Balochistan has a variety of sizable and valuable mineral deposits including gold, silver, copper, iron, chromite and lithium in more than 1,600 mines
Pakistan is blessed with a variety of terrains, all four seasons and a vast sea. Since 1947, we have called ourselves an agricultural country, but over the years food became scarce because of negligence and various other factors. Apart from agriculture, our geographical location offers us a diversity in landscapes. On one side, we have landmasses suitable for harvesting, then on the other side, there are valuables hidden in the rugged mountainous regions. Likewise, beside a 1,000-km long coast, unseen treasures in the deep blue sea are waiting to be reconnoitered. Every province of Pakistan offers immense potential because of its topography. From north to south, Pakistan has a treasure trove of natural wealth which we have not been able to tap.
Balochistan — the country’s largest province — has less population, but it is rich in mines, minerals and other precious reserves. The Balochistan coast also offers promising serendipity. Now at a stage, when our economy needs an overhaul, there is a need to capitalize on the destined prosperity that we own. According to official sources, Balochistan has a variety of sizable and valuable mineral deposits including gold, silver, copper, iron, chromite and lithium in more than 1,600 mines. An estimated 500 coal mines, 600 mining venues of Onyx/Marble, 91 mines of Iron and approximately 550 mines for Chromite, Antimony, Fluoride, Granite and Gabbro are existing in this province. Reko Diq and Saindak, both in District Chaghi of Balochistan, have major gold and copper deposits and have attained worldwide attention. The areas are part of Tehthyan Magmatic Arc belt which spreads from Western Europe to South East Asia.
The Saindak Copper-Gold Mine is located near the town of Saindak and the deposits at Saindak were discovered back in the 1970s in collaboration with a Chinese engineering firm. The Saindak mine has total estimated reserves of 412 million tons, of which, an estimated 1.69 million tons are mineable. Saindak has the capacity of producing roughly 15,800 tons of copper blister, 1.47 tons of gold and 2.76 tons of silver. For the purposes of mining, the Saindak Copper-Gold Project was set up by Saindak Metals Ltd (SML), a company fully owned by the Government of Pakistan, at the end 1995 with a cost 13.5 billion rupees. However, in 2002, in order to revive the project, Pakistan and China signed a formal contract the same year worth $350 million for the development of Saindak Copper-Gold mine. The contract between SML and China’s MCC Resources Development Co. Ltd. (MRDL) expired in October 2012, but was extended for a 5-year period till October, 2017. It was then again extended for another five years till October 30, 2022. Now it has been given an extension up to 2035. As per agreement, 49% of revenues from the mine go to MCC-Metallurgical Construction Corporation of China, while 51% of it goes to the government of Balochistan and 6.5 % as the royalty.
Reko Diq represents one of the largest copper and gold reserves in the world having estimated reserves of 5.9 billion tons of ore grading, 0.41% copper and gold reserves amounting to 41.5 million ounces, and a mining life of at least 40 years. As regards to Reko Diq, in 1993 Broken Hill Proprietary Company (BHP) Australia and Balochistan Development Authority (BDA) signed an agreement titled Chaghi Hills Exploration Joint Venture Agreement (CHEJVA). In 2006, Tethyan Copper Company (TCC) acquired the project of Barrick & Antofagasta. The Supreme Court in 2011 declared CHEJVA illegal, the Balochistan government then refused the Mining Lease and the matter later went into international litigation. A settlement was reached in 2022 between all parties. As a consequence, Barrick Gold acquired the mining leases and exploration license, and started exploration. It has incurred the Government of Balochistan 33% of the total financial benefits of the project with $32 billion over the project life.Apart from socio-economic uplift of the area,8,000 job opportunities in the development phase and 3000 in production phase are created.
Although slowly and gradually work is on for the development of Balochistan in terms of mining and minerals exploration, there are several hurdles, which must be taken care of immediately. These include lack of first-hand geological data, receipt of small revenue, outstanding dues against the mining companies, law and order conditions, incapacitation of expertise and lack of infrastructure in mining areas. It is important to highlight that local mine owners because of lack of technical and on ground knowledge and expertise, sublet mines to the non-technical persons which further makes halt in the exploration processes. Thus, there is a dire need to devise a comprehensive strategy based on modern practices in the mining sector immediately to reap benefits. There should be more large-scale mining undertaken instead of smaller pockets. Geological data should be readily available to authenticate mining efforts as secondary data doesn’t appeal to mining investors. The government must focus on joint ventures between public and private entities. Companies involved in mining should be bound to invest in Corporate Social Responsibility (CSR). Many profit generating areas in Pakistan are facing economic crunch, but for the mining sector if there are outstanding dues against the mining companies and contractors and concerned departments are unable to meet the revenue targets, a strict action should be taken against defaulters, including heavy fines or cancellation of permits.
One important observation noted in the mining sector is the lack of human capital with non-expertise in procurement of services, evaluation of tenders, contract agreement procedures and exploration which lead to further delay in maximum utilization of projects. Pakistan has the largest youth bulge but we are unable to divert them towards technical education and skill-based training. Hiring experts, be they local or foreigner, in international law, administration, engineers, geologists, scientists, digital and technical specialists and getting our youth trained by them can help in bridging the gap, apart from their capacity enhancement. Modern mining legislation must be taken into consideration. Enabling the environment in terms of safety and security for investors, while overcoming our bureaucratic hurdles between the federal and provincial governments can be a good omen for mining sector development in Pakistan particularly in Balochistan.
Despite having mega ventures in our country like CPEC, the element of sea-blindness is prevalent in the mineral sector too. Pakistan has 16,650 million barrels of oil-equivalent gas reserves worth $14,000 million and 4.4 million tonnes of mineral deposits in our sea but untapped. Essentially, we have remained unable to exploit it primarily owing to our lack of resource mapping and relying on foreign scientific exploration services. Hence, there should be an imperative call for action to streamline enablers of the economy, chalk out maximum benefits for the locals and carve a better future for people of Balochistan-real owners!
(The writer is Communication Strategist at the Institute of Regional Studies and can be reached at firstname.lastname@example.org)