Cracks appear in ruling coalition over Reko Diq

Published December 14, 2022
Prime Minister Shehbaz Sharif presides over a cabinet meeting in Islamabad on Monday. — PID
Prime Minister Shehbaz Sharif presides over a cabinet meeting in Islamabad on Monday. — PID

ISLAMABAD: Amid fragile political situation in the country, some cracks appeared for the first time in the ruling coalition on Tuesday when two allied parties boycotted the federal cabinet meeting over a controversial bill regarding revival of the Reko Diq copper and gold mine project in Balochistan.

Sources privy to the cabinet meeting, presided over by Prime Minister Shehbaz Sharif, told Dawn that two of the allies — Jamiat Ulema-i-Islam (JUI-F) and Balochistan National Party-Mengal (BNP-Mengal) — boycotted that meeting to register their protest, but later joined it.

Sensing the gravity of the situation, the PM formed a cabinet committee to remove grievances of JUI-F and BNP-M and held out an assurance that an amendment bill would soon be tabled in the parliament after consulting the two allies.

The annoyed parties were of the opinion that the recently passed Reko Diq related bill — the Foreign Investment (Promotion and Protection) Bill, 2022, in the Senate, was against the rights of the people of Balochistan and that both parties had not been taken on board during preparation of the bill.

JUI-F, BNP-Mengal boycott cabinet meeting

After the cabinet meeting, both JUI-F and BNP-M held their separate meetings in which they discussed the option of leaving the alliance if their demands were not met.

However, Information Minister Marriyum Aurangzeb, in a post-cabinet meeting statement, said the cabinet had formed a committee to resol­­ve grievances of the annoyed parties. “The cabinet committee will talk to leaders of the allied parties, take them into confidence and remove their reservations. An amendment bill will soon be tabled in the parliament after consultation,” she added.

She said the cabinet had approved the Reko Diq project funding plan and a final deal of the project with two international firms, which would be signed on Thursday.

The cabinet also approved a regulatory framework for reconstitution of the Reko Diq and state-owned enterprises.

The meeting was apprised that the Supreme Court on Dec 9 had declared an agreement signed between the Pakistan government and two international firms — Antofagasta PLC and Barrick Gold Corporation — in March for the revival of the long-stalled Reko Diq mining project as “legal” and “transparent”.

The Senate on Monday passed the Foreign Investment (Promotion and Protection) Bill, 2022 — paving the way for the reconstitution of a Reko Diq mining project.

In a Dawn TV show, PML-N leader Mian Javed Latif said the reservations of JU-F and BNP-M were justified and that the government would remove them within next two days. However, he was confident that the annoyed parties would not depart the coalition, as some amendments were being made to the bill.

Mr Latif said that not only the two parties but all four provinces had some reservations on the bill regarding 18th Constitution amendment and the issue would be resolved soon.

The original agreement for the Reko Diq mining project was signed in 2006, and it set aside a share of 37.5 per cent to Canada’s Barrick Gold and Chile’s Antofagasta each while the Balochistan government received a 25 per cent stake.

The two international firms were part of the consortium Tethyan Copper company and had found vast gold and copper deposits at Reko Diq in Balochistan.

But the hugely lucrative open-pit mine project came to a standstill in 2011 after the local government refused to renew Tethyan Copper’s lease, and in 2013 Supreme Court declared it invalid.

In 2019, the World Bank’s arbitration tribunal committee imposed a penalty on Pakistan for unlawful denial of mining.

In March, the federal and Balo­ch­istan governments reached an agreement with two firms — Antofagasta PLC and Barrick Gold Corporation — on a framework to reconstitute the Reko Diq project that allowed Antofagasta to make an exit.

The reconstituted project, which will excavate gold and copper reserves in Balochistan, saved Pakistan from an $11 billion penalty in the Reko Diq case.

Under the new agreement, Barrick decided to become a 50 per cent partner with the governments of Pakistan and Balochistan and three state-owned entities in the project, while the Chilean firm exited the contract in exchange for $900 million paid by Pakistani shareholders.

Balochistan government holds a 25pc stake in the project under the new pact and other 25pc shareholding is controlled equally (8.33pc) by three state-owned enterprises.

Published in Dawn, December 14th, 2022

Opinion

Editorial

Time for dialogue
Updated 24 Jun, 2024

Time for dialogue

If the PML-N and PTI remain mired in mutual acrimony, an ever-widening gap will continue to allow non-political forces to assert themselves.
Property taxes
24 Jun, 2024

Property taxes

ACCORDING to reports in the local media, along with the higher taxes imposed on real estate in the recent budget, ...
Fierce heat
24 Jun, 2024

Fierce heat

CLIMATE change is unfolding as predicted by experts: savage heat, melting glaciers, extreme rainfall, drought, ...
China’s concerns
23 Jun, 2024

China’s concerns

Pakistan has no option but to neutralise militant threat to Chinese projects, as well as address its business and political stability concerns.
War drums
23 Jun, 2024

War drums

If it is foolish enough to launch another war in Lebanon, Tel Aviv will be solely responsible for setting the Middle East on fire.
Balochistan budget
23 Jun, 2024

Balochistan budget

BALOCHISTAN’S Rs955.6bn budget for the fiscal year 2024-25 makes many pledges to the poor citizens of Pakistan’s...