REKO DIQ, which means sandy mountains in the Balochi language, is the world’s fifth largest deposits of copper and gold ore in a belt stretching from Romania through Turkey, Iran, Pakistan and Afghanistan all the way to Papua New Guinea.
The original agreement — Chagai Hills exploration joint venture — was signed between the government of Balochistan and an Australian mining group on July 23, 1993.
This was then sold to Tethyan Copper Co. — a joint venture between Chile’s Antofagasta and Canadian Barrick Gold, the world’s largest mining companies. Reko Diq was now jointly owned by Antofagasta with 37.5 per cent, Barrick Gold with 37.5pc, and Balochistan with 25pc stake.
The TCC spent $220 million for five years on exploration and was planning to invest a total of $3.3 billion. The mine would have produced $60bn worth of copper and gold which would have gone to $120bn over its life-span. The provincial government had to get 25pc net profit of this amount after the operating cost, without any investment, plus the royalty.
Now when the TCC finally found copper, some people were of the view that outsiders were exploiting the province’s natural wealth. Thus they kicked the TCC out of this project.
In 2011, the Balochistan government rejected the TCC’s mining lease application because it was said to be incomplete and the company had violated the agreement.
The company approached the apex court for the redressal of its grievance of cancellation of its mining rights. The court in its 2013 judgment declared that the TCC did not have any rights over Reko Diq under the contract.
Judgment was ostensibly aimed at protecting the country’s natural resources from exploitation by a foreign entity.
It is very important to note that in any technological venture where the country has no or little expertise there is a cost to pay for obtaining or mastering that technology, of which the best example is the pharmaceutical industry in Pakistan.
Till a decade ago, this industry was almost dominated by multinational companies with their patent brands, but with locals coming with knowledge and technology the multinationals have almost vanished.
It would have been prudent to allow the TCC to operate till our locals learnt and developed their skills.
Zafar Hasan Khan
Published in Dawn, July 20th, 2019