Govt plans private sector EPZ in Balochistan

Decides to declare Siah Dik copper mining project as export processing zone

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ISLAMABAD:

The government has decided to execute the Siah Dik copper mining project in Balochistan as a private sector Export Processing Zone (EPZ), being awarded to China Metallurgical Group Corporation (CMGC), which is already working on the Saindak gold and copper project.

The Siah Dik project will be developed in the same district, where the Reko Diq copper and gold mining project is underway.

The private EPZ will be dedicated to mining and processing copper concentrate in Chagai district. It will be run by a joint venture named Kohesultan Mining Company (Pvt) Limited (KMCL) comprising Tongsin Resources Limited – a subsidiary of Chinese state-owned enterprise CMGC, and Siakoh Mineral Development (Pvt) Limited, a local company.

Share distribution between Tongsin Resources and Siakoh Mineral Development will be 80% and 20%, respectively. KMCL has been registered with the Securities and Exchange Commission of Pakistan (SECP).

In a recent meeting, the Industries and Production Division briefed the Economic Coordination Committee (ECC) of the cabinet that the Export Processing Zone Authority (EPZA) had been established under the EPZA Ordinance, 1980. Its primary objectives include planning, developing and managing EPZs across Pakistan.

A recently inserted Section 9A into the ordinance permits the establishment of EPZs by the private sector under the Private and Public Participated Export Processing Zones Rules, 2023.

The main aim of creating private-sector EPZs is to accelerate industrialisation and enhance exports by fostering an investor-friendly environment. This initiative is expected to generate employment opportunities, bring advanced technologies and attract foreign direct investment.

EPZA had recommended seeking approval of the federal government for establishing the private sector Siah Dik Export Processing Zone in Balochistan.

The Industries and Production Division told the ECC that KMCL had been registered with the SECP on August 28, 2021. Three lease deeds were executed between the government of Balochistan and KMCL on November 8, 2021 and April 14, 2022.

KMCL submitted request for setting up a private EPZ on February 26, 2024, responding to which the EPZA board approved the proposal during its 133rd meeting held on May 2, 2024.

Under Section 2(k), read with Section 9A of the EPZA Ordinance and Rule 11, the federal government is authorised to notify the private EPZs. The coordinates for the proposed Siah Dik Export Processing Zone, as per the three lease deeds (ML-Copper 47, ML-Copper 48 and ML-Copper 325), covers a total area of approximately 295.97 acres.

The Industries and Production Division proposed that mineral leases over 1,622.97 acres, 996.31 acres and 1,676.07 acres near Siah Koh, Chagai district be declared Siah Dik EPZ, a single-entity private EPZ under Section 9A, read with Section 2(s) of the ordinance.

During discussions, the Ministry of Industries said that consultations with stakeholders had been completed and observations of the Petroleum Division had been addressed. While a downstream copper facility will not be available in the proposed zone, the project is expected to boost economic activity in the region.

It was highlighted that, as per terms of the agreement, the project would be completed within three years. In the event of a breach of the agreement, the investor would face legal action, including the possible termination of EPZ status.

The ECC reviewed a summary submitted by the Industries and Production Division titled "Establishment of Siah Dik Copper Project, Balochistan as a Private EPZ", and approved the proposal.