Here's PakTribune on British High Commissioner's comments on the impact of Reko Diq on foreign investmemt:

British High Commissioner to Pakistan Adam Thomson has said that the verdict in international arbitration on the Reko Diq saga may have chilling affects on foreign investors.

“Supreme Court of Pakistan's verdict in certain cases whether it relates to Reko Diq or others is a sign of discouragement for foreign investors,” Adam Thomson said while talking to selected journalists on Wednesday night.

Tethyan Copper Company (TCC) filed for international arbitration to protect its legal rights after Balochistan rejected its mining lease application. Tethyan Copper – a joint venture between Chilean copper producer Antofagasta and Canada's Barrick Gold – owns the massive Reko Diq project in Balochistan with reserves estimated at 2.2 billion tons of gold and copper.

“There is a risk of misconception from some of its decisions and Reqo Diq is the latest one,” He said that Pakistan should think carefully about it.

Responding to questions about litigation between government of Pakistan and international companies, the British High Commissioner said that a strong judicial system will not only uphold Pakistan's interest but was extremely important to foreign companies.

He said that Pakistan and the United Kingdom signed a Bilateral Investment Treaty (BIT) in 1994 providing protection to companies in both countries. Pakistan is attracting British companies after promulgation of this agreement, he added.

He said that the 10% increase in trade compared to the previous year was not bad keeping in mind the global recession.

“UK-based exploration company Premier Oil has been working in the oil and gas sector of Pakistan for the last 10 years,” he said adding that there are more such companies.

He said that British companies are doing very well in Pakistan which reflected from their profits. “These companies also face challenges with regulatory bodies being the biggest challenge,” he said. Although, he said, Pakistan in South Asia is comparatively a good place to do business, corruption is also a problem as few companies find it difficult to work in certain sectors.

UK has very stringent Anti-Bribery Act which governs UK companies in Pakistan so that they would stay clean. “Some changes in reorganisation in government, ministries, regulatory bodies after the 18th Constitutional Amendment are also challenging to those British companies considering to invest in Pakistan,” he said adding that perception of insecurity is very high among them. “When I'm in UK, I try hard to overcome such impressions,” he added.

“India is second largest investor foreign manufacture holder in UK,” he said adding that all Pakistani companies should also see UK as a gateway to European Union. “We are the second largest investor in Pakistan and aim to become the largest,” he concluded.

http://paktribune.com/business/news/Pakistan-should-think-about-Rek...

Here's Daily Times on Reko Diq:

Reko Diq mining is once again topping the country’s legal discourse. At stake is one of the world’s largest gold and copper reserves worth tens of billions of dollars.
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It all started in the early nineties when BHP – a global mining giant — identified the mineral potential of Chaghai’s Tethyan belt in western Balochistan. This was inferred from the 1956-58 basic geophysical reports of the American Geological Survey complemented by satellite imagery of the earth’s crust over 13,000 square kilometres of Chaghai.

Having done the basic homework and waiting for the right opportunity, BHP signed the Chagai Hills Exploration Joint Venture Agreement ( CHEJVA) with the Balochistan Development Authority (BDA) when the caretaker government of Sardar Nasir Mengal took charge in July 1993 and World Bank executive Moeen Qureshi was Pakistan’s interim prime minister.

It was morally and politically incorrect for both the caretaker government and a global corporation like BHP to sign off Balochistan’s largest sub-surface asset to a single party without proper international bidding and through the BDA and not Balochistan’s Ministry of Minerals. At stake was over $ 500 billion worth of copper and gold extractable over the next century.

The reserves are shallow, only 21 metres deep and ideal for an open pit going down till 1,000 metres.

CHEJVA was in favour of BHP, Australia 75 percent to BDA’s 25 percent on a joint investment basis. Only 2 percent royalty was stipulated for the government of Balochistan against exploration rights over 3.3 million acres for a period of 56 years.

In comparison, the Afghan government gave a similar licence of gold mining at 26 percent plain royalty for 10 years at their Qara Zaghan Gold Project in 2011.

“Its not simple corruption but more a case of culpable national incompetence,” boils Raza Kazim.

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Over the next three years and as a result of basic shallow drilling samples, around 14 potential areas were identified by BHP, including the goldmine Reko Diq. The Balochistan government awarded 10 prospecting licences to BHP out of these. Then in 2000, BHP relinquished all those licences except one, i.e. PL-4, and this was then amalgamated with PL-14, i.e. Reko Diq.
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According to TCC’s feasibility, an ore extraction of some six billion tonnes is projected over the next five years with an output of 200,000 tonnes of extracted copper and around 250,000 ounces of gold every year. This capacity could double if needed.

The processing copper concentrate facility at Reko Diq will process 120,000 tonnes of copper ore every day.

Reko Diq project, which took over 20 years to reach this feasibility and national and international litigation levels is the second major copper/gold project of Balochistan, the first being Saindak.

In the Saindak project, the federal government spent over $ 200 million to develop a mine and processing facility for concentrate copper ore in the early nineties when Reko Diq just got started. Having worked and apparently failed at the project, the federal government handed the whole project to MCC China at only $ half a million per annum fee in 2001.

The Chinese have been extracting copper ore and shipping its concentrate to China over the last 12 years and giving the federal government around $ 60 million per annum as share of its 50 percent profits. The remaining 50 percent stays with the Chinese.

The government’s attitude towards strategic national assets can be gauged from the fact that the federal government has less than 10 employees to look after the whole of Saindak Copper Project in the Ministry of Petroleum while it employs over 90,000 persons for Pakistan Railways for the same amount of revenue.

http://www.dailytimes.com.pk/default.asp?page=2012\12\17\story_17-12-2012_pg7_16

Here's BR on PPL introducing new petroleum exploration technology in Pakistan:

A PPL statement here on Saturday said that developed by NXT Energy Solutions (NXT), a geophysical service company based in Canada, SFD (Stress Field Detection) is a proprietary cutting edge, eco-friendly airborne reconnaissance method to identify potential hydrocarbon traps and reservoirs in a time- and cost-effective manner, especially in unexplored on- and off-shore frontier regions with limited access and infrastructure.

It said that the SFD is expected to be particularly useful in the current energy scenario, warranting fast track identification of, and production from, relatively deeper, more complex reserves of hydrocarbons to bridge the supply-demand gap.

Welcoming the guests, PPL's Managing Director and Chief Executive Officer, Asim Murtaza Khan, underscored the increasing importance of deploying latest exploration technology to meet production and reserves replacement targets to address the current deficit and ensure future energy security. SFD technology has been successfully applied by leading oil and gas companies in North America, Colombia and other countries. PPL is proud to be the first company to apply the technology in Pakistan', he said.

http://www.brecorder.com/top-news/108-pakistan-top-news/98349-ppl-i...

Pakistan Supreme Court has voided Reko Diq lease with Tethyan, reports Globe & Mail:

Pakistan’s top court on Monday declared invalid a lease for one of the world’s richest deposits of gold and copper held by a Canadian-Chilean consortium that includes Vancouver-based giant Barrick Gold Corp.

Barrick, the world’s largest gold producer, and Chile’s Antofagasta Minerals, each own a 37.5-per-cent share, as the Tethyan Copper Company, in the largest Foreign Direct Investment mining project in Pakistan.

Their plan was to build and operate a copper and gold open-pit mine at Reko Diq in the Chagai district of the southwestern province Baluchistan, the most deprived part of Pakistan, rife with Taliban, sectarian and separatist violence.

Barrick and Antofagasta say the proposed plant could produce 600,000 tons of copper and 250,000 ounces of gold a year, but in 2011 work came to a standstill after the local government refused to renew the consortium’s mining lease.

The provincial government in Baluchistan is also the sleeping partner in the Reko Diq project with a 25-per-cent stake.

Reasons for the dispute are murky, but some analysts suggest that China, a close Pakistan ally, is also interested in the deposits.

Pakistan’s Supreme Court on Monday declared “not valid” the initial 1993 exploration agreement between the Baluchistan government and Australian mining group BHP, since BHP Billiton Ltd.

It said the agreement ran counter to Pakistan’s mineral development act and mining concession rules, and therefore to transfer it to the Canadian-Chilean consortium is also “illegal, void and non est”.

Experts say mining in Baluchistan is dominated by small companies focused primarily on marble and granite, which waste up to 80 per cent of mined minerals because of poor blasting techniques.

They also call for more transparent polices to allow business to flourish

http://www.theglobeandmail.com/report-on-business/industry-news/ene...

Here's WSJ on Reko Diq lease cancellation:

TORONTO—Pakistan's top court has declared invalid a lease that would allow a consortium that includes industry giant Barrick Gold Corp. ABX.T -1.67% to mine one of the world's richest deposits of copper and gold, a person familiar with the matter said.

Pakistan's Supreme Court made the ruling on Monday, the person said. The move adds further uncertainty to a project that has been beset by local squabbles.

The Reko Diq project is being run by Tethyan Copper Co., in which Toronto-based Barrick Gold and Chilean copper giant Antofagasta Minerals ANTO.LN -1.56% each own a 37.5% share. The remaining 25% is owned by the government of Baluchistan, the region of Pakistan where the mine is to be based.

The proposed plant could produce 600,000 tons of copper and 250,000 ounces of gold a year, according to industry estimates.

Last year, Tethyan filed arbitration proceedings against the Islamic Republic of Pakistan and the local Baluchistan government after officials refused to grant a mining lease to develop the $3.3 billion project.

Tethyan has already invested more than $220 million since 2006 in the project and completed a feasibility study to develop it. The project is slated to become the country's largest single foreign direct investment if it goes ahead.

Given the early-stage nature of the project, Barrick doesn't include Tethyan in statements of its reserves.

http://online.wsj.com/article/SB10001424127887323482504578227692948...

Here's a BR report on jewellery business in Pakistan:

KARACHI: The global demand of gold is more than 2500 tonnes and Pakistan's consumption is more than 100 tonnes which makes Pakistan world's 10th largest market.

Gold is usually imported from Gulf States and Western countries.

In gems sector, Pakistan is full of natural resources. Unmatched quality of ruby, emerald, topaz, aqua marine, fluorite and lais-Iazuli are mined from the valleys of Gilgit, Hunza, Swat, Azad Kashmir and Chitral.

This was stated by President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Zubair Ahmed Malik while inaugurating three-day International Gems and Jewellery Exhibition at a hotel here on Friday.

This international exhibition has been jointly organised by Jewel Time magazine and All Pakistan Gems and Jewellery Merchants Association (APGJMA) in collaboration with Trade Development Authority of Pakistan (TDAP).

Vice Chairman of APGJMA Kashif-ur-Rehman said that more than 50 companies have participated in the exhibition. The products of stone, diamond, gold and silver jewellery are show-cased. A large number of people visited the venue.

FPCCI President said that due to unavailability of gem cutting and polishing facilities, gems are exported in a raw form which brings nothing as compared to its real worth.

Pakistan has been gifted with abundant resources of several precious and semi-precious gemstones. At present, most of these are found in Gilgit-Baltistan and Khyber- Pakhtunkhwa, and Balochistan has a huge potential which remains to be explored.

Most important of the currently found stones are emeralds of Mingora (Swat), pink and golden topaz of Katlang (Mardan) and aquamarine of Chitral and Neelam valleys, he said.

There is no formal survey available to identify the geological resources of gemstones in the country. Due to lack of realisation of its importance as an industry, those who are engaged in the mining, cutting/ polishing and trading of gemstones in Pakistan have not been able to exploit the full potential of this sector.

