Business

SC asked to look into Reko Diq deal

Senior metallurgist calls for setting up smelters, refineries in Balochistan

Usman Hanif December 03, 2022

According to a new agreement, the undeveloped copper-gold deposits will be owned 50% by Barrick, 25% by Balochistan province and 25% by major Pakistani state-owned enterprises. PHOTO: FILE

KARACHI:

A senior metallurgist has appealed to the Supreme Court to direct the government to issue information related to Reko Diq copper and gold project.

He also called for smelters and refineries to be set up in Balochistan and for only finished goods to be allowed for export outside the province.

“Smelters and refineries must be set up in Balochistan and only export of finished goods be allowed,” said Abbas Akberali in a petition to the Supreme Court of Pakistan.

He said that as a citizen of Pakistan, he has the right to know about the details of Reko Diq agreement. He pleaded the Supreme Court to confirm whether the agreement contains a clause that smelters and refineries must be set up in Balochistan and only finished goods be exported out of the province.

However, some questions arise when one discusses the Reko Diq copper and gold mines. The foremost is whether Pakistan has the technology to extract the ore and then refine it.

In addition, the mining job is done in various stages and every stage requires a different variety of technical expertise. Therefore, the entire mining process is not carried out by one company but by many companies, each of whom specialises in one particular stage.

For example, the company which extracts the ore may not be able to refine the raw material. Accordingly, there would be an intermediary company that would refine copper or gold and then it would go to the corporations that produce the finished goods.

The second crucial question is whether there are investors who are willing to take the risk of investing billions of dollars
in Balochistan.

Pakistan Association of Large Steel Producers (PALSP) Secretary General Syed Wajid Bukhari, while talking to The Express Tribune, underlined that these questions are important but only raw material extraction will not prove beneficial to Balochistan. The province is already backward and the locals are in dire need of jobs and gainful employment.

These companies can be required to set up plants to at least add some value to the raw material, if not produce finished goods, he urged.

Akberali pleaded to the Chief Justice that in order to protect the interest of Balochistan and secure economic prosperity of the country, it is necessary to allow only finished goods export out of the country, produced from the extremely precious mineral deposits not only in Balochistan but all over Pakistan, including those from the northern areas of the country.

The original Reko Diq agreement that was signed in 1993 has been at a standstill since 2011. This is because of the rejection of the mining lease application in November 2011 by the Balochistan government on the grounds that smelting and refining should be done in Pakistan, as opposed to the original agreement where smelting and refining was proposed to be done outside the country.

Earlier this year, with an out-of-court settlement of the longstanding dispute, the reconstitution of the project was announced by former finance minister Miftah Ismail and Barrick Gold Corporation President and CEO Mark Bristow.

According to the new agreement, the undeveloped copper-gold deposits will be owned 50% by Barrick, 25% by Balochistan province and 25% by major Pakistani state-owned enterprises (SOEs). As per the agreement, Balochistan will get 25% share in the project and also a 5% royalty.

It remains unclear whether Barrick Gold will set up a refinery in Pakistan or take precious metals out of the country like the Chinese operator did in the Saindak project. Crucially, there must be a cap on excavation, especially if the company is allowed to export the minerals in their raw form.

The fact remains that the Reko Diq natural resource reserves are of great importance and have the potential to change the destiny of the people of Balochistan. The mineral deposits of Balochistan, consisting of extremely precious and semi-precious metals, are worth hundreds of billions of dollars, if not trillions.

Published in The Express Tribune, December 3^rd, 2022.

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COMMENTS (2)

TN | 2 years ago | Reply Beggars cannot be choosers Pay 10 billion award and do whatever otherwise be thankful to received royalty etc. and better proposed shareholding agreement

COL SAIF QURESHI retd | 2 years ago | Reply Saindak experience requires strict application of the law that NO export of raw or finished product to anyone ever. To the extent of the foreign shareholder equivalent amount be allowed to be transferred through bank the balance due to local shareholders to be retained in country If the walk away price penalty is the alternate then this can be done and a deal for this can also be structured This natural resource belongs to the people of Pakistan and they must benefit. It is Allah SWT s gift to the Muslim ummah and an amanat It essential to just fix a price index with a discount for foreign shareholder and pay dollars through bank transfer to them and definitely not allow ANY control over the resource and export of the product. The foreign party as part of infrastructure development must ensure full technology transfer including training to Pakistan to be independent technologically within 3-5 years maximum to run ab initio the entire process of survey exploration extraction refining and storage .. this is a 50 plus year transaction involving 750 to 2 000 billions Bahaut sasta Pakistan has been sold .. economic treachery For over 800 years the natural resources of countries nations have been stolen from Africa North South America Middle East Indian Sub continent Asia China Australia etc by the same mechanism as used in the Saindak and Reqo Deq agreements .. the recent wars in Iraq Syria Afghanistan etc have behind them such economic factors as driving forces .. Strategy is and has been to destroy through local proxies the local peoples sovereignty keep them uneducated and in poverty .. meantime steal the resources and develop foreigner technical expertise etc to retain ownership and control .. For a 1 billion IMF loan Imran and Bajwa gave up the financial sovereignty of Pakistan and planted foreign mercenaries Eg Independent State Bank Governor Finance Minister National Security Advisor CPEC and much more .. This particular treachery started with Ayub Khan and around circa 1970 gathered pace and from the 1980 s TCC etc were the initial implementation arm they ve all just been paid 900 million for their 25 share transfer to OGDCL PPL and GHPL . Question is why Barrick wanted 5 billion penalty to walk away or take 50 ownership of the reserves potential Whole deal stinks of corruption conspiracy and treachery on an unimaginable scale with the so-called independent arbitration playing the their due role too now the local proxies are running around trying to sell Pakistan for personal gains in the national interest ..

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