Pakistan

Reko Diq deal: SC to conduct daily hearings from Feb 11

If contract renewed, Pakistan to incur colossal losses, apex court told.

Express January 14, 2011

ISLAMABAD:

The Supreme Court sought on Thursday replies from all respondents in the Reko Diq case and decided to conduct a daily hearing, starting from February 11.

Raza Kazim, the counsel for Abdul Haq Baloch, one of the petitioners, submitted a copy of the 101-page agreement reached between the government and the TCC to the three-member bench, headed by Chief Justice Iftikhar Muhammad Chaudhry.

Pakistan is likely to incur huge losses if the government signs the 30-year agreement with the company in February, he informed the bench. The DG Minerals, ministry of petroleum, has already signed the contract in acceptance of the company’s terms and conditions. Members of the federal and provincial governments have yet to sign the agreement.

The new agreement is to be renewed by the government on expiry of the previous contract on February 11. The project manager of TCC informed the court that his company plans to invest another $3.5 million whereas $460 million have already been invested in Reko Diq.

He apprised the court that his company is paying 25 per cent of the net profit to the government of Balochistan. He termed the copy presented to the bench by Kazim a forgery.

The agreement is a renewal of the previous one and in conformity with the mining rules of Balochistan. He said the terms of the agreement are not being kept secret.

Kazim contended that according to the 18th amendment, Balochistan enjoys sole rights over its natural resources, the federation is, therefore, interfering in the matter. He said he has yet to be provided the copy of the federation’s response.

The court has adjourned till January 17.

Published in The Express Tribune, January 14th, 2011.

COMMENTS (40)

Mohammed Maqbool khan | 13 years ago | Reply Dear All i would like to attende you major issue of reko diq deal or its work under our scientist you are batter know we have lot of the main powe resources and and lot of technication may be machinery is not enough but this can we brougt to others countries and issue that how can we solve this problems if our leadership sincer and i request our scientiest have confident and they can prove if govt handed over him no doubt our scientiest is one of the best in the world and they can do work on reko diq with confidently and honestly then why we lost of billion dollar this question

Yaggi Baloch | 13 years ago | Reply No company to invest in country if Tethyan prevented from exploring mines: Economic experts ISLAMABAD: Economic experts have termed the detachment of Tethyan Copper Company from exploring of gold and copper from Recko Diq mineral project as very harmful for country’s economy, adding that no other company will invest in Pakistan in prevailing law and order situation if the company is prevented from exploring the minerals. Reacting over this important issue, the experts said that the economic situation is worst in the country, adding that Federal Board of Revenue clearly said that the budget deficit has reached to 511 billion rupees in current fiscal year. They noted that the foreign investors were avoiding investing in Pakistan due to terrorism and prevailing law and order situation. They said that it would end possibility of further investment in the country if Tethyan, which invested US $ 230 million, was stopped from exploring of gold and copper. There is possibility that Tethyan will move International Court of Justice against Pakistan, which will create problems for the government. The experts said that according to Balochistan Minerals Rules, the investor company has the right to discover the minerals and it also has permission of exploring and noted that some opportunists’ elements do not want development of the province. These elements destroyed the PIA, and Railways like national institutions and now their eyes are on Recko Diq project. They demanded to unearth these elements who wanted to destroy country’s economy.

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Mr Khan | 13 years ago | Reply @Marri Balouch - i think now is the time to think that what the so called sub- nationalists have given to the people of this province. There is no education/ no forward thinking and no development in health sector. All the time asking for independence with blind faith on the Indian/american masters! The biggest problem of balouch peoples are the so called sardars and nawabs who them selves stay in Afghanistan/ britain and USA and keep their uneducated supporters in state of distress but disallowing the devleopment work.

Sana | 13 years ago | Reply @Marri baloch I am constantly watching your comments related to this issue. Come out of your cave, educate your people, develop expertise and then talk about Baluchistan development. The supreme court is looking after this matter so rest assured, resources will not be exploited.These resources will be used for Baluchistan development so stop complaining. Sometimes you complain about Punjabis, sometimes about Pakistan. Makeup your mind. Stop dreaming about Baluchistan independence. Baluchistan is a province of Pakistan and will remain so. Dr. Samar Mubarikmund is a Punjabi who is fighting for this cause. So come out of your prejudice and work for your province. It will ultimately help Pakistan.

marri baloch | 13 years ago | Reply dont touch our nateur resourcesof balochistan ,this resourses are property of baloch nation from senturies ,this shoud bi usd after the freedom of balochistan,

maitre | 13 years ago | Reply Do not renew the contract. Instead cancel and take back the mineral site from these companies and excavate the reserves under the supervision of our own experts.