Malik said Lahore has become the second largest jewellery production hub of Pakistan after Karachi. More than 25,000 business enterprises related to gems and jewellery are operating in Punjab and providing employment to more than 20,0000 individuals.

It is estimated that $1.5 billion jewellery target set up for 2017 by Pakistan is achievable provided the entrepreneurs are encouraged, a supportive infrastructure is developed, latest mining and cutting, gems and jewellery manufacturing techniques are introduced at the grassroots level.

Exports of gems and jewellery in the country has witnessed a sharp increase of 16.99 percent and 138.73 percent respectively during first eight months of current financial year against the same period of last year.

The jewellery exports during the period under review were recorded at $1.21 billion while during last year, the exports stood at $506.3 million.

http://www.brecorder.com/pakistan/business-a-economy/114948-pakista...

Here's an Economic Times report on India gold demand:

MUMBAI: The country's gold demand dipped by 12 per cent in 2012 to 864.2 tonne, mainly on account of higher import duties, jewellers strike over proposed measures to curb imports and a sharp rise in the domestic price, World Gold Council said in its recent report.

The overall demand of gold in the country had stood at 986.3 tonne in 2011, according to the WGC Gold Demand Trend 2012 report released today.

"China and India remain the world's gold power houses. In India, consumer sentiment towards gold remained strong despite measures aimed at curbing demand, reaffirming gold's role in Indian society.

In an underdeveloped financial system like India, gold has an important role to play," WGC Managing Director, Investment, Marcus Grubb said.

In 2013, WGC expects the demand to be in the 865-965 tonne range, an 11 per cent increase at the upper end, depending on any further government measures, he said.

India is likely to remain the biggest market for gold this year followed by China, he said.

In the first half of 2012, consumers faced headwinds in the form of higher import duties, market turmoil over proposed measures to curb imports and a sharp rise in the local price.

However, the demand staged a strong revival in the second half of the year as the market thrived during the fourth quarter wedding season and festive period.

Total jewellery demand in the country in 2012 was down by 11 per cent to 552 tonne, compared to 618.3 tonne in 2011.

However, the demand in terms of jewellery value rose by 8 per cent to Rs 1,l58,090 crore, compared to Rs 1,46,067.8 crore in 2011.

Total investment demand was down by 15 per cent to 312.2 tonnes, against 368 tonnes in 2011.

In value terms, gold investment demand went up by a marginal 3 per cent to Rs 89,412 crore compared to Rs 86,936.7 crore in 2011.

"Despite the turbulent macroeconomic climate throughout the year, as well as the regional uncertainties affecting India and China, the two largest gold markets, annual demand was 30 per cent higher than the average for the past decade," Grubb added.

http://articles.economictimes.indiatimes.com/2013-02-14/news/371003...

Here's a National Geographic piece on Reko Diq:

During a recent research visit to Chile, I had a rare opportunity to meet, Fernando Crisosto, a social engagement officer who had worked with Antofagasta Minerals and visited Pakistan several times when the project still had some potential for development through joint foreign engagement. Fernando was very nostalgic about the time he spent on the Reko Diq site and showed tremendous affection for the people of Balochistan and of Pakistan. Unfortunately due to mismanagement at various tiers of government, errant data being communicated, and the rise of resource nationalism, the project is now stuck in the courts and international arbitration mechanisms. No doubt the distrust was also exacerbated by badly sourcing the feasibility study of the project by a Canadian firm SNC-Lavalin which was subsequently been ”blacklisted” by the World Bank. Fernando indicated to me that even though their plans for social development were far more detailed than the neighbouring Saindak mine which is operated by a Chinese government partnership, there was a deficiency of community engagement and communicating those plans effectively to tribal leaders.

Nevertheless, Baloch or Pakistani nationalists alike should first of all be very cautious about believing random data points and value of the reserve at Reko Diq which are asserted in media appearances by said “experts.” The geologic reality of the Reko Diq deposit is that it is essentially a low-grade copper-gold porphyry which clearly has much potential but is by no means “Solomon’s fortune” as it is sometimes made out to be. Utterly absurd and unsubstantiated numbers for the value of gold and copper reserves in Afghanistan and Pakistan are wantonly paraded in prominent media venues in both countries. For example one news story in Pakistan’s most widely circulating English daily this year asserted that the value of the mineral wealth in Reko Diq was in excess of $3 trillion. This number has absolutely no empirical or even remotely rational basis. Indeed the estimated value by the World Gold Council at current prices of all the gold ever mined in the history of the planet is around $8.8 trillion. It would be delusional to think that a low-grade deposit in Balochistan has more than 1/3 the value of the gold ever mined in the history of the Earth!

Pakistan’s media should consult more deliberately with international geological experts who do not have any particular vested interest in the development of the project rather than interviewing hyper-nationalist geologists that have limited substantiation of facts and grossly exaggerate value of the reserve as well as Pakistani technical expertise to extract the resource. In particular the research of Pakistani-Canadian mining academic Professor Laeeque K Daneshmend deserves greater appreciation and engagement to counter the unsubstantiated data being branded about in the media.

Yet conspiracy theorists continue to churn out estimates which have no basis in reality and are misleading the Baloch and Pakistani public. Further misinformation about the Chilean company that invested in this project has also been spread by some of these negative elements. For example in my last visit to Pakistan I heard baseless rumours that the Reko Diq mining concessions was now owned by “Zionist” family interests. Regardless of whether or not such ownership should even be a concern in commercial contracts, it is patently not true. Antofagasta Minerals is owned by the Luksic family of Chile that has Croatian origin. The founder of the company and family patriarch Andronico Luksic (died in 2005) had a Croatian father and a Bolivian mother and absolutely no connection to any ethno-religious causes.

http://newswatch.nationalgeographic.com/2013/11/25/chile-and-pakist...

Uncertainty surrounds the future of a world-class gold mine in Pakistan due to poor handling of the project by regional authorities.

Reko Diq is a copper and gold mine in Chagai district of Balochistan province with a value up to $500bn. It holds about 5.9 billion tonnes of ore, making it the world’s fifth largest deposit of gold and copper.

But the huge project has ground to a halt over a dispute between the provincial government and the miners.

Tethyan Copper Company (TCC) – a joint venture of Barrick Gold of Canada and Antofagasta of Chile – had been awarded a licence for exploration in the Reko Diq area in 2006. In 2011, TCC’s application for a mining lease for the project was rejected by the Balochistan government of then-chief minister Aslam Raisani, which decided to run the project on its own.

TCC took the case to the international arbitration court claiming damages because it had invested more than $500 million in exploration and feasibility studies.

“There is potential … for multiple mine developments over the next few decades. By refusing a mining licence without good grounds, it’s sending quite a negative signal to the exploration/mining community,” said Tim Livesey, the chief executive of TCC, in 2012.

The rejection of a mining licence to the company after an exploration permit had been granted was an unusual decision by the government. Mr Raisani abruptly closed off communication with the company and even refused to meet its executives.

Mr Raisani rejected the TCC bid in the name of protecting the legitimate interest of Balochistan, but did his decision really help the least developed province and its people?
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Metallurgical Corporation of China (MCC) came with a counter proposal for a mining lease for Reko Diq and offered Balochistan a larger share in income and royalty.

In 2002, MCC had acquired a lease the Saindak copper and gold project in the same district as Chagai, which expired in 2012. If the Raisani government was serious in its desire to develop deposits using local firms, why did it not oppose the five-year extension in the lease period of the Saindak project?

The Reko Diq project became controversial after news stories alleged that the Reko Diq gold mines were being secretly sold to foreign firms for peanuts.

The dispute between TCC and Balochistan began after the resignation of Mr Musharraf in 2008. Under his administration, TCC was awarded the project with mining rights and it signed a joint-venture agreement with Balochistan holding 25 per cent interest in the project. But in December 2009, Balochistan said it was cancelling the TCC deal.

That triggered a blame game, with each side accusing the other of violating mineral rules. In January 2013, former chief justice of the supreme court Iftikhar Chaudhry declared the Reko Diq contract between the Balochistan and TCC void.

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Arbitration proceedings have further delayed the mine’s development, which has not been worked since 1993 when BHP Billiton signed a deal with Balochistan. While BHP had an exploration deal, it did no practical work and sold its 75 per cent interest to TCC in 2000. In 2006, TCC was taken over by Antofagasta and Barrick Gold.

TCC deserves credit for the discovery of the huge Reko Diq deposits. The company was willing to make an investment of $5bn over five years. It could have been the biggest foreign-financed project in the country’s history. But the short-sighted policy of the government meant this potential game changer never got off the ground.

What has been the outcome of the dispute so far? The country has missed a huge foreign investment. It has closed the door on technology transfer in mining into Pakistan and discouraged foreign firms eyeing up its mineral deposits.


http://www.thenational.ae/business/economy/pakistans-500bn-gold-min...

Pakistan discovers 'huge' reserves of iron ore

Pakistan on Wednesday said it has discovered major reserves of iron ore as well as copper, silver and gold in its central province of Punjab.

The reserves were found in Chiniot, around 160 kilometres northwest of Lahore, by Chinese group the Metallurgical Cooperation of China.

A senior provincial administrative official told AFP that initial estimates indicated 500 million tonnes of iron ore, a primary ingredient in steelmaking, had been discovered.

He said the Chinese company has expressed interest in setting up a steel mill on the site, adding that the extracted iron had been tested in Swiss and Canadian laboratories, which found 60-65 per cent of it to be high grade.

The official added that silver, copper and gold samples would also be sent for testing soon.

Speaking at the site on Wednesday, Prime Minister Nawaz Sharif said the discovery could help Pakistan's stuttering economy turn a corner and end its “begging bowl” culture.

“It is Allah's blessing that under the lush green fields rich deposits of copper, iron and gold have been found, which will help the country get rid of the 'begging bowl' for good,” Nawaz said.

Conflict, instability, corruption and a chronic energy shortage have hampered Pakistan's economy for years. The IMF granted a $6.6-billion loan to Pakistan in September 2013 on the condition that it carry out extensive economic reforms, particularly in the energy and taxation sectors.

http://www.dawn.com/news/1162943

Azad #Kashmir: #Pakistan’s treasure chest of rubies worth $500 million http://ara.tv/jns9x via @AlArabiya_Eng

http://english.alarabiya.net/en/business/markets/2017/10/16/Azad-Ka...

The people of Azad Jammu and Kashmir (AJK) are sitting on a treasure chest: millions of rubies, estimated to be worth up to half a billion dollars, are lying beneath them.

But archaic tools and a lack of investment in infrastructure and techniques are hampering efforts to transform the area into a significant player in the gem industry.

"Mining is done by small blasts – and we lose 40 to 50 percent of the value of the stones, and secondly due to lack of investment in our corporation we are not making the most of our resources," said Shahid Ayub, Azad Kashmir Mine and Industry Development Company director general.

Just one mine and an exploration site are operational in Kashmir.

It's hard labor at more than 3,500 metres above sea level. But for miners working on the mountains, it is valued work.

"I have been working in this mine for the past four years. For the first two years, I worked here as an intern and after that I got a job. We work here four months in a year,” said Muhammad Azeem, a mine worker.

“I have earned enough money to lead a good life," Azeem added.

The rubies are sold in their raw form at a highly-regulated annual auction.

