Business

Plea for re-negotiating Reko Diq deal

SC requested to order federal and provincial govts to renegotiate Reko Diq mining contract.

Express November 09, 2010

LAHORE: The Supreme Court has been requested via a petition to order the federal and provincial governments to renegotiate the Reko Diq mining contract, set to expire in the last week of this month, in favour of the country instead of the mining firm.

Terming the sale of Reko Diq mines as the last chance for saving the country from “foreign exploiters”, the petitioner said that Pakistan should get an 80 per cent share and the mining company’s share should not exceed 20 per cent.

The request was made in a petition filed in the Lahore registry of the Supreme Court by the Punjab president of the Watan Party, Hashim Shaukat Khan.

Barrister Zafarullah Khan, the petitioner’s counsel, quoted Khan as saying that corporate bosses of two of the largest mining groups in the world have been holding meetings with President Asif Ali Zardari, Prime Minister Yousaf Raza Gilani and the State Bank governor, pressing them to “quietly and quickly” hand over Balochistan’s vast mineral treasure “worth over $3 trillion”.

Over the years, he said, so many “games” have been played with national assets and so many public enterprise units have been sold for “peanuts” that the soundness of national economy has been completely eroded, which has resulted in bankruptcy of the national treasury, starvation and loss of sovereignty.

He said venal politicians and bureaucrats were serving their personal interests by selling the country’s natural wealth at such cheap rates.

Highlighting mismanagement in the project since the process started during the Musharraf regime, he said that when the PPP-led coalition government realised the stakes involved in the project, Balochistan Chief Minister Aslam Raisani and the federal government quickly jumped into the fray to re-negotiate the deal behind closed doors.

Unfortunately, he said, a steering committee, formed about 18 months ago, had no knowledge about the mining deal and no meeting was held regarding the Reko Diq mines. The petitioner requested the court to set aside all non-transparent deals and negotiations in connection with Reko Diq mines with foreign multinational companies.

Published in The Express Tribune, November 9^th, 2010.

COMMENTS (13)

Harris | 13 years ago | Reply Azad Baloch, it was alot of Baloch Nationalist group who STRONGLY oppossed Reko-Diq, i ask you to check your facts please.Also,i am tired of hearing these same claims, Aziz and Musharraf signed the deal with Barrick gold, and Mush killed Bugti, they have nothing to do with Punjab!! Chagiwall, Barrick gold bought the rights from the exploration company and misqouted the finds to Pakistan. The true scale of the find only became apparent when the Israel educated Peter Munk was BOUND to report the ACTUAL FIGURES to the Canadian govt.!!! Also, there is misconception about the investment. Barrick had aske GoP to provide the initial 2.5bn dollars to set up the mine, the balochistan govt. conveyed that it didnt have th funds, so the investors offered to LOAN the money and the govt. would be required to pay INTEREST on the loan from its 25%. This is not the first time Peter Munk's barrick gold has been in hot water due to accusations of EXPLOITATION!

Zain | 13 years ago | Reply Sorry my bad, Being a Pakistani I got emotional and carried away! But in all fairness I am glad that there is awareness amongst the people that things need to change! And these resources need to be utilised!

VIEW MORE COMMENTS

Chagiwall Baloch | 13 years ago | Reply It seems that the direction of the discussion is changing from Reko Diq project towards freedom of Balochistan; I would suggest we should remain on the main topic and discuss the situation of Balochistan on a proper forum. It was never said that the development will take 50 to 70 years (as commentator mentioned above). The 70 year period is the life of mine, and the investors have to wait for his returns so long. Investment of multi billion dollars in mining business take only couple of years to spend that much money, but the returns are in decades. As we have a mineral policy in place and that allows the investors a 100% ownership then there is no point to argue, we must follow the rules which our elected legislatives had made. As it was mentioned above, as a nation we have already lost our credibility in the international community by opposing such investments and denying the facts will lead us nowhere and we’ll be isolated from international community. We must go for it and negotiate the best possible deal for the sake of our nation and country and take this god gifted opportunity to open the doors for new investors.

Zain | 13 years ago | Reply There are no conspiracies here, I highly doubt Balochistan will become a country on it's own. Despite its insurgency and "freedom fighting" the army will never let it happen, firstly because it is strategically important to them and secondly the riches it posseses. Apart from that, what will Balochistan get? with the government it is getting aid package after aid package, like mentioned by one of the commentators it will take 50-70 years for development and, with the jageerdar system more prevalant in Balochistan than anywhere else and the violence happening there, it seems very far fetched that the people of Balochistan will see any money or development from these mines. Granted the entire government is corrupt! But it is time we stop this Balochi, Punjabi, Muhajir, Pakhtun, Balti etc and become Pakistani. Why are we letting the sacrifices of our ancestors go to waste? Why can't we unite? The whole ethnic and sectarian issue is just a plot for us to kill ourselves one by one. We have slowly descended into a state like Iraq without the US Army setting foot on our soil. It is a true shame, I agree with the fact that Balochistan is your richest mineral laden province, with gas and mineral reserves yet it is the most underdeveloped and undermined followed by K.P It is sad that the Baloch people don't get there rights and they are treated poorly. But it's time to wake up from our slumber, no nation can keep pn going like this, unite and overthrow these officials.