Mr. Khan | 13 years ago | Reply I agree with the Scientist, if the Government take careful steps these projects should be carried out in Pakistan with Paksitani engineers working on it. We can do it, and we should do it!!

Asim+Ali | 13 years ago | Reply The best doctors, engineers, bankers, pilots, artists, craftsmen, chefs, businessmen, CEOs, farmers all come from Pakistan. We have built the largest dams, cultivated large lands, developed a sophisticated canal system, developed large telecom networks, developed a large media base, acquired and sophisticated nuclear technology, build jets, assemble cars, produced the best sportsmen, leading anchors on television; and to say we cannot develop our own mines? People, this country has produced the best of the best and our best will mine these lands; they will mine, refine and export gold. This is a new beginning. Let us hope and pray that these strategic assets under the nuclear command authority (NCA) provide us with the implementation of the vision

M Bilal | 13 years ago | Reply Yes agreed Pakistan is a corruption riddled country, doesn't have resources as well but can't we do anything to gain better benefits from this deal. If Pakistani authorities are getting just 25% of share, at least the Supreme Court can get us our share doubled. Leaving it all at the discretion of politicians and corrupt bureaucrats will yield us nothing.

Jawwad | 13 years ago | Reply Looking at all the comments posted by some of the mining experts.. I guess that it would be better to let a foreign firm mine the metals. But the thing which I don't like is why are the firms planning to process the raw ore abroad. Why can't they build a refining and processing ability here ?

Irfan | 13 years ago | Reply I really respect Dr Samar that he is taking the step to save Pakistans resources and I am aginst everybody who says that we donot have aboility to take those gold and copper treasures, Yes Dr Samar please keep is up we are with you and we can do that lets change that fate of our country "The Great Pakistan".

Mustafa Chaudhry | 13 years ago | Reply I'm a mining engineer who specializes in strategic long range mine planning. I've worked in some of the most challenging mining environments in the world. Take it from someone who knows mine planning (especially when it comes to open pit mining) that Dr Samar Mubarikmund has no idea what he is talking about. If we deny Barrick the opportunity to mine Reko Diq and set up a mining industry in Pakistan. No other mining company will ever come near Pakistan no matter what our reserves look like. Pakistan is sitting on trillions of dollars worth of untapped resources. Why not use this project as a learning experience and develop talent (operators, mechanics, electricians, etc.) within Pakistan? Even if we somehow got a mining fleet (trucks, shovels, backhoes, dozers, graders etc.) how do we expect a completely green workforce (who probably have never seen a 300-400 ton truck in their lives) to operate them? Who is going to look at the eventual geotech issues that will develop as the pit(s) are mined? Who has the experience to deal with such issues from an operations point of view? Are we going to stop operations and fly a consultant from a place like Arizona to look at some footwall perhaps? Or are we going to continue on and let a few operators get killed? Life is no doubt cheap in Baluchistan these days. Who is going to teach a green crew to operate safely? Do we have the expertise to churn out resource models to plan against? Sigh ... I could keep on going forever as to why this is such a bad move but really ... lets find out the hard way. Isn't that being true as to who we are as a people? Lets see how we can royally bungle it all up and then somehow try and deal with eventual mess that'll follow. No doubt we'll be spend more tax-payers money on foreign consultants to come in and salvage the situation. Keep the bigger picture in mind.

faz | 13 years ago | Reply what u people are talking about, he is a nuclear scientist, and is able to tell wether pak has the capability, i m a metallurgist and i kno we can do this if we ll not start today we ll never start it on our own, if today we ll lose a 160 mil dol no matter we ll get 160 bill dol in future, in general we must support each other and we should try to speak on that matters which we kno well.