Many change hands informally too. Last year, a government training center was launched to develop the trade.

"We are providing training and assistance to these people about mining and gemstone development. God willing, soon all of them will be able to extract precious stones by themselves. With the availability of skilled workforce in this field, Azad Kashmir will shortly become an international hub of gemstones," said Imran Zaffar, principal Pakistan Gem and Jewellery Training and Processing centre.

The stones are said to account less than one percent of the region's tax revenue. But hopes are high these rubies will one day help Kashmir sparkle in the international gem industry.

Economist Magazine: "Just 1% of the vast #Thar #coal reserve discovered in 1992 could supply a fifth of #Pakistan's current #electricity generation for half a century" #CPEC #energy #infrastructure

https://www.economist.com/news/business/21736185-just-1-vast-reserv...

PAKISTAN’s enormous mineral wealth has long lain untapped. Since a 1992 geological survey spotted one of the world’s largest coal reserves in Thar, a scrubby desert in the southern province of Sindh, prospectors have hardly dug up a lump. Among those to flounder is a national hero. Samar Mubarakmand, feted for his role in Pakistan’s nuclear-weapons programme, has just shut the coal-gasification company he founded in 2010, when he vowed on live television to crack Thar.

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To such qualms, the government offers three rejoinders. First, severe power shortages have long blighted the nation, and renewable sources cannot offer the daylong, year-round power it needs. Second, coal accounts for less than 1% of current generation, compared with 70% in neighbouring India and China. And third, domestic coal would allow the country to forgo expensive imports of the fuel for newly built power stations, a drain on fast-dwindling foreign-exchange reserves.

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Eight years ago Engro bought the rights to one of Thar’s 13 blocks, containing 1% of the reserve (more than enough given the gargantuan size of the mine). To work on extraction, it formed the country’s biggest ever public-private partnership, the Sindh Engro Coal Mining Company (SECMC), in which Engro digs and the state provides infrastructure. Relying on the state can break strong firms. Engro itself almost went bankrupt in 2012 after the government refused to honour a sovereign guarantee to provide gas to one of its fertiliser plants. Yet without similar government support, no other Thar block-owners have secured financing, leaving Engro’s diggers, which began work last year, to move ahead.

The endeavour benefits from being in the group of infrastructure projects that make up the $62bn China Pakistan Economic Corridor, a hoped-for trade route. Western banks shook their heads when approached about a coal project, so Engro has relied on Chinese financing. Analysts note an irony in China’s promotion of coal abroad as it withdraws from the fuel at home. Handling the extraction at Thar is the China Machinery Engineering Corporation, a state-owned firm with expertise beyond Pakistan’s reach.

Around 126 metres below the sands of Thar, with just 20 more to go, Engro’s diggers can now almost touch their prize. When the coal is reached, as is expected in mid-2018, it will feed a pit-mouth power station constructed by Engro, and, in time, three others owned by partners in the SECMC. These stations will furnish around a fifth of the country’s electricity for the next 50 years. The financial rewards could be vast. “All my richest friends are jumping up and down [because they did not get there first]”, says the boss of one big multinational construction business.

Hurdles remain, not least complaints from nearby villagers about the disposal of the vast quantities of wastewater from the mine on their ancestral grazing lands in the form of a reservoir. In reply, Engro stresses its social work in the surrounding district of Tharparkar, the poorest in Sindh, which includes the construction of several free schools. More self-interestedly, it is training locals to drive so they can man the dump trucks that trundle day and night around the mine. According to Shamsuddin Shaikh, chief executive of Engro Powergen, the conglomerate’s energy division, Engro also has its sights on Reko Diq, a gargantuan and long-stalled copper mine in Balochistan, the least developed of Pakistan’s provinces. To tap one of the country’s two largest and most niggardly mines is hard enough. Imagine cracking them both.

#Pakistan military eyes key role developing Reko Diq, giant #copper and #gold mine. It has “substantial” #mining capability in recent years. FWO could be part of a consortium alongside global miners who have the know-how to mine such a gargantuan deposit https://reut.rs/2F7eeLh

State-run companies from resource-hungry China have long coveted Reko Diq and more recently Saudi Arabia has shown interest, according to Pakistani officials.

Some Western diplomats say the Reko Diq dispute has been a significant foreign investment deterrent, with international businesses unnerved at how Pakistan dealt with the companies that had pledged to invest $3.3 billion to develop the country’s then-biggest mining project.

Barrick Gold and Antofagasta, whose joint venture Tethyan Copper Company (TCC) discovered vast mineral wealth in Reko Diq, say they had invested more than $220 million by the time the Baluchistan government, in 2011, unexpectedly refused to grant them the critical mining lease needed to keep operating.

Pakistan argued its move was legitimate because TCC’s feasibility study was incomplete and the country’s Supreme Court voided the deal in 2013. But in 2017 the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Pakistan.

TCC did not respond to requests for comment and Antofagasta and Barrick Gold both declined to comment. Reuters could not determine whether either company would be willing to return to the project.

FOREIGN INVESTORS
The last serious attempt at settling the Reko Diq case was scuppered in 2016 by the military, which vetoed paying hundreds of millions of dollars to TCC, according to a senior Baluchistan official and two former senior officials in Islamabad.

But the military has since changed its stance and is more open to a settlement with TCC, according to a lawmaker close to the military and a source close to Prime Minister Khan. The military was also involved in appointing Pakistan’s current legal team.

In response to a Reuters question about blocking the previous settlement effort, the military said: “Let’s see how the case progresses.” It did not elaborate or comment on whether it was playing any role in the latest negotiations.

Some mining experts say a likely solution would be for a new investment consortium to pay the settlement fee on behalf of cash-strapped Pakistan in exchange for future royalty fees or mining rights.

China grounds Boeing 737 MAX jets after crash
Information Minister Chaudhry said Pakistan was engaged in negotiations with “both” the current investors about a settlement and also potential new investors, with interest coming from the Middle East and Europe. He declined to name the potential investors.

Pakistani Finance Minister Asad Umar said in October that Saudi Arabia has inquired about investing in Reko Diq and another government official confirmed talks were ongoing.

Saudi Arabia did not respond to a Reuters request for comment on Reko Diq. During Crown Prince bin Salman’s visit to Pakistan last month, the kingdom pledged to invest $2 billion in mineral development projects, though the provisional agreements were vague and did not mention any specific projects.

China’s state-owned miner China Metallurgical Group Corporation (MCC), which operates the Saindak copper and gold mine close to Reko Diq, has been eyeing the bigger deposit for more than a decade, according to mining and MCC officials.

A few years ago Chinese state giant Norinco also made an approach, according to two sources familiar with Norinco’s offer.

MCC and Norinco did not respond to requests for comment.

When a mining company approached former general Abdul Quadir Baloch about Reko Diq around 2016, when he was federal minister for the frontier regions, he took their proposal not only to then-premier Nawaz Sharif, but also to the army chief.

“The military has to give a (security) guarantee to any company coming in to explore or exploit this project, so they are a stakeholder,” said Baloch.

#Pakistan fined $5.9 billion over #RekoDiq contract breach. The mine has gold reserves estimated at $100+ billion. #China may make a bid to take over the #gold mine project and pay the penalty in return for long-term lease and exclusive mining rights. https://asia.nikkei.com/Politics/International-relations/China-resc...

The possibility of Pakistan seeking assistance from China is emerging after the government was slapped with a $5.95 billion fine in a legal dispute over rights for a copper and gold mine in the country.

Tethyan Copper had filed a case against Pakistan with the International Court for Settlement of Investment Disputes in 2012 for violating an agreement that the company signed with Pakistan for exploration and mining of the Reko Diq mine.

The court issued its decision in 2017 in favor of Tethyan Copper, a joint venture between Barrick Gold of Canada and Antofagasta Minerals of Chile, with hearings continuing to determine the amount of damages to be paid by Pakistan. On Saturday, the court announced that the government of Prime Minister Imran Khan must pay a total fine of $5.9 billion -- a $4.08 billion penalty and $1.87 billion in interest.

Legal experts say Pakistan cannot appeal the court's decision and that it can only apply for technical review, whereby the government can ask the court to review the amount of damages. That process could take up to three years, which would offer Pakistan more time before the fine is due.

The amount of damages Pakistan has been ordered to pay is nearly equal to the recently approved bailout package from the International Monetary Fund.

The damages also are twice the amount of Balochistan's annual budgeted expenditures, which means Pakistan in all likelihood will have to look quickly for payment options. One of the strongest options, according to analysts, is its northern neighbor: China.

Reko Diq sits in Pakistan's southwest Balochistan province, at the triangular border with Iran and Afghanistan. The mine has gold reserves with an estimated value of more than $100 billion.

Work at Reko Diq has been suspended since 2011, when Pakistan rejected the application of Tethyan Copper to mine the area. Before that, Pakistan and Tethyan Copper agreed that the company would conduct a feasibility study under an exploration license and that it would apply for a mining license to carry out the mining.

The board chairman of Tethyan Copper, William Hayes, has said that his company is ready to enter a settlement for a mutually beneficial solution with Pakistan. That could pave the way for a third party like China to help settle the case.

"Given the ever-growing domestic consumption of gold in China and Beijing's interest in investing in gold and copper mining industries abroad, I won't be surprised if China makes a bid to take over the Reko Diq gold mine project and offers to pay the penalty in return for long-term lease and exclusive ownership rights," said Mohan Malik, a professor at the Asia-Pacific Center for Security Studies in Hawaii.

World Bank ruling against Pakistan shows global economic governance is broken


http://theconversation.com/world-bank-ruling-against-pakistan-shows...


The International Centre for the Settlement of Investment Disputes was established in 1966 as part of the World Bank Group. The centre oversees arbitrations between foreign companies and states in a process known as the investor-state dispute settlement (ISDS).

ISDS is hugely controversial for a variety of reasons ranging from the secrecy of the hearings to the substantial costs associated with defending a claim and the ability of corporations to challenge health and environmental measures.

The case that cost Pakistan $5.8 billion did not revolve around such measures but rather the decision of a provincial government to backtrack on a sweetheart deal that had been offered to a mining firm, allegedly the result of corruption. Leaving the merits of the case to one side — it is difficult to assess the tribunal’s reasoning when the award isn’t public, after all — let’s take a closer look at the payout.

According to the mining company — Tethyan Copper, partially owned by Canada’s Barrick Gold — it spent US$220 million on exploration activities before things went south. One might argue that a fair outcome, if the government was solely to blame, would be for the award to cover these sunk costs. Instead it was more than 25 times that amount. That is because the tribunal chose to award the company “lost future profits” from the project.

Arbitrators don’t have crystal balls. They don’t know what the value of a mineral will be in a year, let alone 30 years. And they are lawyers, not market analysts. So how do they decide how much profit a firm would have made in a hypothetical alternative future?

The answer is, partially, that they rely on “experts” brought in by each of the parties to the dispute. These experts provide a best guess for what they think a project is worth. International law scholar Robert Howse calls this “junk science.”

Unsurprisingly, the state’s expert often provides a low-ball estimate for the value of a project and the investor’s expert gives an inflated value. Faced with this discrepancy, arbitrators will often choose to go down the middle and pick an arbitrary value. Tethyan Copper had originally sought more than US$11 billion in damages, suggesting that the tribunal in this case may have taken this approach.

