Baluchistan Rich in MineralsReko-Dik Copper-Gold Mines (Pakistan’s Geological Scene)

A treasure beneath the surface of virgin land.

In the recent past Baluchistan, one the largest province of Pakistan has emerged as a flashpoint on the radar of international economic interests across the globe. Everyone in the neighborhood and reckoned powers intended to frustrate arithmetic about the treasures hidden under the barren mountains of Baluchistan.

1

Baluchistan is located at the south-eastern edge of the Iranian Plateau. It strategically bridges the Middle East and Southwest Asia to Central Asia and South Asia, and forms the closest oceanic frontage for the land-locked countries of Central Asia. By the surface area, Baluchistan is pretty larger among the four provinces of Pakistan at 347,190 km, which composes approximately 44% of the total land area of Pakistan with approximately 5.6% populous. The population density is very low due to the mountainous terrain and scarcity of water. Baluchistan was the land of the earliest known farming settlements in the Indus Valley Civilization, the earliest of which was Mehrgarh dated at 6500 BCE. It was sparsely populated by various tribes of Dravidian and Indo-Aryan origin for centuries following the decline of the nearby Harappa-Mohenjo-daro civilization to the east. Aryan invasions led to the eventual demise of the Elamo-Dravidian with the exception of the Brahvi tribes which may have arrived much later.

The Baluch began to arrive from their original homeland in north-west Zagros Mountains, in Syria, Anatolia and Iran, claiming to be an offshoot of the Medes and the Kurds who would mainly populate the western end of the Iranian plateau. Under influence of Islam, many Baluch--like the neighbors the Pashtuns, believed that their origins were Semitic. The Baluch claim that they left their original homeland in far northwestern Zagros Mountains around Aleppo, Syria at some point in the 1st millennium AD and moved to Baluchistan.

Although the mountain areas of Pakistan from the Suleiman heights on the extreme northwestern part of Pakistan to the Koh Hindukash connecting Himalayan Mountains especially has great significant in minerals throughout, yet the part of Baluchistan is more noteworthy. At present Pakistan is producing around 50 minerals, out of which 40% is being exploited in Baluchistan. Chaghi-Raskoh Magmatic Arc is the one that clinch most of the copper and gold stocks in it. Ore, chromites and Marble stone deposits are the additional mineral which has its own significance.

In the beginning of late sixties, Saindak Copper-Gold Deposits were discovered by the Pakistani Metallurgists and with the national (RDC) and international forum (MCC) a group was formed to carry out its initial work about its deposits which later contracted to MCC, a Chinese firm. The work remained in progress after 1978 that later slowed down upon certain disagreement among the parties and Government of Pakistan, yet reportedly MCC (a company responsible for its development and excavation) still working on it. However the magnitude of the deposits was great and as per Geological Survey of Pakistan, reserves are around 400 million tons that include 1.7 million tons Copper and 0.48 g/ton gold as final product. Presently MCC of China, as claimed by GOP, has started production with 20,000 tons of Copper, 1.5 tons of Gold and 2.8 tons of silver per annum. In site-value of contained metal has been measured at US Dollar over 5.5 billion at present price.

While the work was in progress at Saindak in 1978-1979, a seam connected to the Saindak deposits towards its southeastern Magmatic Arc, Reko-Dik was discovered. These deposits were richer in Copper-Gold metal blended with Silver in volume and quality. Reko-Dik deposits have been declared by the national and international metallurgist one of the largest in the world seam with its heavy deposits and less laborious in its quarrying. International reports although silent on its price and quality, yet national metallurgists claim as high as ever reported.

2

However Geological Survey of Pakistan in its report claims it one of the promising deposits discovered by them. Reserves are reportedly over 1.27 billion tons at 0.54% Copper and 0.24 g/ton Gold. (According to international experts around 12.3 million tons of Copper and 20.9 ounces of Gold lie in Reko-Dik). In-site value of contained Metal is measured by GSP as US Dollar 18 billion at present price, yet by independent experts measured it at US Dollar 65 Billion. However the significance is far beyond with reference to its richness in quality and further deep exploration for its volume.