Azad Baloch | 13 years ago | Reply This is conspiracy of Punjab and Punjabis they do not want Balochistan development they know very soon Balochistan will be a free country and reko dik is enough to make the Balochistan new Dubai. We do not want help from Panjabeees, and they shutup.

Chagiwall Baloch | 13 years ago | Reply The reason I have wrote some information about the deposits and process of Reko Diq ores was just for better understanding when we talk or write about them. The exploration company is working in the area for last fifteen years and spent hundreds of millions of dollars to find and proof the deposits in Reko Diq, during all this period the Balochistan Development Authority (BDA) was their Joint Venture (JV) partner and they were involve directly in the whole process of exploration. The exploration company was submitting monthly, quarterly and annual reports regularly for the whole activities, and every bit of information was shared with GOB. Currently Mine & Mineral department is looking after the interests of GOB as JV. Talking about unfair/under table deals is again misleading information; there is no deal signed between the parties and nothing is being discussed between them under table. The company has submitted the feasibility report to the government of Balochistan and the joint venture partner (M&Ml department GOB). Every single finding is in the report and nothing is secret from partners. Keep in mind it is a long term project and will remain on ground for several decades (50-70 years) no matter how many governments will change during this period. We can negotiate for better terms and conditions instead of opposing the facts. Being an indigenous of Chagai, I believe this world class mine will not only help us for the development of our district and people, but it’ll play a vital role in the economy of Balochistan and Pakistan. Opposing such fortune will lead us nowhere and we’ll lose credibility in the international community, which I believe is already in the ICU struggling for its last breath.

H. | 13 years ago | Reply The question here Mr. Baloch is not about the quality or purity of the gold/copper. It's about why the deals have been majorly under the table. If it is not all that pure and profitable, why not go through the process transparently?

Chagiwall Baloch | 13 years ago | Reply There is a big misunderstanding about Reko Diq project, it was heard even from very famous scientist of Pakistan that Reko Diq was discovered by Geological Survey of Pakistan and about its tonnages, which are not true; Reko Diq is purely Tethyan’s discovery and have less tonnages of metal than being painted in news papers. As TCC have discovered so they have the first rights to mine what they have discovered in past one and half decades. There are lots of misleading news about the copper and gold deposits of Reko Diq, someone has to understand the porphyry deposit style before any comments. Porphyries of Reko Diq are copper deposits with minor gold they are not gold deposits TANJEEL deposit of Reko Diq is a good example where the ratio of gold is ZERO. Basically the porphyry deposits are low grade and high in tonnages, when we talk or write about the ounces of gold or tonnage of copper we should consider the amount of ore to be processed for a single gram of gold or copper of such deposits. In case of Reko Diq the ratio of gold is 0.3 grams per ton of dirt. Before getting only 03 grams of gold from Reko Diq, one has to process 10,000 tons of dirt with very high technology. Currently, we don’t have the technology and the resources to develop such projects. What happened; when we tried to run the Saindak project? Fail! Why? Because we didn’t have the abilities and resources to manage a running project and we lost it. There are many exploration license issued by the mine & mineral department of Government of Balochistan, where the share of both governments of Pakistan and Balochistan are zero; whereas with TCC Balochistan will get 25% share beside royalties and the federal government will enjoy the fruits of taxes, and all above is without investment of a single penny. End of the day Tethyan will get less than 50% from project after investing multi billion dollars. The Government of Pakistan will get most of the profit, Government of Balochistan is the second and Tethyan is the third. One has to understand the fact and figures not the misleading news.

batholith saltoro | 13 years ago | Reply @Zain It isn't being sold, it is a JV. And they did the exploration work, we didn't. Rekodik isn't the one that bothers me much, it is the other exploration licence given to Lake Resources at Koh-e-Sultan that seems to be much richer and that no one seems to know about that I find more troublesome. Why the fuss about Rekodik and no fuss about Saindak which essentially works on royalty and an annual rent of half a million dollars?

Zain | 13 years ago | Reply In that case, I suggest we keep on sitting on it, until our economy gets better which could take ages, then develop the infrastructure for it another 15 years into the mix and then we should start mining by 2035, sounds like a solid plan. Or we could just sell it for cheap and let them profit off our resources.

batholith saltoro | 13 years ago | Reply By law, the government would get no share in this venture. The Mining Laws of Pakistan specify a particular royalty based on the the pricing of the material where precious metals are concerned and a nominal royalty where copper is concerned. Pakistan does not have the technical or financial capacity to properly develop and run this project.

KM | 13 years ago | Reply Well even the 80:20 formula wouldn't work ... Advisable it is for the government to be a minor share stakeholder of about 49% in the company mining it, so that the equation becomes a WIN WIN for the country as well as the investor. Under the global Venture Funding format, you cannot give a stake lower than 50% for they are the ones spending money and managing it completely, while just giving a stake to the one who possesses the idea or the property.

Zain | 13 years ago | Reply Finally Some steps to be taken! This is the last chance for us, to get out of debt and remove our selves from IMF and American debt and influence. Please wake up, We need to stand up on our two feet!

Replying to X