#Pakistan's Golden Opportunity in #Balochistan. It has large deposits of #gold, #copper, #chromite, #bauxite (aluminum), iron ore, rubies, emeralds, topaz, mineral salt and coal located in Balochistan whose land area is the same as Germany's https://stratforshare.page.link/9EMa via @Stratfor

Highlights
Until Pakistan and the Tethyan Copper Co. settle their dispute, development of the country's Reko Diq gold and copper mine will languish, leaving a potentially abundant revenue stream dry.
Growing foreign investment in the sector will heighten the need for an effective dispute resolution mechanism.
Unless Pakistan implements the necessary reforms to attract foreign investment, the country's mining sector will not grow beyond its current 3 percent contribution to Pakistan's gross domestic product.

In a remote and arid corner of southwestern Pakistan, Islamabad has found itself embroiled in a difficult battle: a multibillion-dollar dispute with a global mining company over one of the world's richest untapped deposits of copper and gold. In July, the World Bank's International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to pay $5.9 billion in damages to the Tethyan Copper Co., a joint venture between Canada's Barrick Gold Corp. and Chile's Antofagasta PLC. The ruling stems from a 2012 case that Tethyan lodged at the ICSID against Islamabad for failing to issue a license to mine gold and copper at the Reko Diq site.

The case draws attention to the rich resources of Balochistan, Pakistan's rugged southwestern frontier in which Reko Diq is located, as well as the tug of war between domestic Pakistani law and international arbitration in resolving investor disputes. But above all, the Reko Diq affair shines a light on Pakistan's numerous underground resources and its broader failure to exploit them — something that will continue to haunt the country if it is to fulfill Prime Minister Imran Khan's goal of rapidly ramping up foreign investment.

The Big Picture
Pakistan's Balochistan province plays a vital role in the China-Pakistan Economic Corridor because of its location on the Arabian Sea. It's also known for its resource riches that include an abundance of gold and copper deposits. But a longstanding dispute between the government and a mining company point to the need for reforms, without which mining's contribution to Pakistan's economy won't exceed 3 percent.


.....Its strategically located coastline faces vital shipping lanes in the Arabian Sea, including traffic destined for the Strait of Hormuz. As a result, Balochistan is the site of a variety of projects as part of the multibillion-dollar China-Pakistan Economic Corridor, which aims to create a direct overland route linking western China and the Arabian Sea through Balochistan's port of Gwadar. At the same time, however, Balochistan is also home to an insurgent movement that seeks independence from Pakistan on cultural and economic grounds; indeed, Chinese investment in Balochistan has exacerbated long-standing separatist grievances of foreign exploitation in the province. 

The mine itself is located in Chagai, Pakistan's largest and westernmost district. According to Tethyan, Reko Diq contains 2.2 billion metric tons of mineable ore that could yield 200,000 metric tons of copper and 250,000 troy ounces of gold annually for over half a century. To extract the precious metals, the company must shovel, crush and grind the ore into a fine powder before converting it into a slurry concentrate for transport through a 682-kilometer underground pipeline to Gwadar. At the port, the company plans to dry the concentrate before loading it onto ships for smelting abroad.

But for all of its lucrative potential — $353 million annually at current gold and copper rates — the development of Reko Diq has stagnated because of the long-running legal battle that culminated in last month's $5.9 billion fine.

#Pakistan's top biz tycoons, incl. Arif Habib, M.A. Tabba & Yunus Bros offer to take over Reko Diq, among the largest underdeveloped copper and gold deposits in the world, with annual production capacity of 200,000 tons #copper and 250,000 oz of #gold.
https://www.bloomberg.com/news/articles/2019-10-25/pakistan-s-tycoo...

Reko Diq is one of the largest underdeveloped copper and gold deposits in the world, capable of producing each year 200,000 tons of copper and 250,000 ounces of gold.

Pakistan’s top business tycoons have offered to take over a disputed copper and gold deposit that was once explored by Barrick Gold Corp. and Antofagasta Plc, according to people familiar with the matter.

Officials at the provincial Balochistan government are said to have met with a consortium of four business groups including tycoons Arif Habib and Muhammad Ali Tabba who are willing to invest about $1 billion of their own cash in the project, the people said, asking not to be named because the discussions are private. The consortium is willing to go through a bidding process to take over the project, the people said. Pakistan’s provincial government spokesman didn’t respond to requests for comment.

An international tribunal run by the World Bank in July ordered Pakistan to pay $5.8 billion in damages to Barrick Gold and Antofagasta after the country denied them a license to develop the Reko Diq mine in 2011. Collecting the funds though may be a challenge, given Pakistan’s fragile economic state. The damages almost match the International Monetary Fund’s $6 billion bailout for Pakistan earlier this year to help the South Asian nation avert an economic crisis.

The provincial chief minister has expressed a preference for Pakistani companies to take over the mine, the Dawn newspaper reported earlier this month. The business groups that showed interest in the mining project are: Yunus Brothers Group that owns Lucky Cement Ltd., Arif Habib Group, Fatima Group and the owners of Liberty Power Tech Ltd., the people said. The four are being led by Shamsuddin Shaikh, who spearheaded a group of companies to mine coal from Pakistan’s Thar desert for the first time.

Reko Diq is one of the largest undeveloped copper and gold deposits in the world, capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century, according to a feasibility study before the dispute. The capital investment at the time would have exceeded $3 billion.

#Pakistan's #copper #export to #China up 400%
in 3 years from $106 million to $550 million in 2019. Metallurgical Corporation of China (MCC) that is #mining Saindak expects to grow export to $10 billion per year once Reko Diq is settled. #economy #CPEC https://nation.com.pk/31-Mar-2020/pakistan-copper-s-export-to-china...

Pakistan has confirmed a 400 percent increase in the export of copper products to China in the recent year.

According to a report published by China Economic Net, this huge rise in the export of copper and other copper-related products from the country has helped to boost local industry.

Three year back exports of copper from Pakistan were of only 106 million dollars, however, In the year 2019, copper exports to China have risen to 550 million dollars.

The current rise in exports is seen though the largest copper reserves of Pakistan "Reko Diq project" which is under dispute at the international court of justice.

If the dispute settles down shortly then one of the biggest players in the copper industry of China, Metallurgical Corporation of China (MCC) that is mining in Saindak mines expects to take the export to $10 billion per year.
It is to be noted that mining and processing of copper requires a high-end technology and the expertise of Chinese copper processing companies like MCC have played a very vital role to develop the Saindak copper mines from the year 1995 onwards.

Talking to CEN, Director of Administration Office Song Guozhao said that Saindak Copper-Gold Project is designed to produce and process 12,800 tons of copper ores per day (4.25 million tons per year); currently, the output of copper blister is about 13,000 tons annually.

“By the end of February 2020, the project has a total of 1,977 employees, 256 Chinese and 1,721 Pakistani, of which the number of local employees accounts for 87% of the total,” he mentioned.

He stated that as the Pakistani managerial and technical personnel continuously improve their capacity, the company will further, carry forward the process of localized administration.

Saindak Copper-Gold Project composes of three ore bodies, that is the South, the North and the East Ore Bodies (SOB, NOB & EOB). The MCC has been working in SOB and NOB, and the mineable resources in the two ore bodies are going to run out soon.

The Chinese and Pakistani sides are in close communication on its feasibility. Since the other two ore bodies are going to run out of resources soon,

it is imperative to find supplementary resources so that the development of the project would be sustained, the employment of local people will be secured, and more continuous contributions will be made to local economy, Song said.

Saindak is an open-pit mining project rather than underground mining, so there is no sinking problem in the mining area. We have been operating the project for so many years and we have a good knowledge and understanding of the country, especially the mining industry, cultural environment, religious practices in Balochistan.

We also enjoy sound cooperation with federal and local governments and other partners in Pakistan. Given this, we are willing to expand our investment in the mining sector in Pakistan.

We are interested in the development of the H4 and Reko-Diq, and we hope that the Pakistani government will conduct international tenders for these projects as soon as possible, Song added.

Talking with CEN, Commercial Counselor of Pakistan Embassy in China Badar u Zaman said that the Pakistani government is eager to increase the exports of copper to China.

The commercial section of the embassy is putting huge efforts which have resulted in a 400 percent increase in copper exports in the last two years.

#Pakistan's #copper #exports to #China jump 400% to $550 million last year from $106 three years ago. https://swarajyamag.com/news-brief/pakistan-gains-from-sterlite-pla... via @swarajyamag

The Sterlite copper plant was ordered shut by the Tamil Nadu government on 28 May 2018 after protests demanding its closure turned violent.

In the violence that occurred on 22 May 2018, at least 13 persons were killed when police fired at protesters who turned violent and began damaging vehicles and properties.

The protests demanding the closure of Sterlite began in February 2018 after Vedanta launched works for further expansion of the Thoothukudi plant.

The Sterlite Copper plant contributed 40 per cent of the country’s total copper production when it was forced to shut down.

The Union government told Parliament earlier this year that the plant’s closure had led to a domino effect with imports rising and exports slipping.

In view of the Thoothukudi plant’s closure, India became a net importer of copper after 18 years. Imports more than doubled to 92,990 tonnes during the 2018-19 financial year, while exports dropped to a meagre 47,917 tonnes from 3.78 lakh tonnes.

A total of $605.20 million of precious foreign exchange was spent on imports during the 2018-19 financial year, while $684.02 million was spent during the April-September period of 2019-20 financial year.

According to Trading Economics, Pakistani exports of copper and articles increased over 66 per cent to $353.87 million in 2019 from around $210 million the previous year.

The News said that Pakistan increased its exports to China through one of its largest copper reserves, the ‘Reko Diq project’.

Reko Diq is a small desert area town in Balochistan province bordering Afghanistan and Iran. The “Reko Diq project” is under dispute since Anglo-Australian mining firm BHP discovered large deposits of gold and copper ores.

BHP sold its stakes to Tethyan Copper Company (TCC) but the Balochistan government failed to acknowledge it.

TCC went to the World Bank’s International Centre for Settlement of Investment Disputes and got $5.95 billion order in its favour.

However, the dispute is yet to be resolved.

China’s biggest copper industry player, Metallurgical Corporation of China, is looking forward to increasing Pakistan copper exports to $10 billion a year if the “Reko Diq project” dispute is resolved.

The Metallurgical Corporation is executing the Saindak gold-copper project in Balochistan since 1995.

The Saindak project produces 4.5 million tonnes of copper ores a year that helps smelt 13,000 tonnes of copper blister annually.

Since the resources are fast depleting at Saindak, the Chinese company is keen on taking over the operations at the ‘Reko Diq project’.

Beijing has asked Pakistan to call for international tenders for this and another project called H4, even as Islamabad sounds confident of increasing its copper exports to China.

#Pakistan $6 Billion Reko Diq (copper-gold mine) Penalty Might Get Annulled After Arbitrator Found Guilty. #ICSID has also annulled penalty imposed on #Spain by the same arbitrator after finding him guilty of partiality

https://propakistani.pk/2020/06/16/pakistans-6-billion-reko-diq-pen...


The prospects of Pakistan’s $6 billion penalty in the Reko Diq case to be waived off have received a significant boost.

Recently, the International Centre for Settlement of Investment Disputes (ICSID) nixed a €128 million penalty imposed on Spain after an arbitrator Stanimir Alexandrov, who had represented the claimants in the case against Pakistan as well, was found guilty of conflict of interest.

It is pertinent to note that ICSID has annulled an award for the first time due to the arbitrator’s lack of impartiality and independence.