As the mineral wealth could not be exploited in the past due to lack of interest and absence of modern technology in the country, therefore, foreign investors and companies were encouraged to invest in exploiting the treasures of the province. Pakistan has proven reserves of metallic minerals i.e. copper, gold, silver, chromites, iron, lead and zinc, which are still untapped. Same is the case with one of the world’s largest reserves of gold and copper discovered at Reko-Dik in the Chaghi area. The copper-gold deposits at Reko-Dik are believed to be even bigger than those of Sarcheshmeh in Iran and Escondida in Chile. Three Australian mining companies, BHP Billiton, the largest Copper mining company in the world, Tethyan Copper Company (TCC) and Mincor Resources are engaged in the exploration of copper, gold and other base metals in Reko-Dik with an investment of about US$ 152 million. Under the agreement, 75 per cent shares were given to TCC of Australia and 25 per cent to the Baluchistan Development Authority (BDA). An annual production of 200 to 500 million pounds of copper is estimated. Reports emerging from various sources indicate that the US $ 65 Billion natural deposit is sold for US $ 21 Billion to TCC. The TCC states that work on the feasibility study has commenced and the project is expected to be completed in early 2012.

Another version states, that since this is a world class copper/gold porphyry style deposit. The world copper and gold prices have been doubled from the initial estimates. So why Pakistan gives out 75% of her reserves to get 25% back after investing 25% in the project? The provincial government is seeking to get about 80 per cent of the project share.

This is a big question which has arisen in the recent past debate between provincial and federal authorities. The people of Baluchistan feel dispossessed by this unjust Reko-Dik project as the agreement with TCC have not only undermined the economy of the province, but depriving people of Baluchistan worth billions of dollars. Realizing this, the government of Baluchistan has cancelled the agreement with TCC for exploration of copper and gold in the Reko-Dik. Now, the Baluchistan government had handed over affairs of the project to the department of mines and mineral development and acquired the services of eminent nuclear scientist and metallurgist Dr Samar Mubarakmand who would head its board of governors. The proponents of scuttling the project state that the mines will create thousands of high paying jobs and give a massive boost to the local economy. However, this demands revenues generation activity (international funding) to acquire infrastructure associated with the mining industry. Secondly, it also necessitates the provision of local expertise to explore and develop deposits for export. Nevertheless, the termination of the contract with world’s leading gold and copper mining firm could mar Pakistan’s image as an investment destination, and the multinational corporations would not invest in a country where deals were cancelled after finalization of the contract.

Provincial government wanted TCC to establish refining and processing facilities in Baluchistan to ensure export of finished copper and gold for better economic returns, but the TCC was not ready to accept this demand and wanted to export copper concentrate. The federal government has sought a detailed report from Baluchistan after some foreign governments raised questions about the provincial

3

government’s decision to terminate a multi-billion-dollar agreement with TTC to develop a copper and gold mine at Reko-Dik.

The strategy to step forward by ending this debate in the larger interest of the Baluchistan and Pakistan based on major economic development projects, need to demonstrate tangible efforts, one of which has been taken by the provincial government to appoint a renowned metallurgist Mr. Mubarakmand. This would probably do away the anomalies in the contractual obligations of Pakistan by re-evaluation of this mega project, its required infra-structure and its development. Secondly, terms of the award should be considered in the line of NFC declaration. Until the focus involves both the factors and the Baluchistan become more involved, the development projects will continue to be set forth as tool of exploitation, so they can play a greater role in the province’s economic development with an only overview strategy run by the federation besides its revenue prospects. It would help boost national economy and to end on a political backlash. Thirdly a high level businessmen forum should be established under the trade sub-committee of the parliament with the collaboration of Federation of Chamber of Commerce & Industries in Pakistan for certain distinguished mega projects with its privacy restrictions to lure the domestic and international investment and feedback before awarding international contracts.

Author. Naeem Baig12th November, 2010.This article has published in Technobiz Magazine in its November, 2010 issue.Monthly ‘Technobiz’ Lahore Pakistan www.technobizmag.biz

4