upon, and emanate from, CHEJVA are also held to be illegal and void.” It was further noted that all the agreements in result of the addendum in the instant matter do not confer any right on BHP, MINCOR, TCC, TCCP, Antofagasta or Barrick Gold.
The order further said, “EL-5 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”. Experts say mining in Balochistan is dominated by small companies focused primarily on marble and granite, which waste up to 80 percent of mined minerals because of poor blasting techniques.