snl22 (the mining engineer) | 13 years ago | Reply Regardless of whether Pakistan has the technological expertise to setup a large mining project and administer it profitably, one thing is sure, Pakistan does not have the honesty to run such a project. Another similar project of a smaller size by the name of Sandak gold and copper mine had been initiated using foreign contractors to build it in 1990's. When it came online and Pakistani government took over, it started to make losses after losses despite the gold and copper flowing from it. It had become the world's first loss making gold mine by late 1990's and the budgetary comity had to close it down to stop the losses. Later on it was given to Chinese operators who are running it today paying Pakistan 30% of profits. The moral of this story here is that one should never underestimate the power of corruption in Pakistan. It is a moot question to ponder whether Pakistan can build such a mine technologically while it is almost sure for it to become a loss making entity once built. The other thing is not to over blow it out of proportions. The reserves at Rico Diq which by far is not even the largest copper gold reserves of the world is not worth trillions of dollars. At most it is just a couple of hundred billion dollars using most modern technologies which are economically feasible for extraction the rest are so low grade and dispersed which is not economically feasible for extraction. These reserves can have a very profound effect on Pakistani economy of course. Even if Pakistan extracts the lowest estimate of 100 billion dollars, that means 5 billion dollars for the next 20 years. It can free up Pakistan from begging for aid atleast for the next two decades and if this money is spent wisely for investments then it surely can improve the living standards of Pakistan even beyond these 20 years. But again the corruption is there. The locally developed projects also usually fall behind schedules. One solution is to do what Arabs have done with regard to their oil reserves. Make a law requiring whichever company wants to extract it is bound to do all the jobs with Pakistan required to do nothing while 50% of profits is given to Pakistan. That way Pakistan gets 50% cash without doing anything or investing anything. The other way is how some other countries like Iran and India do business. It is called buy back. A foreign company invests in major parts of the projects while a local consortium helps with smaller parts as well as providing labor and contributing with local technologies. The profit is 50-50 but there are additional rules too. The foreign investor after a set period of time of usually 10-15 years hands over the setup to government after enjoying 50% of profits for all those years and the government having learnt how to run the project by then, takes over and extracts the rest of the reserves. Some times they even put more restrictions in the deal eg. the foreign partner would be made to re-invest 30% of its own share in the country. The third option eg as in China is to develop the mine all by yourself with out any foreign investment. This is the least attractive for Pakistan, since first Pakistan does not have the technologies to setup large mining operations and building metal refinery as well as such a project cost over billions of dollars which Pakistan is going to have a hard time to come up with. Anyways, there are bigger forces at play here. The powerful lobbies will never let Pakistani public to benefit from this as has always been the case. The foreign companies who finance these lobbies will fight hard to give Pakistan the lesser share of profits and would certainly create problems for Pakistan if Pakistan chooses to go alone on this. My guess is Pakistan will succumb and make a deal for perhaps 30% of profits or even lower which as is the story of other similar projects in the country after corruptions in auditing etc will be reduced to less than 10% which will be going to public purse. Out of that 10% which will be allocated to be spent on Pakistani citizens in the form of services again a second round of corruption by service providers will render less than 1% available in the form of basic services such as medicines and equipment for hospitals and desk and black boards for schools. Do not be too excited. Mr Mobarakmund is talking theory. Practically things are completely different on the ground. We are a corrupt nation top to bottom. No amount of gold and jewels will change our way of life.

ajklodhi | 13 years ago | Reply if we can deal with exploration,processing and refinement of uranium then why cant we do with Riko-deq metals that are far easier

Waqqar | 13 years ago | Reply @Usman: do you have any proof that Dr. Mubarak is so called scientiest. He is among the founders of Pak nuclear facilities and have very rich contribution for its success. I agree with Mubarak's claim of mining gold in pak, cuz if pak scientists can mine uranium from DI Khan which has very less compostion in rock as compared to gold then why not this one.

Waqar | 13 years ago | Reply We rely on foreign countries.WHy? There is no reason to hand it over to another country. Pakistani scientists should muster up the courage to do it by their own hands.

Mohammad Ali Siddiqui | 13 years ago | Reply Pakistanis have all the potential to explore their own country but unfortunately Pakistan is governed after the death of Father of the Nation, Quaid-e-Azam Mohammad Ali Jinnah by the corrupt and selfish leaders who have left no stone unturned to damage the interest of the country by leasing out various projects to foreign companies. The day our selfish leaders will leave eating Pakistan, it will emerge as a great country on the world map.

Farooq Khan | 13 years ago | Reply Very rightly asked that what credentials he has about mining, How he has calculated this amount. Another Sacred cow of our country

sohaib | 13 years ago | Reply Even if Dr Samar have the experience or not, his point is very right. Its Pakistan's wealth and it should used by Pakistan and for Pakistan. These multinationals steal world's resources to enrich themselves with connivance of local corrupt leaders. In the Saindak project, as Dr Samar said, all the copper has gone to China and a single went to the local market. Pakistan must utilize its wealth on its own. If we try to learn new skill, like mining, we will build capacity which can also use in the future within the country and outside. From TCC deal, Pakistan is likely to get nothing in exchange for all gold and other precious minerals exported to the parent countries. This is how corporations work and that is why countries like Pakistan do not get out of the debt trap.

