Pakistan Mining Updates

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What is the Reko Diq dispute?

TCC is a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile. The Reko Diq district in the southwest of Balochistan is famed for its mineral wealth, including gold and copper.

The ICSID tribunal had taken up the dispute between Pakistan and the TCC after the latter claimed $8.5bn when the mining authority of Balochistan rejected its application for a multi-million dollar mining lease in the province in 2011.

According to details available on Tethyan’s website, the Reko Diq Mining Project was to build and operate a world class copper-gold open-pit mine at a cost of about $3.3 billion. The company says its 1998 agreement with the Balochistan government entitled it to the mining lease, subject only to routine government requirements.

The project stalled in November 2011 after the application was rejected. Pakistani officials say the mining lease was terminated by the government because it was secured in a non-transparent manner.

By then, the company had invested $220 million in Reko Diq. The mining company sought help from the World Bank arbitration tribunal in 2012, and it ruled against Pakistan in 2017, rejecting an earlier decision by the Supreme Court.

The tribunal then opted to use a formula for calculating damages for the cancelled lease based on the assumed profits Tethyan might have earned from the mine over 56 years. In July 2019, the tribunal slapped a $5.97 billion award against Pakistan for denying the mining lease to the company.

The fine, including the damages award and interest, is equal to about two per cent of Pakistan’s GDP.

Immediately thereafter, the TCC had commenced proceedings for enforcement of the award. In November 2019, Pakistan had challenged the award and initiated proceedings seeking its annulment.

In March 2020, the AGP office announced that it had filed a request on November 8, 2019, for the annulment of the award rendered by the ICSID on July 12, 2019.

Alongside the plea for annulment, Pakistan had also requested a provisional stay on the enforcement of the award issued against the country on November 18, 2019.

Pakistan was granted the provisional stay upon initiating annulment proceedings after which a hearing to confirm the stay order took place over ‘video link’ in April last year. On September 16, 2020, the tribunal finally ruled in favour of Pakistan, confirming the stay on the enforcement of the award.

However, on November 20, 2020, the company moved a separate case in the BVI High Court for the enforcement of the award which included attachment of the assets belonging to Pakistan International Airlines Investment Ltd, a final decision on which came out today in Pakistan's favour.

The ICSID is still considering Pakistan’s appeal against the penalty over its decision to cancel the Reko Diq mining lease for the TTC and a final hearing will take place in 2021.

 

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Mohmand Marble City gets special economic zone status


Bureau Report
June 30, 2021

The chief minister directed the relevant officials to accelerate the shifting of marble factories from Warsak Road, Malagori and Shabqadar to the Mohmand Marble City. — APP



PESHAWAR: The board of directors of the Khyber Pakhtunkhwa Special Economic Zone Authority (SEZA) on Tuesday approved the status of the special economic zone for the Mohmand Marble City.

According to an official statement issued here, the board, which met with Chief Minister Mahmood Khan in the chair, also ordered the acquisition of an additional land of 2,000 acres and prepare feasibility study for the purpose.

The chief minister directed the relevant officials to accelerate the shifting of marble factories from Warsak Road, Malagori and Shabqadar to the Mohmand Marble City and ensure the early provision of facilities to investors in all economic zones of the province.

He issued directives for ensuring that investors start physical work within six months after the allotment of plots in economic zones and if they fail to do so, the allotment of plots is cancelled.

The meeting also approved standard operating procedures for SEZA for submission to the federal Board of Investment in Islamabad for final consent.

According to the statement, the meeting was informed that the federal BoI has approved the zone regulations for Rashakai SEZ, which have been made part of the already-signed development agreement.
Also, the special purpose vehicle of Rashakai Special Economic Zone has been registered with Security Exchange Commission of Pakistan.

The meeting was also briefed about the development on the Mohmand Economic Zone and was informed that 106 plots of different categories out of a total of 290 had already been allotted in the zone and that 132KV grid station and water supply network was available.

The board also discussed the proposal regarding the status of sole enterprise SEZ for the manufacturing of cement and allied building materials in Dera Ismail Khan and accorded approval for its submission to the federal Board of Investment for consent.

Mr Mahmood directed the authorities concerned to ensure visible progress on all economic zones projects and said it was among the top priorities of the government to provide job opportunities to the people by promoting industrial activities in the province.

He also ordered the leasing out of plots in Rashakai Special Economic Zone due to a restriction on their sale.


Published in Dawn, June 30th, 2021

 

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Coalmines
Khost, (Harnai -- Shahrag), , Balochistan

Coalmines
Khost, (Harnai -- Shahrag), , Balochistan

 

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PPL to set up lead, zinc processing plant in Balochistan

• Pakistan Petroleum Limited says lease is valid for a term of thirty years

BR Web Desk
13 Dec 2021


Pakistan Petroleum Limited (PPL) on Monday announced that the Balochistan government has granted the company a large-scale mining lease for lead and zinc in the Khuzdar district.

The Pakistani state-owned petroleum company shared the development in a notification to the Pakistan Stock Exchange (PSX).