Following the development, Pakistan has once again knocked on ICSID’s door for the annulment of the $6 billion penalty in the Reko Diq case.

Legal experts have suggested Pakistan should raise objection over the inclusion of Stanimir Alexandrov of Bulgaria in the tribunal.

Pakistan’s legal team Allen & Overy LLP had also previously applied for the disqualification of the Bulgarian arbitrator from the tribunal but failed to convince the ICSID.

In July 2019, the ICSID had imposed a $6 billion penalty on Pakistan following the Supreme Court’s decision in 2011 which revoked the mining lease of Tethyan Copper Company (TCC), a consortium of Chilean and Canadian companies, for the Reko Diq project.

ICSID had concluded that Pakistan unlawfully annulled the lease of TCC and violated the Australia-Pakistan bilateral investment treaty.

Reko Diq, a small town in Chagai, Balochistan, has the biggest gold and copper deposits in Pakistan. Once fully developed, 250,000 ounces of gold and 200,000 tons of copper can be extracted from the mines each year for the next 50 years.

#Pakistan seeks relief from $5.8 Billion fine over Reko Diq #copper/#gold mining lease in #Balochistan. Economist Jeffrey Sachs calls it “mugging” of Pakistan. Others question reasoning behind huge award, over 2X biggest prior awards. .https://finance.yahoo.com/news/pakistan-seeking-relief-5-8b-0558303... via @YahooFinance


Pakistan is seeking the reversal of a $5.8 billion penalty imposed by an international tribunal for denying a mining lease to an Australian company, saying that paying the fine would hinder its handling of the coronavirus pandemic.

The Reko Diq district in southwestern Pakistan’s Baluchistan province is famed for its mineral wealth, including gold and copper. Prime Minister Imran Khan’s government considers it a strategic national asset, though instead of yielding a bonanza the Reko Diq mining project may cost the country dearly.

The World Bank’s International Center for Settlement of Investment Disputes is considering Pakistan's appeal against enforcing the penalty over its cancellation of the Reko Diq mining lease for Tethyan Copper Corp., a 50-50 joint venture of Barrick Gold Corp. of Australia and Antofagasto PLC of Chile.

In the meantime, the Baluchistan government has set up its own company to develop the mine: As prices for commodities surge, with gold recently at more than $2,000 an ounce, turning fiasco to fortune is all the more appealing.

Pakistan and Tethyan both have signaled a willingness to discuss alternative solutions, such as a settlement, but the status of any talks on a deal is unclear. Officials on the Pakistan side said they have not been in direct contact and no specific settlement has been proposed.


--------------

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

The miner originally sought $8.5 billion. The tribunal 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, said an official at the Justice Ministry who spoke on condition he not be named because he was not authorized to speak to media about the case.

The resulting fine, of nearly $6 billion including the damages award and interest, is equal to about 2% of Pakistan’s GDP and is on a par with a recently agreed upon bailout package for Pakistan from the International Monetary Fund.

Economist Jeffrey Sachs described it as a “mugging” of Pakistan. Other experts also have questioned the reasoning behind huge award, which is more than double the size of the largest similar arbitration award, in the case between Dow Chemical and Kuwait Petrochemical Corp.

Documents explaining the award suggest one intention was to penalize Pakistan for having violated its investment treaty with Australia.

Local consortium proposes to develop #Pakistan #copper & #gold mine at Reko Diq #Balochistan after arbitration. Consortium comprises Arif Habib Limited, Mari Petroleum, Liberty Mills Limited, Fatima group, Lucky group and South Western Mining. #resources https://reut.rs/3om3GNd

A local consortium has made a proposal to develop a major copper and gold mine in southwest Pakistan after a court decision blocked the mine’s development by a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold.

Pakistan’s Supreme Court blocked the joint venture, Tethyan Copper, in 2013 from developing Reko Diq - one of the world’s biggest untapped deposits of copper and gold - following a court case over how the contract had been awarded.

Pakistan’s government was later ordered by a global arbitration body to pay $5.8 billion in damages after Tethyan Copper took it to court.

The local consortium, National Resources Private Limited, said in a statement on Sunday that it had submitted a proposal to develop Reko Diq and another major copper and gold mine, also in Balochistan province.

“The consortium has proposed (to the) government to develop and implement the Tanjeel reserves as a starter project, followed by development of the vast Reko Diq area reserves,” National Resources Private Limited said.

The Balochistan government said it was studying the proposal, the financial aspects of which were not disclosed.

The Reko Diq porphyry copper-gold district, Chagai Belt, Balochistan Province, Pakistan

https://e-sga.org/shop/product-details/?categories_id%5B0%5D=31&...

Reko Diq, located in in the Chagai belt of western Pakistan near the border with Afghanistan and Iran, is one of the world´s largest porphyry Cu-Au districts. The western Chagai belt hosts several porphyry Cu and Cu-Au deposits and prospects, including the clusters at Saindak, Sor Baroot, Koh-Dalil and Reko Diq. Porphyry Cu-Au ± Mo mineralization at Reko Diq is associated with multi-stage intrusions of Miocene calcalkaline, commonly cigar-shape stock and dykes, emplaced into late Oligocene volcanic and sedimentary rocks. The H14-H15 deposit (4,100 Mt at 0.50% Cu and 0.29 g/t Au) is the largest deposit in the district and is characterized by Au-rich, Cu-Fe-sulfide mineralization associated with intense, magnetite-bearing K-silicate alteration. Supergene Cu oxidation and enrichment is weak in the district and is only well preserved in the form of a chalcocite blanket (0.70% Cu) in the central Tanjeel porphyry Cu deposit.

#Tech #economy needs rare earths (#Lithium), and #Afghanistan has got a lot of them. "The #Chinese and the #Pakistanis and the #Russians are very much interested. And China has been dominating the critical, rare strategic metals market for the last decades"https://www.marketplace.org/2021/09/03/afghanistan-has-minerals-tech-economy-needs/

Ryssdal: All right, so make the turn here toward geopolitics for me, and I realize that’s not necessarily your specialty. But if the United States and the U.K. and most of Europe is not in the foreseeable future going to have business dealings with Afghanistan, as it’s run by the Taliban, but the Chinese are and the Russians might, that’s a balance of power thing.

Pitron: The Chinese and the Pakistanis and the Russians are very much interested. And China has been dominating the critical, rare strategic metals market for the last decades. So the fact that this potential is available, at least potentially to the Chinese, shows that after the 19th century, which was dominated by the English with the coal industry, and the 20th century, which was dominated by the Americans, thanks to their domination of the oil industry, then we’re moving to an age of where the Chinese are already controlling the metals industry for the [inaudible] energy revolution.

---------------

The United States has pulled out of Afghanistan. But 11 years ago, Pentagon officials and American geologists discovered nearly $1 trillion in mineral deposits there, including elements and metals that are needed to power the growing tech economy. Lithium, for instance, is key material in making batteries for cellphones, laptops and electric vehicles. Getting those minerals out of the ground and building an industry around them is another issue in a country with deep political and economic instability.

“Marketplace” host Kai Ryssdal spoke with Guillaume Pitron, a French journalist and author of “The Rare Metals War: The Dark Side of Clean Energy and Digital Technologies,” about the geopolitics of rare materials. The following is an edited transcript of their conversation.

Guillaume Pitron: [Afghanistan] is said to be a country where you can find lots of copper, lots of lithium, rare earths elements, platinum, bauxite and other resources of this kind.

Kai Ryssdal: And the net worth, as it were, of those things even in the ground, before we get to actually getting them out of the ground in Afghanistan, the thing that makes it dynamic right now, is that we more than ever depend on those minerals — the lithium and the cobalt and all of that — for batteries and all of the things we need for this economy right now.



Pitron: The energy transition is a metallic transition. we would like to do away with oil and coal. But on the other side, we’ll have to tap into these minerals. And actually, the International Energy Agency, recently this year, published a report saying that our needs for these commodities will explode in the next decades for making the green revolution possible. And Afghanistan has these resources.

The future of Silicon Valley may lie in the mountains of Afghanistan


https://venturebeat.com/2014/03/20/lithium-afghanistan/

United States Geological Survey teams discovered one of the world’s largest untapped reserves of lithium there six years ago (in 2008). The USGS was scouting the volatile country at the behest of the U.S. Department of Defense’s Task Force for Business and Stability Operations. Lithium is a soft metal used to make the lithium-ion and lithium-polymer batteries essential for powering desktop computers, laptops, smartphones, and tablets. And increasingly, electric cars like Tesla’s.

The vast discovery could very well propel Afghanistan — a war-ravaged land with a population of 31 million largely uneducated Pashtuns and Tajiks, and whose primary exports today are opium, hashish, and marijuana — into becoming the world’s next “Saudi Arabia of lithium,” according to an internal Pentagon memo cited by the New York Times.

---------------

Depending on who you talk to, the current lithium global reserves are adequate for at least another generation of lithium-ion battery manufacturers to produce them.

But not everybody thinks so, and some say the light metal compound may someday run dry. That could in turn spell trouble for any company whose business depends on light and portable mobile electronics — unless someone comes up with an alternative to lithium batteries before then.

The experts VentureBeat interviewed pointed to sharp year-on-year increases in the demand for lithium. That’s putting heavy pressure on existing stockpiles.

According to Lithium Americas, a Canadian lithium-mining company with significant business interests in Argentina, lithium demand will more than double in the next 10 years, while lithium prices have nearly quadrupled during the same timeframe.

Tesla, for its part, is in the process of investing up to $5 billion to build its own lithium-ion Gigafactory in Texas, a plant capable of churning out 500,000 expensive battery packs a year by 2020 for its line of zero-emission, all-electric cars.

A Tesla spokeswoman did not return calls seeking comment.

As a potential source to feed that demand, enter Afghanistan.

“At some point, if present trends continue, demand [for lithium] will outstrip the supply. And again, at some point, the market for lithium-ion could get so big that it actually affects the supply chain,” said Donald R. Sadoway, a professor of the Materials Chemistry Department of Materials Science and Engineering at MIT.

Looking at Afghanistan, Sadoway says the war-ravaged nation, which has no effective mining infrastructure in place, may well be attractive to the world’s mining outfits.

“In this regard,” Sadoway, one of the world’s foremost experts on energy sources, says, “the deposits in Afghanistan could be important.”

Andrew Chung, a venture capitalist with Khosla Ventures in Silicon Valley who has invested in multiple startups producing alternative batteries, says lithium-ion batteries are limited in their lifetime cycles, scalability, and cost. Despite this, Chung says, he can understand how the untapped reserves of Afghan lithium are now an increasing focus.

“It is an issue of the supply chain, whether it’s Afghanistan or other [countries]. There is a finite supply, and lithium-ion will continue to be the [power] choice for the next decade,” Chung said.

Some of the Valley’s biggest and most powerful tech companies either declined to comment for this story or never returned calls. But they didn’t deny the importance of lithium-ion batteries.

Taliban rolls out red carpet to China's Belt and Road Initiative - Nikkei Asia


https://asia.nikkei.com/Politics/International-relations/Afghanista...

KARACHI -- With the U.S. departed in disarray, Afghanistan's newly ensconced Taliban regime is looking to China for major investments in the coming six months, but experts expect Beijing to tread a very cautious line.

Zabiullah Mujahid, the Taliban spokesperson, said earlier this week that the new government wants to join the China-Pakistan Economic Corridor, or CPEC, the flagship $50 billion Pakistan component of China's Belt and Road Initiative.

