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September 25, 2010

Riko Diq mining project

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September 25, 2010

KARACHI: The Balochistan Government wants to have a most beneficial deal for the Reko Diq copper and gold mining project, rather than allow the exploitation of the province’s natural resources, said Abdul Rehman Mengal Minister of Mines & Minerals Balochistan talking to The News.
“There are some reservations regarding the agreement with the Tethyan Copper Company (TCC), the government is negotiating with it, if the talks materialise, well and good, otherwise the Chinese are also interested in the project,” he said.
An insider said that Metallurgical Corporation of China is now eyeing the Reko Diq copper and gold mining project in Chaghai district, where the TCC has already completed its exploration phase and has submitted its Feasibility Report to the government of Balochistan.
Two of the world’s major mining companies Antofagasta Minerals of Chile and Barrick Gold of Canada, who form the Tethyan Copper Company as a joint venture with the Government of Balochistan, are willing to invest up to $3.3 billion in Reko Diq.
Geological experts said that countries, such as Chile, Peru, Argentina and Tanzania, that had lucrative but dormant mineral potential succeeded in lifting their economies by creating an enabling environment for private mining investment and “unlocked” their mineral resources.
The spill over effect of this opening up of the mining sector triggered development of mining related service industries, creating even more indirect benefits for the people and economy. Reko Diq project has the potential to provide a similar impetus to the Pakistani economy.
“This national treasure does not mean anything for the people of Balochistan if it stays underground as it has for hundreds of years,” said a geology professor at the Balochistan University.
Dr. Viqar Hussain another geology professor at Karachi University said that there is no mineral policy in the country, the issues of exploitation of the mineral resources of

country will keep haunting the country until and unless a proper policy is formulated.
Pakistan could earn 10 times the amount if the copper or any other mineral is processed and sold in a refined form. It just needs will and investments to set up processing plants in the country.
It is important to understand that Balochistan’s mineral resources are valuable only if identified, extracted and processed and sold to the commercial markets worldwide, added Hussain.
According to TCC spokesperson, Samia Ali Shah, the company has already invested almost $200 million in site exploration. She was confident that if the project were allowed to move to the mining stage, it would place Pakistan on the world map as a good investment location, which could attract more foreign investment in the country’s mining sector.
Samia added that it would kick start the supply chain, modernise communications, road networks, maintenance services, transport, manufacturing of spare parts, and support services.
She said the project would bring in technology, while the province’s labour, health, environmental and safety standards would be upgraded and would have a multiplier effect on the overall economy.
It is also useful to know that in such high-tech, world class mining operations, there is no concept of menial jobs and the entire workforce has to be highly trained.
TCC also plans to invest substantial amounts of money in community development, and especially in skills development of local people so that employment opportunities can benefit them the most.
According to the TCC source, the Reko Diq project is estimated to produce 22 billion pounds of copper and 13 million ounces of gold over some 56 years. The mine development phase, spanning over two to four years has the potential to create more than 11,000 jobs and once commercial operations start, the number of directly employed would be about 2,500, while 6,500 persons would be indirectly employed.
This will result in the creation of a large semi and fully skilled workforce capable of supporting further exploration and development activities in the province with new mining ventures and support businesses.
The local people are beginning to realise the development this project would bring. There is also an air of expectancy in terms of benefits that would be created for the common people.
“The poor people of the area think that once the project materialises, health and education services would improve and commercial activities would thrive in Chaghai,” said Munir Baloch, a schoolteacher in Nok Kundi, a small town located near Reko Diq talking to The News.
Dur Mohammad, a road contractor, who has a small business in the town of Dalbandin, informed that there was much talk among the local people about all the new jobs that would soon be opening up.

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