“We are pleased to disclose that the company has been granted a large scale mining lease for lead and zinc, in district Khuzdar, by the Government of Balochistan and in this regard a large scale mining lease deed has been executed, for large scale mining and establishment of a lead-zinc processing plant in district Khuzdar, Balochistan over an area covering 30 Sq.km (7413.16 acres),” read the company’s notification.

PPL informed that the lease is valid for a term of thirty years and shall be operated by Bolan Mining Enterprises. It will be a 50:50 joint venture between PPL and the Balochistan government.

“The estimated reserves of barite, lead and zinc are 69 million tonne as per bankable feasibility by a renowned German consultant, over a portion of the leased area,” PPL said.

The project would entail open pit mining with an ore beneficiation/process plant. PPL said that positive cashflows are expected from the third year while the estimated project life is 32 years.

As per the company’s latest financials, PPL sales revenue during the first quarter 2021-22 ending on September 30, 2021 stood at Rs43.154 million as compared to Rs 39,226 million in the corresponding period last year, showing an increase of Rs3,928 million.

The increase in sales revenue was led by rise in positive variance on account of price (including change in exchange rate) amounting to Rs7,152 million.

Meanwhile, the profit after Tax of the company stood at Rs16,991 million in the first quarter, up 18% as compared to Rs14,351 million in the same period last year.

 

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The government has revised the RekoDiq agreement.

1. $6 billion fine will be waived off (No fine will be paid).
2. Pakistan will get 50% of the profits instead of the previously negotiated 25%.

 

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ISLAMABAD: The government on Wednesday approved extended agreement with Saindak Copper-Gold Project with existing Chinese contractors for another 15 years.

SAINDAK: The ECC also approved a summary of the Petroleum Division for extension of the lease contract between Saindak Metals Ltd (SML) and Metallurgical Construction Corporation (MCC) of China for Saindak Copper-Gold Project for another 15 years i.e. until Nov 1, 2037. The ECC also recommended a review of the financial aspect of the project annually by the professional expert agencies.

SML is a 100pc public sector entity of the federal government responsible for managing affairs of Saindak Copper-Gold project in District Chagai, Balochistan. The project was developed for local ore exploration, mining and processing to blister copper. The centre invested about Rs30bn in the project over a long period of time since late Z. A. Bhutto’s tenure and later declared an Export Processing Zone (EPZ) up till Oct 31, 2022.

The Chinese state-owned MCC has been running the project on lease since November 2001. The Musharraf administration extended the contract for 10 years with effect from Oct 1, 2002 on publicly unavailable mutually agreed terms. The contract was extended twice in 2012 and 2017 for five years each that now expires on Oct 31, 2022.

The Petroleum Division constituted another committee represented by ministries of finance, law & justice, petroleum, FBR, the provincial government, SML and ISI to negotiate the terms & conditions of the contract extension with MCC for the development of Eastern Ore Body.

Published in Dawn, February 10th, 2022

 

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Balochistan Chief Minister Mir Abdul Qudoos Bizenjo, while defending a recently signed agreement on the Reko Diq copper and gold mining project with a Canadian company, has disclosed that a Saudi Arabian firm would set up a refinery in Gwadar to assess the number of minerals extracted from the site.
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Govt to fast-track pace of work on CPEC, Riko Diq projects: PM Shehbaz​

May 9, 2022

Prime Minister Shehbaz Sharif has said that the government is diligently working on the execution of CPEC and Reko Diq projects, reported 24NewsHD TV channel.

The premier stated this while talking to a delegation of Council of Pakistan Newspapers Editors (CPNE) in Lahore on Sunday. He reiterated his government’s resolve to religiously follow the CPEC and Reko Diq projects till their completion.

He said as far as our foreign policy was concerned, the government wanted to establish relations with all countries including brotherly Muslim states based on respect and mutual interests.

He expressed his resolve that the government wanted free and transparent elections in the country stressing the need to introduce electoral reforms.

The premier also informed the CPNE delegation that the government did not have any intention to restrict freedom of press. He assured the editors that journalists would be defended against all the anti-press laws including PECA Ordinance.

He told the delegation that his government had already entrusted the task to review the draconian PECA Ordinance to its law ministry.

He also appreciated the role of CPNE for the evolution of press freedom and development of democracy and democratic institutions in the country.

Shehbaz vowed to work with the CPNE for the promotion of journalistic responsibilities and security of journalists in the country

On power generation, he vowed that his government would ensure production of electricity and its transmission to consumers in an effective way.

He lamented that the previous government had put unbearable burden of foreign debts on poor people of Pakistan and made essential commodities out of the reach of poor people. He said his government was taking steps to ameliorate the lot of the downtrodden segment of society.

He called upon the nation to show solidarity so that we could be able to fix the tattered economy.

The meeting was attended by Information Minister Marriyum Aurangzeb, Secretary Information Shaheera Shahi, and Principal Information Officer Mubashir Hassan.

The CPNE delegation comprised of its President Kazim Khan, Senior Vice President Ayaz Khan, Punjab Vice President Arshad Ahmad Arif, Secretary General Amir Mehmood and other CPNE office-bearers.