A source with close links to the Taliban told Nikkei Asia on condition of anonymity that China has been courting the Taliban since 2018 on possible projects in Afghanistan. "There are verbal agreements between Beijing and Taliban about investments," he said. "Once the Taliban government gains global recognition, China will start building infrastructure projects in war-torn Afghanistan."

On Wednesday, a virtual meeting of the foreign ministers of Afghanistan's neighbors -- China, Iran, Tajikistan, Turkmenistan, Uzbekistan and Pakistan -- was hosted by Shah Mehmood Qureshi, Pakistan's foreign minister.

"The situation in Afghanistan remains complex and fluid," Qureshi later tweeted. "We hope the political situation stabilizes leading to normalcy soon. The new reality requires us to discard old lenses, develop new insights and proceed with a realistic, pragmatic approach," he said.

During the meeting, China promised emergency aid of $31 million to Afghanistan, including grain, winter supplies, vaccines and medicines. "What China can do now is maintain necessary contacts with the Taliban in the fields of normal economic activities and people-to-people exchanges," reported Global Times, Beijing's English-language mouthpiece.

Andrew Small, a senior trans-Atlantic fellow with the Asia program at the German Marshall Fund, believes the Taliban's immediate investment requests give China leverage. Beijing will provide some immediate economic support, but proceed to greater involvement more gingerly.

"Beijing will be happy to dangle promises and engage in talks on the BRI and CPEC extensions, but will not move ahead with anything on the ground until they are confident of political and security conditions," Small told Nikkei.

Experts note the Taliban's limited investor choices. "It is to be expected that China would be willing to help the Taliban government after the U.S. pulled out of a region that is too important for China to leave alone," Hasaan Khawar, a public policy analyst in Islamabad, told Nikkei.

China is well aware of Afghanistan's vast mineral resources that include the Mes Aynak copper mine, which is reputed to be the second-largest in the world in terms of reserved volume. China Metallurgical Group bought the exploration lease on the massive deposit in 2008 for $3 billion, but work has been stalled for more than a decade because of security concerns. The idle mine is a salutary reminder to China of how big investments can easily fail in such an unstable setting.

"Copper is essential for electric wiring, electronic products, motors and many other products manufactured in China," Jeremy Garlick, assistant professor of international relations at the University of Economics in Prague, told Nikkei. "The Chinese will not rush to put their heads in the lion's mouth -- I would expect them to weigh any decision to get more deeply involved in Afghanistan carefully."

The problem of militancy and the use of Afghan soil as a launchpad for global terrorism is the biggest concern for the global community, including China. Experts believe that unless the Taliban controls this problem, China will be unable to invest -- however much it wants to.

The Pakistan International Airlines (PIA) has performed a successful test flight at a Chinese-built runway in the mineral-rich region of Balochistan’s Saindak town, China Urdu reported.

https://tribune.com.pk/story/2320056/watch-pia-performs-successful-...


The development comes a day after Juzzak Airport in the Chagai district of Balochistan was made operational for flights to and from Karachi mainly for the Chinese engineers working on projects in the region.

Last month, the Parliamentary Committee on China-Pakistan Economic Corridor (CPEC) was informed that the progress on New Gwadar International Airport (NGIA) was on track and it would be fully operational by September 2023.

In a meeting of the committee presided over by Sher Ali Arbab, the Aviation Division secretary told the panel that the project, which was originally expected to be completed by next year, has been postponed till October 2023.

The China Airport Construction Group informed the Pakistan Civil Aviation Authority (PCAA) about the new time limit for the project, deferring the project funded by the Chinese company.

According to the document obtained by The Express Tribune, the passenger terminal building of the project will be completed by June 2023; work related to air traffic control will be completed by March 2023 while the overall construction of the airport will finish by October 2023.

Chinese company allowed exploration in Saindak area

https://www.dawn.com/news/1566257/chinese-company-allowed-explorati...

The Balochistan government has allowed Chinese firm Metrological Construction Company of China (MCC) — registered locally with the name of Saindak Metals Limited (SML) — the exploration and development of East Ore Body in Saindak lease area and the company has been issued an NoC for the purpose.

Official sources said on Monday that the provincial government also extended the contract of MCC/SML for another 15 years under which the company would continue exploration work on East Ore Body site after the expiry of its present contract on Oct 31, 2022. The MCC, working at the Saindak-Gold-cum-Copper Project since 2002, applied the Balochistan Mines and Mineral Department to allow the company to start exploration work on the East Ore Body of Saindak lease area as its exploration work at the present Saindak site had almost finished.

Officials said the contract agreement of the SML/MCC was scheduled to expire on Oct 31, 2022, and the Balochistan chief minister approved it for another 15 years. “The extension of MCC-SML contract would ensure investment of $45 million by MCC/SML at their own risk for exploration and development of East Ore Body in Saindak area,” said an official letter sent to the Ministry of Energy, Petroleum Division.

However, the letter said that the matter of extension of the SML mining lease (valid up to 2025) would be dealt with separately as per provisions of the Balochistan Minerals Rules, 2002.

MCC mining project winning hearts and minds of families in Pakistan

http://epaper.chinadaily.com.cn/a/202105/21/WS60a6fca0a31099a234356...


By promoting the local economy and helping to improve social welfare, China Metallurgical Group Corp, or MCC, is dedicated to becoming a model business in boosting economic cooperation between China and Pakistan.

As a State-owned company in the iron and steel industry, MCC is one of the earliest Chinese companies to operate businesses and projects in Pakistan.

In 1990, MCC managed the construction of the Saindak Copper-Gold Mine based on an engineering, procurement and construction contract-.

The Saindak Copper-Gold Mine was set up by Saindak Metals Ltd, a company owned by the government of Pakistan, at the end of 1995. In 2002, MCC beat the competition in the project bidding and began the first phase of the lease.

Saindak Copper-Gold Mine has made a steady profit for 18 consecutive years, becoming a major driver of local economy and praised by governments on both sides as "a model of China-Pakistan economic cooperation-"-.

Located in Saindak in Chagai district, Balochistan, the project has helped to improve local livelihoods in aspects such as water, electricity, healthcare and education.

To illustrate, Saindak Copper-Gold Mine has tackled problems in water and power supplies for local residents. It offers more than 15,000 cubic meters of purified water and more than 20,000 cu m of raw water for free, at an annual expenditure of over $100,000. It supplies electricity 24/7 for nearby villages free of charge, incurring related cost for the project at $1 million annually.

To date, Saindak Copper-Gold Mine has more than 1,500 Pakistani employees. Every year, MCC assigns its Chinese engineers to conduct skills training.

During the last 18 years, more than 10,000 training sessions of various kinds were held covering approximately 100,000 man-hours. Thousands of Pakistani employees have become skilled through the systematic training. Some of them took their skills out of the project and are contributing to the economic and social advancement of different sectors in Pakistan.

In addition, amid the COVID-19 pandemic, MCC actively played its part in contributing medical supplies for Pakistanis and maintained steady production in 2020.

Apart from providing anti-pandemic materials, MCC also organized charity events to assist disadvantaged households in Balochistan-last year. It helped more than 3,000 needy families in Chagai district and 300 families in six local villages by sending daily necessities such as flour, rice and cooking oil.

Such moves have been appreciated by local people and are part of MCC's effort to fulfill corporate social responsibility as a State-owned enterprise-.

Under the support of the two countries' governments, MCC will continue to cooperate with Pakistani people and build closer partnerships between the two sides.

Ovais
@Sabbandkardo
One more record for CY 2021 was Pakistan copper exports which touched 717m$ in CY 2021.
Pakistan Copper exports increased more than 3 times since 2018 from 233m$ to 717m$ .

https://twitter.com/Sabbandkardo/status/1490256306611298305?s=20&am...

The average annual copper price is forecast to drop by 6% y-o-y to $8,800 per tonne this year. Boosting supply in the global copper ore market is to push prices down while the worldwide demand languishes with slowed construction activity in China.

https://finance.yahoo.com/news/copper-prices-drop-6-2022-092200072....

In 2020, approx. 1.7M tonnes of copper were exported worldwide, growing by 16% compared with 2019 figures. In value terms, supplies surged to $11.1B.

Zambia represented the major exporter of copper globally, with the volume of exports amounting to 675K tonnes, which was nearly 40% of total supplies. Chile (283K tonnes) ranks second with a 17% share, followed by Bulgaria (7.1%) and the Democratic Republic of the Congo (5%). Belgium (76K tonnes), Namibia (61K tonnes), Spain (56K tonnes), Slovakia (55K tonnes), South Africa (52K tonnes), Pakistan (38K tonnes), the Philippines (34K tonnes) and South Korea (31K tonnes) were a long way behind the leaders.

In value terms, Zambia ($4.2B) remains the largest copper supplier, comprising 38% of global exports. The second position in the ranking was occupied by Chile ($1.7B), with a 16% share of total supplies. It was followed by Bulgaria, with a 9.4% share.

Barrick Gold Corporation (GOLD) Q4 2021 Earnings Call Transcript


https://www.fool.com/earnings/call-transcripts/2022/02/16/barrick-g...


Tanya Jakusconek -- Scotiabank -- Analyst

OK. And just my last question, if I could, just on your copper strategy. Just wanted to understand a little bit how Reko Diq fits into that strategy and just where we are on this asset?

Mark Bristow -- Chief Executive Officer

So right now, the asset that we have is the arbitration award of which we share with Antofagasta and ourselves, Barrick. We are working and have been in its general knowledge in the spirit of Barrick philosophy of how we can convert that into something that's more meaningful. And that's something that doesn't end up with the Pakistan government having to write out a big check without any benefits. And Reko Diq is an opportunity that we've been working on whereby everyone will benefit.

Our shareholders, of course, and same with the Balochistan government and the Pakistan government. And that's really where I would want to stop it because there's still a lot of work and water to flow under the bridge, but that's the tactic. And as I said, and I think I told Greg at this conference that it's a real asset. And we would like as miners to convert that into our mining asset.

It's one of the better ones around. Otherwise, we end up in conflict and that's not a good thing to do with your host country or potential host country.

Tanya Jakusconek -- Scotiabank -- Analyst

OK. So is it fair to say that this is a ways out in terms of fitting into your 10-year pipeline?

Mark Bristow -- Chief Executive Officer

It would be fantastic in our 10-year pipeline. It's a real deal.

Graham Shuttleworth -- Senior Executive Vice-President, Chief Financial Officer

But it's not in our 10-year pipeline.

Mark Bristow -- Chief Executive Officer

But it's not in -- yes, sorry, it's not in our 10-year pipeline right now.

Tanya Jakusconek -- Scotiabank -- Analyst

I understand that. But in terms of resolving everything and then probably having a feasibility study and other stuff in country, would you be able to even fit it into your 10-year pipeline?

Mark Bristow -- Chief Executive Officer

Sure. Absolutely.

Tanya Jakusconek -- Scotiabank -- Analyst

OK. Great. Thank you.

Mark Bristow -- Chief Executive Officer

Thanks, Tanya.

Operator

Our next question is from Mike Parkin with National Bank Financial. Please go ahead.

Mike Parkin -- National Bank Financial -- Analyst

Hey, guys. Congrats on the good quarter. Just a question with respect to the performance dividend. Does that indicate kind of a comfort level with carrying debt on the balance sheet? Or are you agnostic to where the debt is given that performance dividend is linked to the net cash position?