Usman | 13 years ago | Reply To all those people complaining that Dr Samar do not have any experience in this field so he should not talk. Please note that you do not have to mine it yourself, you can outsource each phase to a different company and make sure that the processing and value addition is done on Pakistani land. Dr. Samar is right in pointing out that this project can be managed in Pakistan by Pakistani's. If TCC is given the whole contract then they would give royalty only on the extraction of Gold and will do the refining in its own factories overseas. YES PAKISTAN WILL GAIN NOTHING FROM THIS.

Salman | 13 years ago | Reply Any foreigner should not be allowed in Pakistan to exploit our natural resources including TCC. However, we should develop expertise in this technology. Can any one tell a good mining institute in Pakistan? Does Pakistan produce heavy machinery for digging and mining? Can Pakistan build refinery?

Babs | 13 years ago | Reply Our government cannot look beyond the kickbacks it will receive from awarding the said concession. Unfortunately they are uneducated and easy. A few millions suffice, even if they can make billions.

gv | 13 years ago | Reply Why cant' we give it to a local company who can hire local and international expertise to mange the project at least the bulk of the revenues will remain in the country

Muhammad Saleem Usmani | 13 years ago | Reply We can do anything under the sun. Do we have the will? Let's shed the self defeating mentality. He heads the National commission and never claimed that he will do it himself. Let's pull our efforts for once in life. Stop selling this nation for God's sake.

wahid ali | 13 years ago | Reply We should salute Dr. Samar Mubarakmund for his loyal and generous contributions towards the prosperous future of Pakistan. Dr. Samar has pointed out the real wealth which could get the nation out of the financial crises.

M Hussain | 13 years ago | Reply it is not a matter of fact to handle this project to foreigners but the case lies in the situation that government should trust on national scientists and also take in confidence the great scientists working abroad and handle this projects to our own people. This will not only create a good learning opportunity for the people of Pakistan but also it will support the idea of our great scientist i.e Dr. Samar Mubarikmund.

Abbas Khan | 13 years ago | Reply Yes, we can mine, but it will take another hundred years.

ali | 13 years ago | Reply Honorable scientist has credential of concentrating precious uranium from sand and converting it into atom bomb and exploding it to make pakistan impenetrable

JS | 13 years ago | Reply Why cant we behave like a civilised nation looking after its interest for the sake of its people. Invite more experts and other world class companies in this field to give their assesment about each and every aspects of this project. Than select the best solution possible.

FK | 13 years ago | Reply I agree with Arifq, the nuclear scientist does not know the workings of business nor does he have any experiance in the functioning of international commiodity markets. This is destined to be another white elephant just like steels mill. One aspect this people are not looking at is despite who runs it the country will earn valuable foriegn exchange via export of this commodity.

Mohammad | 13 years ago | Reply Before criticizing the scientist blindly, kindly do a bit of research regarding the capabilities of the Pak nuclear labs. Also, please note that Dr. Mubarakmund eloquently explained the process of mining and refining (even at industrial scale), through an interview with one of the TV channels yesterday. Please give credit, where it is due.

Truth_Prevails | 13 years ago | Reply @Arifq Can you substantiate your credentials to question Dr. Mubarak's?

S.N.AHAH | 13 years ago | Reply has pak the resources to explore thes mines

maitre | 13 years ago | Reply Well done Mr. Samar Mubarakmund. We show full support to your efforts and your nationalism.

Usman | 13 years ago | Reply This so-called scientist has no idea what he is talking about. He has no credentials or past history in working with precious and base metals mining. He is just another one of those that spring up everyday in Pakistan who think they know everything! Pakistan will lose the biggest foreign investment opportunity if they try and kick out TCC and this expropriation of the project from the company will hurt Pakistan a long time into the future! If this guy thinks Pakistan can mine this on her own, bring forth the technology and expertise required to back up his statements!

kaslam | 13 years ago | Reply Another example of people who think they know it all

Asif Ali | 13 years ago | Reply salam to dr samar. every one please support dr samar. he took such a nice step our nation is still in sleep we don't know what is happening around our resources have been shifting to abroad and we don't know.

Pakistani born in Europe.... | 13 years ago | Reply Arifq....yeah man, just sell your country out. 2 billion or 160 million who cares right!!!!!

Arifq | 13 years ago | Reply Can the honorable Nuclear scientist substantiate his reasoning and credentials as mining analyst, thankyou.

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