QUETTA: Balochistan Economic Forum president Sardar Shoukat Popalzai on Sunday expressed reservations over the recently signed agreement on Reko Diq between the Balochistan government and a Canadian company, Barrick Gold Barrick Gold Corporation, saying serious concerns needed to be addressed before implementing the project.
In a statement, he said copper and gold reserves in Reko Diq were considered to be one of the largest in the world and the project was valued at $260 billion.
“More and more voices were now being raised against the compromise solution with the investor and calling for autonomy and mineral rights,” he said while adding that the involvement of locals was the key to the project’s success.
He said neglecting the locals result in mineral-rich areas results in poverty and further leads to conflicts and agitation.
He said the mineral sector in Balochistan has suffered greatly due a myriad of challenged including the law and order situation and political instability.
Corruption and malpractice in awarding contracts, shares in the income beyond royalties and shares of locals in revenue were also the issues that have hampered projects in the past, said Mr Popalzai.
He added that Pakistan had suffered international embarrassment due to the $6billion penalty imposed on the country for in the Reko Diq case.
He further added that in the past, Saindak copper project had suffered greatly due to mismanagement by successive governments and resulted in huge losses to the national exchequer.
“It [Saindak project] was finally developed with the help of a friendly country, while many other mineral projects, like lead and zinc project at Duddar, also faced difficulties in which Irish and Australian companies have made huge investments but abandoned the project due to bureaucratic red tape.”
An iron ore project in Dilband was mishandled by a public sector company, which was awarded the contract despite lacking expertise and past experience, he added.
Mr Popalzai said that in 1993, Balochistan government, through Balochistan Development Authority, signed an agreement for prospecting, exploration and exploitation with Broken Hill Proprietary Minerals (BHPM) of Australia for Reko Diq and for seven years, there was no physical progress on the site.
Pakistan had been embroiled in arbitration since the Supreme Court in 2013 declared null and void the Reko Diq development lease, signed with Barrick Gold and Chilean firm Antofagasta. In 2019, World Bank’s International Centre for Settlement of Investment Disputes (ICSID) had imposed a penalty on Pakistan for unlawful denial of mining.
However, in March, the consortium of Barrick and Antofagasta reached an agreement with the government for the settlement of ICSID’s award. Barrick decided to become a 50 per cent partner with the governments of Pakistan and Balochistan and state-owned entities in the project, while the Chilean firm exited the contract in exchange for $900 million by Pakistani shareholders.
Earlier this month, Barrick Gold Corporation President and Chief Executive Officer Mark Bristow said sought a legal cover for the deal saying that he expected Pakistani parliament and the Supreme Court to sanctify the $6 billion out-of-court settlement to pave the way for $7bn investment in the project.
This was the first time that the demand for support from the major state institutions — parliament and the judiciary — had come to light for a commercial agreement on settlement of the arbitration award against Pakistan.
Published in Dawn, August 8th, 2022