Mark Bristow -- Chief Executive Officer

So I think you've just answered your own question, Mark. Net cash means there's no net debt. And so the way it's designed is that if we have -- because what we've done initially is our debt to pay it all up is expensive. Hopefully, it gets cheaper and cheaper with the growing interest rates.

But we've offset it. We've got cash balancing the debt. And what we've said is anything above 0. So from zero to $500 million net cash payout of $0.05 dividend and then $500 million to $1 billion and $1 billion to $1.5 billion.

And so that's -- and what it does is it's -- it really is -- it's a nonnegotiable process because if we're investing heavily in a big project, for example, and we drive -- we increased the net debt to fund that. Then we are investing our shareholders' money into that project. And given our return criteria, we think most -- in fact, more than most of our shareholders would support that. If we don't and we build cash on the balance sheet, we make sure that we don't create an easy balance sheet and that on a formulaic basis money goes back to shareholders.

Details about Reko Diq to be disclosed soon: CM Bizenjo

https://www.dawn.com/news/1668769

CHAGAI: Balochistan Chief Minister Mir Abdul Qudoos Bizenjo said on Monday that details with facts and figures about Reko Diq copper and gold mining project would be disclosed soon.

Talking to local journalists outside Dalbandin airport along with Balochistan Governor Zahoor Ahmed Agha and Rakhshan Division Commissioner Saifullah Khetran, Mr Bizenjo said that for the first time a detailed briefing about Reko Diq project was conducted for the elected representatives of Balochistan at the provincial assembly.

He was referring to a Balochistan Assembly session held last month in which lawmakers from the opposition and treasury benches were given an in-camera briefing on the Reko Diq copper and gold mining project.

In 2019, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to pay damages of $5.84 billion to Tethyan Copper — a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold — for blocking Tethyan from developing the asset after it had already sunk more than $220 million into the project.

“As we know that we have lost the Reko Diq case in the international court. Therefore, striking a bargain is not easy, but we are trying our best to gain maximum share for Balochistan in this regard,” the chief minister said.

The share of Balochistan in the previous agreement was 25 per cent despite investment by the provincial government, Mr Bizenjo said, adding that the province would get a good share in the upcoming proposed agreement and without having to make an investment.

The chief minister said it had been proposed that the companies involved in Reko Diq project would spend Rs30 to 40 billion during three years for the development of Chagai district besides billions of rupees that would come under the head of corporate social responsibility.

Answering a question, Mr Bizenjo said his government had removed several unnecessary check-posts on highways and more would be removed soon. He also asked the commissioner to remove speed breakers and rooms made for security check-posts constructed on and alongside the main highway.

He also warned that the commissioner, deputy inspector general of police, deputy commissioner, assistant commissioner and tehsildar would be suspended if a security man is found taking bribes at a check-post.

On a lack of healthcare facilities in the district headquarters hospital, he said that all district health officials were directed to purchase medicines and appoint doctors on a contract basis to facilitate the masses.

Barrick said Reko Diq could now be in production within five to six years. It said the deal would be the springboard for exploring the surrounding area for more reserves.

https://www.wsj.com/articles/pakistan-reaches-deal-with-mining-comp...

Two mining companies resolved a decadelong dispute with Pakistan, officials said, in a deal that will restart work on a giant copper mine and spare the country from having to pay billions in compensation.

Canada’s Barrick Gold Corp. and Chile’s Antofagasta PLC had stopped preliminary work in 2011 when Pakistani authorities refused to grant them a mining license to develop the Reko Diq mine, located in the poor and sparsely populated western province of Balochistan.

Under the agreement, Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government. Barrick and Pakistan will split ownership of the mine evenly.

The new deal will represent the largest single investment in the country, Pakistani officials said Sunday, with Barrick and Pakistan investing around $10 billion.

China has invested more than $20 billion in recent years, but that is spread over multiple projects and is the result of a deal between governments of the two countries, rather than an investment from the private sector.

The Reko Diq investment will include about $1 billion in spending on roads, schools and hospitals in the province, as well as creating a technical training institute for mining, Pakistan said. The project is expected to create about 8,000 jobs.

“We always have to keep going back to the IMF because we run short of dollars. Now we’ve taken a big step toward being able to stand on our own two feet,” said Pakistan’s prime minister, Imran Khan, referring to the country’s recurring debt troubles and the International Monetary Fund.

The two companies originally took the case to international arbitration after Pakistani authorities took away their mining licenses in 2011, saying they had rejected a feasibility study by the companies.

The arbitration panel, working under the World Bank, in 2019 ruled against Pakistan, awarding $6 billion in compensation for future earnings of the mine, which was equivalent at the time to around 2% of the country’s gross domestic product, and enough to wipe out much of Pakistan’s foreign-exchange reserves.

The finance minister, Shaukat Tarin, said Sunday that if Pakistan hadn’t reached a settlement, it would have had to pay $11 billion in compensation to the companies, including interest on the unpaid 2019 award, and a further arbitration panel finding that would have gone against Pakistan. If unable to pay, the country’s overseas assets would have also been frozen, he said.

Barrick said Reko Diq could now be in production within five to six years. It said the deal would be the springboard for exploring the surrounding area for more reserves.

Antofagasta said that it decided not to participate in the reconstituted project as the company’s growth strategy is focused on the production of copper and byproducts in the Americas.

According to details (of the agreement between Pakistan and Barrick Gold), Pakistan and TCC agreed to divide shares with each side getting 50 percent of them. Pertinent to mention, Pakistan had a stake of 25 percent in the previous deal.

https://www.globalvillagespace.com/breakthrough-pakistan-to-get-50-share-in-reko-diq/

Sources claim that Pakistan and TCC will most likely sign the deal in February. If finalized, the deal will avert the threat of imposition of a $10 billion dollar fine on Pakistan.

-------------------

Sources revealed to The Express Tribune that the project’s development would result in an investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs.

“This project shall make Balochistan the largest recipient of foreign direct investment in Pakistan and the Reko Diq project shall be one of the largest copper and gold mining projects in the world”, sources added.

50 per cent of the new project’s shares will be owned by Barrick Gold, while the remaining shares shall be owned by Pakistan, divided equally between the federal government and the provincial government of Balochistan.

The federal government’s shares of 25% shall be divided equally amongst three state-owned entities (SOE), namely Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL).

-----------------

The reconstituted project will be held 50% by Barrick and 50% by Pakistan stakeholders, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties.

https://www.barrick.com/English/news/news-details/2022/barrick-pakistan-and-balochistan-agree-in-principle-to-restart-reko-diq-project/default.aspx

Barrick will be the operator of the project which will be granted a mining lease, exploration licence, surface rights and a mineral agreement stabilizing the fiscal regime applicable to the project for a specified period. The process to finalize and approve definitive agreements, including the stabilization of the fiscal regime pursuant to the mineral agreement, will be fully transparent and involve the federal and provincial governments, as well as the Supreme Court of Pakistan. If the definitive agreements are executed and the conditions to closing are satisfied, the project will be reconstituted including the resolution of the damages originally awarded by the International Centre for the Settlement of Investment Disputes and disputed in the International Chamber of Commerce.

Barrick Gold Corporation - Reko Diq Alliance Between Pakistan and Barrick Set to Create Long-Term Value


https://www.barrick.com/English/news/news-details/2022/reko-diq-all...

Subject to the updated feasibility study, Reko Diq is envisaged as a conventional open pit and milling operation, producing a high-quality copper-gold concentrate. It will be constructed in two phases, starting with a plant that will be able to process approximately 40 million tonnes of ore per annum which could be doubled in five years. With its unique combination of large scale, low strip and good grade, Reko Diq will be a multi-generational mine with a life of at least 40 years. During peak construction the project is expected to employ 7,500 people and once in production it will create 4,000 long-term jobs. Barrick’s policy of prioritizing local employment and suppliers will have a positive impact on the downstream economy.

-----------------

ISLAMABAD, PAKISTAN – Finance Minister Miftah Ismail and Barrick president and chief executive Mark Bristow said after their meeting here today that they shared a clear vision of the national strategic importance of the Reko Diq copper-gold project and were committed to developing it as a world-class mine that would create value for the country and its people through multiple generations.

Reko Diq is one of the world’s largest undeveloped copper-gold deposits. An agreement in principle reached between the government of Pakistan, the provincial government of Balochistan and Barrick earlier this year provides for the reconstitution and restart of the project, which has been on hold since 2011. It will be operated by Barrick and owned 50% by Barrick, 25% by the Balochistan Provincial Government and 25% by Pakistani state-owned enterprises.

The definitive agreements underlying the framework agreement are currently being finalized by teams from Barrick and Pakistan. Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow that with first production of copper and gold expected in 2027/2028.

“During the negotiations the federal government and Barrick confirmed that Balochistan and its people should receive their fair share of the benefits as part of the Pakistan ownership group,” Bristow said.

“At Barrick we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities. At Reko Diq, Balochistan’s shareholding will be fully funded by the project and the Federal Government, allowing the province to reap the dividends, royalties and other benefits of its 25% ownership without having to contribute financially to the project’s construction or operation. It’s equally important that Balochistan and its people should see these benefits from day one. Even before construction starts, when the legalization process has been completed we will implement a range of social development programs, supported by an upfront commitment to the improvement of healthcare, education, food security and the provision of potable water in a region where the groundwater has a high saline content.”

Finance Minister Ismail said the development of Reko Diq represented the largest direct foreign investment in Balochistan and one of the largest in Pakistan.

“Like Barrick, we believe that the future of mining lies in mutually beneficial partnerships between host countries and world-class mining companies. The Reko Diq agreement exemplifies this philosophy and also signals to the international community that Pakistan is open for business,” he said.

REMs – the most precious commodities
Pakistan should hire experts, finance rare earth metal projects through budget


https://tribune.com.pk/story/2207557/rems-precious-commodities


REMs constitute a group of 17 elements that occur together in the periodic table, including yttrium and 15 lanthanides. The use of REMs within industrial sectors is both high stakes and high wager.

These sectors include defence, electronics, medicinal, industrial, automotive, etc and they are used in specialised applications such as aircraft engines, nuclear batteries, lasers, magnets, optic fibres, high-strength alloys, superconductors, storage disks, signal amplifiers, to name a few.

------------

REMs deposits in Pakistan have been discovered in Khyber-Pakhtunkhwa (Koga, Tarbela, Jawar), Gilgit-Baltistan (Gilgit, Skardu), and Balochistan (Reko Diq, Chagai, Saindak).

Initial geochemical analysis showed that 12 out of 17 REMs had been found with varying potential. Still, the exact size is yet to be determined and required an in-depth exploration study. REMs are the most precious commodities today and Pakistan needs to place maximum bets on it to cash in on the opportunities. Realistically, Pakistan is not a manufacturing or a processing country, hence, it should earmark the commerce potential with both revenue from sales and barter trade.

Due to REMs strategic importance, an organisational setup should be put in place, under the prime minister, and in close collaboration with supporting arms of armed forces and Pakistan Atomic Energy Commission.

The entire exercise can be done in stages with exploration, extraction, ramp-up production and global marketing with mass production over a five-year timeline.

Experts should be freshly hired or may be brought from different government departments (Geological Survey of Pakistan, Survey of Pakistan, Khan Laboratories, etc), including geologists, radiometric surveyors, drilling/smelting specialists, and security experts.

