Pakistan is blessed with natural resources which include many minerals like coal, gold, copper, bauxite, mineral salt, chromite, iron ore, etc. other than this, a variety of precious and semi-precious minerals like ruby, topaz, and emerald are also mined here. Balochistan, which has borders with Iran and Afghanistan, has an abundance of natural resources. One of the largest underdeveloped copper and gold project Reko Diq in Balochistan, has been under a lot of legal pressure since 2011. It has been resumed after the settlement, which is good news.
What is Reko Diq?
One of the largest copper and gold mines in the world is in Chaghi District, Balochistan. “It is part of the Tethyan Magmatic Arc, extending through central and southeast Europe (Hungary, Romania, Bulgaria, Greece) Turkey, Iran, and Pakistan through the Himalayan region into Myanmar, Malaysia, Indonesia, and Papua New Guinea.” They are remnants of one of many eroded volcanic centers in the Chagai volcanic chain of mountains, which runs in an east-west line across Balochistan between the Quetta-Taftan Line railway and the border with Afghanistan.
It contains copper-gold ore deposits of varying grades. It has an estimated reserve of 5.9 billion tonnes of ore grading 0.41% copper and gold reserves amounting to 41.5 million oz.
Tethyan Copper company
In the Consortium Tethyan Copper company, both Canadian gold firm Barrick and Chile’s Antofagasta Minerals control 37.5% of the Reko Diq project. In 2011, the local government refused to renew the lease due to which the project came to a standstill. In 2013, the supreme court had declared it invalid.
The government has been active in getting relief for the project by escaping the penalty imposed. It has been in talk with the Tethyan Copper Company (TCC) which is a consortium between the Canadian-based mining company Barrick Gold and Chile’s Antofagasta to work specifically on the Reko Diq project to settle. The AGP office, especially International Disputes Unit Head Additional Attorney General Ahmed Irfan Aslam, mainly negotiated the Reko Diq deal.
An agreement was signed between the federal government and Barrick Gold under Chief Executive Dr. Mark Bristow. As per the new terms, Barrick will own 50%, the Pakistan federal government enterprises 25%, and the Balochistan government 25%.
Job opportunities created
Finance Minister Shaukat Tarin said, “The agreement has nullified the award of around $11 billion on us and secondly, Barrick and its partners will invest $10 billion. It will benefit Pakistan and Balochistan for the next 100 years.”
Prime Minister Imran Khan said, “I congratulate the nation & people of Balochistan on successful agreement with Barrick Gold for development of Reko Diq mine after 10 years of legal battles and negotiations. The project might be the largest gold & copper mine in the world. It will liberate us from crippling debt & usher in a new era of development & prosperity. The penalty of approximately $11 bn is offset, $10 bn will be invested in Balochistan creating 8,000 new jobs.”
Legal expert Osama Malik said this was the only solution and the best deal for the Balochistan government. He said, “There were no further appeals available for the Pakistani side. The country also didn’t have the resources to pay the exorbitant damages, one of the highest ever granted by the World Bank’s arbitration forum.”
Such projects will help Pakistan attract foreign investors to invest in such ventures exploring the underdeveloped areas in Balochistan.