Reko Diq — repeating history

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Reko Diq — repeating history

Post  Bolan on Mon Jul 04, 2011 7:24 pm

The recent surge in news about the federal government’s negotiations with representatives of two major companies on exploration and development of Reko Diq gold and copper mine in the Chaghai district of Balochistan has once again highlighted the issue of provincial autonomy and inexpedient decision making that is dictated more by vested interests than public interest. According to news reports, the government is quietly handling talks with Chilean and Canadian companies, which hold the shares of Tethyan Copper and Gold Company (TCC) already engaged in exploration work in Reko Diq, without consulting the provincial government. It may be remembered that in December 2009, the Balochistan cabinet led by Nawab Aslam Raisani had unanimously decided to scrap the agreement with TCC for exploration and not to lease out the land to the company. However, the Balochistan chief minister now seems inclined to settle for 25 percent share of the profits while the balance 75 percent will be divided equally between the Chilean and Canadian companies holding the shares of TCC. This is not the first instance that unwise decisions have deprived the locals of the fruits of their wealth.
This paper has highlighted this issue through its news, editorials and columns time and again. It would be interesting to review the sorry history of Balochistan, which is richest in mineral wealth, but the most underdeveloped province of Pakistan. The exploitation of Balochistan started with the discovery of huge natural gas reserves at Sui. Discovered in 1953, Balochistan was offered a minimal share of the revenues generated from the gas only in 1980, and even those were not paid for many years. While this resource was used to fuel industrial development and kitchens in the rest of the country since the 1960s, areas of Quetta got natural gas in 1986. The more recent example of squandering of Balochistan’s mineral wealth is the Saindak gold and copper project. The feasibility report of the project showed huge deposits and extremely good export potential. However, the project was mothballed for many years because the federal government failed to issue a bank guarantee of Rs 1.5 billion for working capital. The project was revived in 2002 on unfavourable terms allocating only two percent of the estimated profits for Balochistan. The Metallurgical Construction Company (MCC) of China made a deal to pay a fixed amount to the federal and Balochistan governments for the lease period of 10 years, which did not cover the rise in price of gold and copper in world markets since the contract was made. Also, MCC did not induct and train local talent to run the mines, as was originally planned. China’s rapacity for minerals due to its rapid industrial growth is well known and it appears that the Chinese would extract all the minerals there are in Saindak before the expiry of the 10 years lease, because mining at Saindak is not being monitored. The sidelining of the Baloch in the development of Gwadar Port is another episode of the same saga of neglect and non-participation of locals. Alarmingly, the environmental impact of these projects has not been assessed, which is slated to be huge, given the astronomical amounts of water used in mining and toxic waste released into the environment.

Reko Diq has four times more potential than Saindak and it would be a folly to allow foreign companies to extract most profits from the mineral wealth of Balochistan, which should be used to facilitate its economic and infrastructure development, skills training of the locals and creating employment for them. *

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