 

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G-B govt to organise gemstones, minerals exhibition to attract investment​

A two-day exhibition is being held in Islamabad to showcase the gemstones

SHABBIR MIR
July 27, 2022

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GILGIT: The Gilgit-Baltistan (G-B) government has planned a ‘gemstones and minerals’ exhibition in Islamabad to attract investment in the mountainous region known as a 'treasure trove of jewels'.

The two-day exhibition starting on Wednesday in Centaurus will have stalls of gemstones from G-B and Khyber Pakhtunkhwa (K-P).

“It’s a hidden treasure and I invite all people to come to the exhibition to benefit from it,” said chief secretary G-B Mohyddin Wani on Tuesday.

He said the exhibition is going to offer dealers an opportunity to form market linkages that will ultimately benefit the people and the region.

According to estimates, there are over 60 different types of precious and semi-precious stones in G-B, with more than 14,000 people involved in artisanal mining. G-B is considered a ‘treasure trove of gemstones' with ruby, emerald, topaz, aquamarine, sapphire, and tourmaline found in abundance in the region.

Talking to the media, Secretary mines and Minerals Sajjad Haider said G-B had great potential for precious stones but the region is lacking in scientific approach when it comes to exploration and extraction of gemstones.

“We are however trying our level best to adopt a scientific approach in the extraction of the precious stones,” he said, adding the government is trying to showcase the potential of this sector to bring in investment from across the globe for which ‘we have favourable laws in place’.

According to the exhibition management, the G-B governor and chief minister will also participate in the exhibition on the first and second day respectively.

The first gemstone mine in Gilgit was reportedly discovered in 1951. Since then, locals have been engaged in exploration, extraction, and exploitation activities unofficially.

According to experts, Pakistan has not been able to benefit from its natural resources due to a lack of skills, technology, and knowledge in processing mining material and then taking it to national and international markets.

 

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The lawyer representing the Balochistan government on Wednesday told the Supreme Court that the province would receive $32 billion in 47 years from the Reqo Dik project.

Salahuuddin Ahmed further told a five-judge larger bench, headed by Chief Justice of Pakistan (CJP) Umar Ata Bandial -- hearing a presidential reference on the project -- that 25% of the proceeds gained from the gold mine project belonged to the provincial government.

Of this 25% share, 15% would be held by a holding and offshore company of Balochistan, he added.

Salahuuddin further told the court that the Balochistan government would receive 25% capital, 5% in royalty as well as facilities of corporate social responsibility and jobs.

CJP Bandial inquired when the project would be completed.

To this, the lawyer replied that 2.5 years would be spent on preparing the feasibility studies of the project.

Work on the Reko Diq project would be kicked off in the next five years after that, he added..

 

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Barrick Gold Corporation had completed the reconstitution of the Reko Diq project, having received a favorable opinion from the Supreme Court of Pakistan and the required legislation having been passed into law.

One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50% by Barrick, 25% by three federal state-owned enterprises, 15% by the Province of Balochistan on a fully funded basis, and 10% by the Province of Balochistan on a free carried basis.

Barrick president and chief executive Mark Bristow said the completion of the legal processes was a key step in progressing the development of Reko Diq into a world-class, long-life mine which would substantially expand the company’s strategically significant copper portfolio and benefit its Pakistani stakeholders for generations to come.

“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for the first production,” Bristow said.

“With its unique combination of large scale, low strip, and a good grade, Reko Diq is expected to have a life of at least 40 years. We envisage a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate. We expect it to be constructed in two phases with a combined process capacity of 80 million tonnes per annum.”

Reko Diq will be a major contributor to Pakistan’s economy which is expected to have a transformative impact on the underdeveloped Balochistan province where, in addition to the economic benefits it will generate, the mine will also create jobs, promote the growth of a regional economy and invest in development programs.

The province’s interest in the mine will be fully funded, which means that Balochistan will reap the dividends, royalties and other benefits of its 25% shareholding without having to contribute financially to its construction and operation.

“Reko Diq’s ownership structure is a further manifestation of Barrick’s commitment to partnership with its host countries and communities and to sharing the value our operations create fairly with all our stakeholders,” Bristow said.

“We’re making sure that Balochistan and its people will see these benefits quickly. Starting early next year, Barrick will implement a range of social development programs prioritizing the improvement of healthcare, education, vocational training, food security, and the provision of potable water. Our investment in these is expected to amount to around $70 million over the feasibility and construction period. In addition, Reko Diq will advance royalties to the government of Balochistan of up to $50 million until commercial production starts.”

During peak construction, the project is expected to employ 7,500 people and once in production, it will create around 4,000 long-term jobs. As elsewhere in the group, Barrick prioritizes the employment of local people and host country nationals.

Bristow said Barrick already had the industry's best gold assets and the addition of Reko Diq would promote its copper portfolio into the world-class league, accelerating the company towards its goal of creating the world's most valued gold and copper mining business.

 

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KPK Mineral Map.....

 

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Marble Industries ...

 

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Coal mining
Sor Range Coal mines
East of Quetta, Spin-Karez Lake, far right ... Balochistan.