The project financing should come from the national budget under the ambit of “special strategic projects”. The global REMs market is valued at $10 billion with an 8-10% CAGR and production of 170,000 tons per annum by 2022. If Pakistan secures 2-5% of this market share – with annual output of 3,500-8,500 tons, it can inject $1-2 billion per year into the national pocket over the next five to seven years.

This could change Pakistan’s international status as a high-value player at a high stakes table in the global arena.

The writer is a PhD in Engineering from the University of Cambridge, United Kingdom. He currently serves as Vice President of Core Group in Pakistan

Barrick Gold strikes final deal with Pakistan for Reko Diq project
Published by Joe Toft, Editorial Assistant
Global Mining Review

https://www.globalminingreview.com/mining/30122022/barrick-gold-str...

Barrick Gold Corporationhas announced that it has completed the reconstitution of the Reko Diq project, having received a favourable 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 first production,” Bristow said.

“With its unique combination of large scale, low strip and good grade, Reko Diq is expected to have a life of at least 40 years. We envisage a truck-and-shovel open cast 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 tpy.

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 prioritising 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 US$70 million over the feasibility and construction period. In addition, Reko Diq will advance royalties to the government of Balochistan of up to US$50 million until commercial production starts.”

During peak construction the project is expected to employ 7500 people and once in production it will create around 4000 long-term jobs. As elsewhere in the group, Barrick prioritises 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.

Surging demand for copper means its price is rising too

https://www.marketplace.org/2023/01/24/surging-demand-for-copper-me...

The world cannot seem to get enough copper. This metal is mined in places as disparate as China, the Democratic Republic of Congo and Utah.

Copper prices have risen around 10% since the start of this year, in part because the metal is crucial to renewable energy technology and the transition away from fossil fuels.

Copper is often referred to as “Dr. Copper,” because it’s considered a barometer for the health of the global economy.

Traders like to play off that saying, according to Bobby Iaccino, co-founder of Path Trading Partners.

“They say copper has a Ph.D. in economics,” he said. “That still doesn’t really explain it, OK? So anywhere where there’s electricity, there’s copper usage.”

Demand for copper is especially high now as the market for renewable energy expands, said Michael Klare, a professor emeritus at Hampshire College.

“You’re going to need a lot more copper for wiring to connect various sources of renewable energy — wind farms and solar farms — to wherever you’re going to use the renewable energy,” Klare said.

And in electric vehicles, the amount of copper needed can be more than double what’s used to make traditional gas-powered vehicles.

This year’s surge in copper prices is in part due to China and its emergence from pandemic-related shutdowns, said Rohan Reddy, director of research at Global X ETFs.

“China makes up about half of all global copper demand. So typically, there’s a saying, ‘As China goes, so does copper,'” Reddy said.

That’s the other copper adage you’ll hear a lot — and one that seems to be holding true. The question now is what happens next in China, said Bart Melek, global head of commodity strategy for TD Securities.

“We continue to see a very significant amount of infections in that country,” Melek said. “And that is something that will take time to work its way through.”

That’s why Melek’s call on copper for the coming months is relatively cautious. Rising interest rates, a potential global economic slowdown — all of it, he said, could take the shine off copper demand.

Lithium, fresh silver lining on economic horizon of Pakistan
By Yasir Masood | Gwadar ProDec 12, 2022

https://gwadarpro.pk/1602212868140138497/lithium-fresh-silver-linin...


Pakistan possesses substantial lithium reserves. According to the Metal Mining Agency of Japan, these reserves may fulfil global demand for nearly 500 years. With China and India, two of Pakistan's major trading partners, investing extensively in electric vehicles (EVs), Pakistan has a significant chance of becoming a bigsupplier and a major consumer of this essential commodity.

“Given the existence of favorable geological environments in Pakistan which are found elsewhere for the occurrence of Lithium on a global level, Balochistan, KPK, and GB Provinces have been identified as target areas for finding this commodity in substantial quantities”, said Mr. Muhammad Yaqoob Shah, ex-General Manager (Geology) Pakistan Mineral Development Corporation Islamabad.

Pakistan is sitting on a gold mine


https://english.almayadeen.net/articles/analysis/pakistan-is-sittin...


The Reko Diq mine, renowned for its massive gold and copper deposits, is thought to contain the fifth-largest gold deposit in the world.


Reko Diq is a small desert village in the Balochistan district of Chagai, 70 kilometers northwest of Naukundi and close to Pakistan's border with Iran and Afghanistan. This region is situated within the Tethyan belt, which extends from Turkey and Iran to Pakistan. Reko Diq, which in Balochi means "sandy mountain," is also the name of an extinct volcano.

The Reko Diq mine, renowned for its massive gold and copper deposits, is thought to contain the fifth-largest gold deposit in the world. The mine is in a small desert area in the northeast of Balochistan, near the border with Iran and Afghanistan.

600,000 tons of concentrate produce an estimated 200,000 tons of copper and 250,000 ounces of gold on a yearly basis. The annual profit from the mines is estimated by the TCC to be approximately $1.14 billion for copper and $2.50 billion for gold, totaling $3.64 billion annually. Independent estimates suggest the number is as high as $500 billion, which is significantly higher than the TCC's estimation of $200 billion.

Rich lode of EV metals could boost Taliban and its new Chinese partners
The Pentagon dubbed Afghanistan ‘the Saudi Arabia of lithium.’ Now, it is American rivals that are angling to exploit those coveted reserves.

https://www.washingtonpost.com/world/interactive/2023/ev-lithium-af...

In interviews, Taliban officials, Chinese entrepreneurs and their Afghan intermediaries described a frenzy reminiscent of a 19th-century gold rush. Globe-trotting Chinese traders packed into Kabul’s hotels, racing to source lithium in the hinterlands. Chinese executives filed into meetings with Taliban leaders, angling for exploration rights. In January, Taliban officials arrested a Chinese businessman for allegedly smuggling 1,000 tons of lithium ore from Konar province to China via Pakistan.


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In late 2021, Yu recalled, he saw an influx of Chinese seeking opportunities in Afghanistan’s postwar vacuum, just as he did 20 years earlier. Within months, according to Yu and other Chinese residents, more than 300 of their compatriots had descended on Kabul. Some carried passports from Pakistan, Sierra Leone or other countries where they had immigrated to mine. Others showed up carrying a few packs of instant noodles in their backpacks, “wanting to get into the battery business,” Yu recalled.

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These days, a small, dedicated group of Chinese miners is still in Kabul waiting for the lithium trade to resume.

One of them is Yue, a gruff, chain-smoking native of Manchuria who has mined in Pakistan, Russia and Indonesia. He came to Afghanistan in late 2021 and plans to stay, he explained, because the Taliban is working hard to ensure foreigners’ security and even assigned him his own bodyguards. Afghanistan’s mineral potential is too great to walk away from, he added.
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But now, in a great twist of modern Afghan history, it is the Taliban — which overthrew the U.S.-backed government two years ago — that is finally looking to exploit those vast lithium reserves, at a time when the soaring global popularity of electric vehicles is spurring an urgent need for the mineral, a vital ingredient in their batteries. By 2040, demand for lithium could rise 40-fold from 2020 levels, according to the International Energy Agency.

Afghanistan remains under intense international pressure — isolated politically and saddled with U.S. and multilateral sanctions because of human rights concerns, in particular the repression of women, and Taliban links to terrorism. The tremendous promise of lithium, however, could frustrate Western efforts to squeeze the Taliban into changing its extremist ways. And with the United States absent from Afghanistan, it is Chinese companies that are now aggressively positioning themselves to reap a windfall from lithium here — and, in doing so, further tighten China’s grasp on much of the global supply chain for EV minerals.

The surging demand for lithium is part of a worldwide scramble for a variety of metals used in the manufacture of EVs, widely considered crucial to the green-energy transition. But the mining and processing of minerals such as nickel, cobalt and manganese often come with unintended consequences — for instance, harm to workers, surrounding communities and the environment. In Afghanistan, those consequences look to be geopolitical: the potential enrichment of the largely shunned Taliban and another leg up for China in a fierce, strategic competition.

Reko Diq #Copper Mine in #Pakistan's #Balochistan has potential to be one of world’s biggest suppliers of metal needed for transition to clean #energy. #Canada's Barrick is investing in it. #SaudiArabia's #investment fund has also expressed interest. https://www.ft.com/content/7a1db3cf-a61b-4ef5-b90d-ea98fe530295


“Reko Diq is one of the bigger copper-gold undeveloped projects in the world,” said Mark Bristow, chief executive of Barrick, which aims to start mining in 2028 subject to an ongoing feasibility study. “It’s a very big deal. Any copper mine right now is a big deal.”

The project highlights how the copper shortfall is pushing miners into ever trickier markets in search of supply. Pakistan’s repeated political and economic crises have scared away all but the most determined foreign investors, and local authorities had blocked an earlier attempt involving Barrick to mine Reko Diq.


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Bristow argues that the project, in which Barrick has a 50 per cent stake alongside the Pakistan and Balochistan governments, will bring much-needed development to the region.

“Mining, when it goes into emerging markets, is obsessed with getting its money back,” he said. “We’ve learned that you start paying benefits and dividends early on.”

As countries transition to clean energy sources, copper — whose conductive properties make it crucial to transporting electricity — is only expected to become more important to the global economy.

But with supply from incumbent mines in countries such as Chile and Peru stalling, an estimated $118bn of investment by 2030 is needed to plug a supply gap that will by next decade be equivalent to 35 Reko Diq-sized projects, according to analysts at CRU Group.


Th a record of operating in riskier markets such as Mali and the Democratic Republic of Congo.

While Reko Diq adds “a lot of uncertainty” for Barrick investors, “Barrick is no stranger to frontier jurisdictions”, said Canaccord Genuity analyst Carey MacRury.

Another factor that could help steer the Reko Diq project is the presence of a new investor. Saudi Arabia’s Public Investment Fund and state mining company Ma’aden have expressed interest in a stake. Analysts said the involvement of one of Pakistan’s most important allies would help shield the project from future political U-turns.

If successful, the mine could turn the company into one of the world’s largest copper producers. Diversifying its portfolio into copper is particularly important for gold miners such as Barrick to stay relevant with investors focused on environmental, social and governance issues, since the company’s core product plays no role in the energy transition.

Reko Diq sits along the largely untapped south Asian leg of a rock formation from Europe to south-east Asia that is believed to hold rich copper deposits. Analysts believe there is the potential for more mines.

Ahsan Iqbal, who recently stepped down as Pakistan’s planning minister and worked on the project, argued that Reko Diq would “put Balochistan on the mining map of the world”.

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Reko Diq “is 50 miles from Afghanistan and 40 miles from Iran”, one person involved with the project said. “So it will be a target.”

For support, Barrick has turned to Pakistan’s powerful army, which helps control the country’s politics and helped negotiate last year’s deal to revive the project, according to a person involved.

Pakistan’s army chief also this month attended a local mining conference alongside Bristow. “The military are a steadying hand,” Bristow said. “They are absolutely essential on the security side.”

Yet rights groups have repeatedly accused the army of abuses in Balochistan, including extrajudicial executions, allegations it denies.

Bristow has welcomed the potential Saudi interest in Reko Diq and dismissed hand-wringing over whether he can see through the project.

“When you look at the world, it is more complex than when I started,” he said. “Gone are the days that you can control a mining company from a multistorey, cushy building in the developed world.”