THE Economic Coordination Committee has just approved a 15-year lease extension for the Chinese company working on the Saindak Gold and Copper Mine project in Balochistan. The ECC nod raises several questions about the transparency of the process. Even the revised terms of the lease that offer a slightly ‘better deal’ to Pakistan than previously cannot be a substitute for open, international competitive bidding for the project. Moreover, the ECC’s approval infringes Balochistan’s right under the 18th Amendment to take decisions regarding the project and float international tenders to award the lease of the mines producing precious metals, including gold, silver, copper and iron ore, to the highest bidder. This isn’t the first time the province has been ignored by Islamabad on the future of the project. The contract was extended twice in 2012 and 2017 for five years each in complete disregard of constitutional provisions and in spite of a decision taken in 2017 that the Saindak project would be handed over to Balochistan after the expiry of the previous five-year agreement with the Chinese firm later that year.

The contractor has agreed to enhance Pakistan’s share of profits by 3pc to 53pc, and increase rent, royalties and social uplift payments for the province and centre under the renewed contract. But Pakistan remains dependent on the Chinese company’s calculations of profits and payments as we don’t have a mechanism for determining the quantity of metals extracted and moved out of the country, and to verify the exact revenue from the project. Some reports suggest that Saindak’s metal deposits are fast depleting due to over-mining by the contractor in order to maximise its profits. These allegations need to be looked into and an audit conducted of the total quantity of minerals extracted in the last two decades. Moreover, little of the profit made by the lessee — or the federal and provincial government — are invested in the welfare of the people of Chaghi, where Saindak (as well as Reko Diq) is located. That Chaghi, known as the ‘museum of minerals’, remains the country’s most under-developed district despite holding mineral wealth worth trillions beneath its soil speaks volumes for the state’s exploitative ‘development’ policies. Instead of endorsing the ECC’s approval, the government should hand over the project to Balochistan to decide on its future with directions that at least half of the revenues it receives from Saindak are spent on the people of Chaghi.

Published in Dawn, February 11th, 2022