The PTI-led federal government has reached a settlement with the multinational company Barrick Gold which had won a potentially crippling $6.5 billion arbitration award over the Supreme Court’s cancellation of the Reko Diq mining project. The Reko Diq mining project is located in Balochistan’s Chaghi district.
The project, once it enters the production stage five to six years from now, is billed to be potentially the world’s largest gold and copper mine, with deposits capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. The government contends that Pakistan will benefit for “over 100 years from this project and the total worth is estimated to be over $100bn”.
The new agreement has been reached after 10 years of legal battles and negotiations. The government claims that the new agreement will help Islamabad to avoid the penalty, besides bringing in an investment of $10bn and creating 8,000 new jobs in Balochistan. Under the new arrangement, Barrick gets half the shares in the project while Balochistan and federal state-owned firms will each hold 25pc of the remaining half. Barrick will get a mining lease, an exploration licence and surface rights.
Indeed, the new agreement seems to be an improvement from the past when international investors held 75pc of the project. But questions remain. For instance, the details made public so far don’t inform us if the investor plans to set up a refinery at Reko Diq for exporting precious metals or intends to take minerals out of the country in their raw form.
In case the company decides to export the metals in their raw form, do we have the capacity for determining the quantity extracted and moved out of the country, and to verify the exact revenue? The government owes it to the people of Balochistan as well as the rest of Pakistan to make all the details public for the purpose of transparency.
