Business

Reko Diq mines: Pakistan can earn $2b a year, scientist tells court

If a foreign company is awarded the contract, Pakistan will only get $160 million in royalties.

Qaiser Zulfiqar January 13, 2011

ISLAMABAD: Pakistan will earn $2 billion a year if it were to mine and refine gold and bronze from Reko Diq, whereas if a foreign company is awarded the contract, it will only get $160 million in royalties.

Renowned nuclear scientist Dr Samar Mubarikmund, Chairman of the Board of Governors of Reko Diq and member Planning Commission, said this to the Supreme Court during the course of hearing of a suo motu case.

A three-member bench, headed by Chief Justice Iftikhar Muhammad Chaudhry and comprising Justice Ghulam Rabbani and Justice Khalilur Rehman Ramday, heard the case. Dr Mubarikmund informed the apex court that a foreign company, Tethyan Copper Company (TCC), has been awarded the lease of an area spreading over 400 square kilometres for mining.

It has discovered reserves worth $104 billion to-date in an area of six to seven square kilometres. If it were to exploit all the reserves, they would yield precious metals worth trillions of dollars. He said these facts were taken from the feasibility report on Reko Diq, comprising thousands of pages.

Pakistan has the requisite expertise for extracting and refining gold and bronze from the Reko Diq mines. It is just the 0.02 per cent uranium which is difficult to exploit. TCC wants to export the gold and bronze in liquid form, he added.

At present Balochistan is receiving $160 million whereas it can earn $2 billion if Pakistan were to extract the metals and export them after value addition. He said the money would change the fate of Balochistan.

TCC’s economic advisor, Dr Zubair informed the court that his company, the fifth largest in the world, will invest $3 billion in Pakistan.

Despite the scarcity of investment opportunities in Pakistan, TCC has invested $406 million to-date, the benefits from which have devolved to the people of Balochistan, he said.

“Do not condemn the government; Pakistan is an independent country,” the chief justice remarked.

DG Ministry of Petroleum and Natural Resources, Irshad Ali apprised the court that former premier Shaukat Aziz had constituted a committee comprising five federal secretaries to review the terms and conditions of the agreement with the company on November 3, 2007. The deal was shelved however because the government wanted a five per cent royalty while the company was willing to offer it two per cent.

If the company is to export the metals in liquid form how will the quantity of the gold and bronze extracted be determined along with the cost, questioned Justice Ramday. The quantity of precious metals in Reko Diq is on record. If there is an increase in production, all the parties will get an equal share. The court later adjourned the hearing of the case till today (Thursday).

Published in The Express Tribune January 13^th, 2011.

COMMENTS (17)

Karim Khan | 13 years ago | Reply There is something confusing about this nuclear scientist. I searched him online for some history of his scientific research. He has almost zero research publications and his number of medals are outnumbering his achievements. This is surpirising. What makes him claim Pakistan has expertise in this area. Is he really qualified to give a scientifically verifiable view of the situation. Or is it some political activism agaisnt the goverment? I personally know incompetent academicians who are in charge of projects worth hundreds of millions. And the results are disastrous. If you give such a huge project to incompetent indigenous people (most probably on basis of favoritism), the country will be sent to their hands, though these people will make millions in a short time.

Mir Agha | 13 years ago | Reply Indigenous capability my foot. Get the Chinese and TCC to make good use of these natural resources and use the minimal income to better the people of Balochistan as they have first right over these resources. Instead of trying to scare away investment GOP should work out a fairer deal for the investors, locals, and domestic industry. It's obvious that Pak can't do all alone despite what the respect scientist says. These are (supposedly) one of the largest deposits of copper and gold in the world.

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Ammar | 13 years ago | Reply Whatever, their should have been transparancy in finalizing the deal, but Govenement officials take bribe for their own interest. Steel Mills, OGDCL, Reko Diq, and so many other projects intended to sell at very low price.

Saima Khan | 13 years ago | Reply $2 billion? Is that supposed to be a lot?

M Bilal | 13 years ago | Reply Either supreme court ask the TCC to give Pakistani government not less than 50% as royalty or should ask government to form a team of intellectuals and experts like Mr. Samar Mubarakmand to bring the idea conceived by them of earning 2 Bln $ a year to a reality.

American Lahori | 13 years ago | Reply Pakistan has the technological capability and the human resources to be self sufficient in mining and refining Reko Diq. The difference between the $160 million and the $2 billion is between getting paid a percentage strictly for Ore Extraction and the getting full value by self extraction and then Refining In Pakistan to attain max price for pure metal versus raw ore. The KEY PROCEDURE is the REFINING of the Raw Ore into Pure Metal. The foreigners wish to STEAL the raw ore and refine it overseas to maximize their profits and hide the amount of extraction. Pakistan must keep Reko Diq as a internal project on par with Pakistan's nuclear program. Reko Diq is a National Security Interest of Pakistan.

Shahid H. | 13 years ago | Reply Even though it now appears we should've negotiated a better deal or worked on it ourselves, BUT we must understand that an agreement was signed and that company took the RISK, invested their money and proved the deposit. It is WRONG to now take it away from them. Find other deposits, and let them have it. This is what is FAIR. Don't be greedy. We as a country must stand by our word.

Ahmed Iqbalabadi | 13 years ago | Reply If we had the capital and expertise to do it ourselves, we would have done it long time back!

Omar | 13 years ago | Reply This article is sheer nonsense! Pakistan does not have the technical expertise to make $2 billion from its resources in Baluchistan. I've seen the geological data and there is no way a local company could come even close to doing this. Why try to scare away the scarce foreign investment we do have coming in to the country? Its sad that the media joins in into this farce!

ashfaqueshah | 13 years ago | Reply hmm truth is better than false .Pakistan zindabad

Shuaib | 13 years ago | Reply Hmm well that would be more than enough to satisfy and line the pockets of politicians...more than what recieve as 'aid' from the US right now

parvez | 13 years ago | Reply The reality is that if a foreign company does it we will get something but if we do it ourselves we will be soon asking the tax payer to subsidize it e.g. Steel Mill and PIA. Our incompetence and greed is now legend. The answer is to negotiate better terms with the foreign party. A transparent, open, clean, above board, negotiation in the countries interest.

Naeem Siddiqui,Australia | 13 years ago | Reply @Malik, To get their fair share Balochis need to get education they need to be engineers, technicians and administrators. Being illiterate and slaves of sardars will bring nothing to them. Uprising under the clout of illiteracy and tribal slavery will only benefit tribal sardars not the common balochies. This is corporate era where people are getting paid because of their skills NOT because of ethnic origin. If you are a balochi with tall height, wide chest and blue eyes that’s good for you or may be for your girl friend/wife BUT for an investor what you can do is important.

RizwanTKhan | 13 years ago | Reply National treasure is being blatantly robbed. Our thief politicians wont do nothing so the only hope is the court and the general public of this country which is highly rich in natural resources.

Iftikhar-ur-Rehman | 13 years ago | Reply Whatever deal is made by our Govt. Baluchi people should be given their due share.The mine is Blauchistan so they have the right to get a big share.

Malik | 13 years ago | Reply Either way, what is Baluchi people going to get? Nada.

Ayub Parvaiz , Agra India | 13 years ago | Reply Riko Diq Mines The Pakistan Supreme Court Should Order The Government Not Sell The Country,s Natural Wealth To Tethyan Copper Company At ThrowawayPrices . Pakistan Has The Expertise For Extracting Gold , Copper And Bronze From The Reko Diq Mines .If The Riko Diq Mines Are Exploited By The Pakistani Company Then It Would Yield Precious Metals - Worth Trillions Of Dollars .

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