Daily Times

It’s our good fortune that huge deposits of copper and gold exist in the depths of Reko Diq, the rugged land of Balochistan which is the most underdeveloped province in the country. But it’s our bad luck that we are unable to make use of the hidden wealth touted to value at $260 billion. Now the government made a mining deal with a Canadian company Barrick Gold Corporation. Wasn’t the initial contract signed with the Australian mining company Tethyan Copper Company Ltd (TCC) and its partner Antofagast, a Chilean company?

Last December chief minister Abdul Qudoos Bizenjo organised an in-camera briefing for the provincial lawmakers to take them into confidence on the Reko Diq project. But the PTI chief in Balochistan, Yar Mohammad Rind, was unsatisfied with the arrangement. Calling it a fiasco, he demanded to set up a truth commission on the new Reko Diq deal before the mining project could proceed ahead. Isn’t it the same old story of mismanagement, accusations and counter-accusations and, of course, personal interests and corruption?

On the face of it, the news that the country hit it big by way of the Reko Diq mining deal and that we would soon roll in billions caused great excitement among the people. The people of underdeveloped Balochistan had a good reason to hope for a better future. To calculate the worth of mineral deposits as elicited, even the calculators would freeze when converting $260 billion into the devalued rupee.

In case of default, Pakistan’s assets abroad would be seized.

But wait. No sooner was the deal signed that critics emerged on the scene as usual. Leading among them this time was Sardar Shoukat Popalzai, president of the Balochistan Economic Forum. He asserted that the people of Balochistan would not get their due share according to the present arrangement. Hence their poverty will not be alleviated and their sense of deprivation would continue.

The Reko Diq story is not new. In 1993, an Australian mining company Tethyan Copper Company Ltd and its joint venture with Antofagast, a Chilean company, signed a mining and exploration contract with the Balochistan government. The contract was named Chaghi Hills Exploration Joint Venture Agreement for the exploration of gold and copper at Reko Diq mines. Reportedly, the Australian company was to import the machinery required for the exploration and would have 75 per cent interest in the project while the Balochistan government would have a 25 per cent share, with a two per cent payment as royalty.

The participation of a Chilean company in the mining business was somewhat surprising. Most of us had only heard about Augusto Pinochet, the tyrannical dictator who ruthlessly ruled Chile for seventeen long years and rubbed his opponents to no end. More surprising was that if Chile could possess the mining technology, why not nuclear Pakistan? Even neighbouring India developed its own modern equipment to explore and excavate its mines to dig out metals and minerals.

However, in 2013, the Supreme Court under the lordship of the then CJP Iftikhar Muhammad Chaudhry cancelled the Reko Diq mining deal for the convenient reason of lack of transparency. With due apology to his lordship, his decision influenced by his self-styled judicial activism stinks as it landed Pakistan in the most precarious situation. By then, the Australian company claimed to have invested $250 million in the import of equipment and machinery to carry out the exploration and excavation process according to the agreement. The mining company approached the World Bank’s International Centre for Settlement of Investment Disputes against Pakistan for cancelling the mining agreement.

The ICSID slapped a nearly $6 billion arbitration award for abrogating the mining contract with the Australian company and its partner in the venture. In case of default, Pakistan’s assets abroad would be seized. Indeed, a most unsavoury situation developed for the country. Instead of hoping to earn billions out of the Reko Diq mines, the country was threatened to pay fines amounting to billions of dollars. Fortunately, the government managed to renegotiate the terms and conditions of the deal with Tethyan Copper Company and its joint venture partner on more favourable terms.

According to the renegotiated agreement, TCC and its Chilean partner company will have 25 per cent stakes each totalling 50 per cent. The remaining 50 per cent will be equally shared by the government of Balochistan and the federal government. Moreover, the foreign joint venture companies will also invest $ 10 billion in the project. The situation appears too good to be true. At a time like this, one only questions: Haven’t we been there before?

The writer is a Lahore-based columnist and can be reached at pinecity @gmail.com