Copper, gold export cargoes: ECC clears path for PQA-PIBT dispute resolution
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has reportedly approved two types of arbitration for the dispute resolution between Port Qasim Authority (PQA) and Pakistan International Bulk Terminal (PIBT) on export cargoes of copper, gold commodities including minerals, metals and other natural earth commodities, sources in Ministry of Maritime Affairs (MoMA) told Business Recorder.
PQA is a statutory authority established under PQA Act, 1973 and falls within the definition of ‘procuring agency’ under rule 2(j) of the PPRA Ordinance 2002; as such Rules framed thereunder are applicable to it. The ‘public procurement’ under section 2(1) of PPRA Ordinance, 2002 stipulates that “public procurement” means acquisition of goods, services, or construction of any works financed wholly or partly out of the Public Fund, unless excluded otherwise by the Federal Government.
Sources said the grant of concession to M/s PIBT to establish and operate a Terminal at Port Qasim to handle coal, clinker and cement was made through competitive bidding, and amounts to ‘public procurement’; consequently, PQA also complied with relevant Public Procurement Rules for the same.
The ECC approved the establishment of Coal & Clinker/Cement Terminal on BOT basis at Port Qasim without GoP Funding/Guarantee by M/s Pakistan international Container terminal (ICT) (Pvt) Ltd on October 15, 2010. The addition of commodities like copper-gold including minerals, metals and other natural earth commodities at the PIBT was through amending existing IA that requires competitive bidding process, since it involves commercial transaction between procuring agency and private party, which has to be subject to PPRA Rules.
Reko Diq Mining Project is one of the largest undeveloped copper-gold projects in the world. Reko Diq is owned 50percent by Barrick, 25percent by three federal SOES, 25percent by the Government of Balochistan of which 15percent is on a fully funded basis and 10percent is on a free carried basis. The Project is designated as a qualified investment under the Foreign Investment (Promotion & Protection) Act, 2022.
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The project is of immense national importance, as it is expected to involve Pakistan’s largest FDI, which would result in significant economic and social benefits to Pakistan and Balochistan.
Reko Dig Mining Company (RDMC) intended to export copper gold including minerals, metals and other natural earth commodities through Pakistan International Bulk Terminal (PIBT) Port Qasim, Karachi in the short term due to non-availability of required infrastructure at Gwadar Port.
In view of the direction of the SIFC that PPRA may grant exemption to PQA from competitive bidding for the addition of commodities by amending the existing IA, Ministry of Energy (Petroleum Division) requested Ministry of Maritime Affairs for an exemption from PPRA. PQA, accordingly, requested for exemption from competitive bidding under rule 12 & 20 of the PPR, 2004 under section 21 of the PPRA Ordinance, 2002 to enable PQA & PIBT to export (on a non-exclusive basis) copper-gold commodities including minerals, metals and other natural earth commodities from the PIBT.
The request of PQA was forwarded to PPRA for consideration and grant of requisite exemption. Cabinet Division submitted recommendations of the PPRA Board to the Cabinet for approval. The Cabinet allowed exemption from applicability of rules 12 and 20 of PPR, 2004 under section 21 of the PPRA Ordinance 2002 to PQA to decide terms of engagement with PIBT to the extent of export (on non-exclusive basis) of copper-gold commodities including minerals, metals and other natural earth commodities (“Cargo”) subject to the stipulation that the procuring agency shall ensure protection of government interest including in the matter of revenues, due diligence of the process and upholding of fundamental principles of procurement such as transparency, fairness, accountability and value for money vide Cabinet Division dated May 20, 2025 and PPRA letter of May 21, 2025.
In order to decide terms of engagement with PIBT ensuring protection of government interest, upholding the principles of procurement such as transparency, fairness, accountability and value for money, PQA started negotiations with PIBT (in association with RDMC). In this regard, PIBT submitted Technical and Financial Proposals to PQA for construction of ‘Additional Terminal Facilities’ at their Terminal to handle, store and export Cargo. As a result of the negotiations, a draft Supplemental Implementation Agreement (‘SIA’) containing terms and conditions has been developed by PQA and PIBT. A Side Letter in respect of SIA giving PQA’s consent to PIBT to sub-lease, assign and transfer Additional Terminal Facilities to Reko Diq Mining Company and providing cure rights/step-in rights to the extent of said Facilities to RDMC in the event of PIBT’s default has also been prepared by PQA and RDMC.
However, only sticking point between PQA and PIBT/RDMC in SIA and Side Letter is about ‘Dispute Resolution’ mechanism (under Article 16.2 & 16.3 of draft SIA & Clause 4(e) of Side letter). PQA strongly maintains that dispute resolution mechanism via arbitration should be under Pakistani law at Karachi as per existing Implementation Agreement (I.A), since both Parties to I.A and SIA are local parties. PIBT/RDMC contend that it should be as per London Court of International Arbitration Rules at London, UK. The relevant clauses stipulating PQA and PIBT/RDMC versions may be perused in the SIA & Side Letter. The PQA Board approved draft SIA and Side Letter, subject to approval from the Ministry of Maritime Affairs and the Cabinet vide Board Resolution No. 23/2025 of September 18, 2025.
The SIA, Side Letter in respect of SIA was forwarded to Ministry of Law & Justice for vetting. Ministry of Law & Justice has stated that the draft of Supplemental Implementation Agreement (SIA) and Side Letter approved by the PQA Board has been examined and vetted from a legal point of view.
The Summary was submitted to Cabinet Division for approval of draft SIA, Side Letter and decision on dispute resolution mechanism. Cabinet Division returned the summary with the observations that views from Attorney General may be obtained on the sticking point between PQA and PIBT/RDMC about dispute resolution mechanism. The advice of the Attorney General of Pakistan was sought.
The summary along with advice of the Attorney General for Pakistan was placed before the ECC in its meeting held on November 7, 2025 for approval of SIA/Side Letter and decision on sticking point. The ECC directed that clear advice from the Attorney General may be obtained and to resubmit the summary for consideration and approval. The Attorney General for Pakistan was again requested for clear advice in the matter. That office accordingly rendered advice. PQA has amended the SIA and Side Letter in the light of advice of the Attorney General for Pakistan.
On November 18, 2205, MoMA proposed to the ECC to approve the revised draft SIA and Side Letter in respect of SIA which accorded approval.
Copyright Business Recorder, 2025