Chilean copper producer Antofagasta and Canada's Barrick Gold have been denied a mining lease application by Pakistan's Baluchistan province over the Reko Diq copper-gold project.

The Balochistan Mining Committee refused to grant a mining licence to Tethyan Copper Co. for the Reko Diq project because the feasibility study that TCC provided was incomplete, the International Herald Tribune reported. TCC is acting on behalf of Antofagasta and Barrick Gold.

TCC said last month it had filed a "notice of dispute" with the province over Reko Diq, after Balochistan government officials refused to meet the company's executives or extend a deadline for a response to objections raised over the mining lease application.

TCC had hired SNC-Lavalin to conduct a feasibility study over the Reko Diq copper-gold project, which cost around $220 million. The study took four years to be completed. It submitted the feasibility report to the provincial government in August 2010. The mining lease application was made February 2011.

The Supreme Court of Pakistan had questioned the agreements between the Balochistan government and TCC, after which it handed over to the Balochistan government the gold mining license issue. The provincial government's report will be given to the Supreme Court Thursday.

The Reko Diq project is located in Chagai district of Balochistan, an hour's drive from both the Afghanistan and Iran borders. It is projected to contain the fourth largest copper reserves in the world. It holds an estimated 5.9 billion tonnes of mineral resources, with an average copper grade of 0.41 per cent and an average gold grade of 0.22 grams a tonne.

When TCC submitted the report, the Balochistan government was expected to invest 25 per cent in the development phase. It will receive profits commensurate to its portion of investment, plus royalty and taxes. In the completed project, the federal and provincial governments will get 52 per cent of the profits while TCC, 48 per cent.

But the Balochistan government changed its mind and decided to no longer participate in the project in November 2010.

"TCC strongly believes that the Reko Diq project can contribute significantly to the development of a modern mining industry in Baluchistan and will consider its options for further courses of action," Antofagasta said in a statement on Wednesday.

Antofagasta and Barrick Gold spent $200 million in 2006 buying the exploration licence from rival BHP Billiton.