Reko Diq fiasco

Reko Diq fiasco

The Supreme Court (SC) in its reserved judgement in the Reko Diq case has through a short order held the original agreement to explore and later mine the copper and gold reserves in the area null and void, and as a consequence, all later agreements stemming from the original one.

The Balochistan government had signed a Chaghai Hills Exploration Joint Venture Agreement (CHEJVA) with Australian mining group Broken Hill Propriety (BHP) in 1993 when a caretaker government under Moeen Qureshi at the Centre and Mohammad Nasir Mengal in Balochistan was in office. The appropriateness of a caretaker government signing such a far reaching deal regarding a precious natural resource is certainly questionable, but this seems to have been a repeated pattern ever since. In 2002, when governor’s rule existed in Balochistan before the elections under Musharraf that year, the Governor, Justice (retd) Amir-ul-Mulk Mengal signed an addendum to CHEJVA to overcome certain legal lacunae that stood in the way of BHP’s successor company Tethyan Copper Co (TCC) acquiring assignment of the interest of the parties to CHEJVA.

The original 1993 CHEJVA, an addendum to the exploration agreement of March 2000, an option agreement of April 2000 and a novation agreement of April 2006 have all been found “illegal, void and non est” on the touchstone of the Mineral Development Act 1948, the Mining Concession Rules 1970 framed under it, the Contract Act 1872 and the Transfer of Property Act 1882. The judgement can only be welcomed since all this skullduggery and bending of the laws and rules seems to be typical of the manner in which the mineral wealth of Balochistan has been handled since independence. Nothing, no law, no rule, seems to stand in the way of concessions to foreign interests and their local collaborators in selling the natural resources of the poorest province of Pakistan for a song. This has led Baloch nationalists to bitterly oppose such blatant exploitation and appropriation of the rights of the people of the province over their natural resources.

One only has to cast one’s mind over the sorry history of Sui gas, the Saindak copper and gold project, Gwadar Port and sundry others to understand the depth of bitterness generated amongst generation after generation of the Baloch since independence at the ‘internal colonialist’ policies they have been subjected to. Unfortunately, instances of redress or compensating for past wrongs too have been conspicuous by their absence in the case of Balochistan. Hence the current Baloch generation’s veering towards separatism, having given up hope of justice or equity from the state.

To return to Reko Diq, a few facts will highlight the literal gold mine it represents. Reko Diq lies in Chaghai District, 70 kilometres northeast of Naukundi, close to the confluence of the Afghanistan and Iran borders. The desert site is estimated to hold 5.9 billion tons of copper ore, of which 2.2 billion tons is considered mineable. This would yield 200,000 tonnes of copper and 250,000 ounces of gold per annum. Estimates of the value of the deposits vary according to the fluctuations in the price of copper and gold, but the lowest estimate is a worth of $ 3.3 billion and rising because of price escalation in the international market.

The struck down agreement between the Balochistan government and TCC gave the former a 25 percent stake and the latter the remaining 75 percent. Baloch anger over one more instance of the exploitation by outsiders (foreign and other provinces of Pakistan) of its natural resources had been rising since 2010 and eventually dragged Aslam Raisani’s government into the ‘nationalist’ camp. Now, after the original and later agreements have been declared null and void by the SC, certain questions linger.

First, what effect will the SC decision have on the international arbitration proceedings initiated by TTC and what will be the fallout on foreign investment in Pakistan as a whole? Second, lacking the finance and expertise, how will the Balochistan or federal government develop the Reko Diq reserves of copper and gold? The weight of the SC decision has come down on the side of Pakistani and Baloch interests, as it should. But what follows will be interesting to watch. Dr Samar Mubarakmand, our prominent nuclear scientist, has been offering his services all over the place, first for the Thar coal project (his underground gasification proposal having proved unfeasible by now) and now the Reko Diq copper and gold project. With due respect, nuclear science is a different discipline from mining.

What the Balochistan and federal governments should do is seek finance and expertise internationally, but this time sign agreements in an open, transparent manner according to the laws and rules of the land and best international practice, and that too not by any interim or caretaker setup, but by a government mandated by the people to do so while upholding the interests of the local people of the area, province, and country. Are we capable of getting this right? Given the track record revealed by the SC case, it remains to be seen. – DailyTimes