FWO may take part in Reko Diq project

ISLAMABAD: Pakistan’s military is taking a key role in the development of one of the world’s biggest untapped copper and gold deposits, which is currently stalled by a multi-billion-dollar legal wrangle with foreign mining firms, reports a foreign news agency citing multiple sources familiar with the situation as saying.

The Reko Diq mine has become a test case for Prime Minister Imran Khan’s ability to attract serious foreign investment to Pakistan as it struggles to stave off an economic crisis that has forced it to seek an International Monetary Fund bailout.

Ten current and former provincial and federal government officials and mining sources familiar with the project in the Balochistan region say the military has become the most important voice on the future of Reko Diq, which it sees as a strategic national asset.

An army-controlled engineering firm, the Frontier Works Organization (FWO), is positioning itself to be a member of any consortium involved, these people said. In a statement in response to the news agency’s questions about its role in Reko Diq, the military spokesman’s office said: “(The military) may only participate in government’s plan of development of Reko Diq, as per national requirements.”

But it acknowledged that FWO, best known for building roads through Pakistan’s rugged and lawless border regions, has developed “substantial” mining capability in recent years and would be interested in taking a role in the project.

“If an opportunity arises of participating in developing Reko Diq, FWO may work at par with other competitors (or) companies provided the project is financially viable (or) suitable,” the statement said. When asked, a spokesman declined to elaborate on the statement.

Federal Information Minister Fawad Chaudhry said civilian authorities in the insurgency-hit Balochistan were in charge of Reko Diq and, along with Khan, would take a decision, but added that the military “and all other stakeholders are obviously important players”.

The government is urgently trying to settle the dispute as a World Bank arbitration tribunal, which ruled against Pakistan in 2017, is in the next few months expected to announce how much in damages the country must pay to the foreign firms, who are claiming more than $11 billion. The dispute relates to the withholding of a mining lease. Islamabad is also trying to find new partners to invest in the project.

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.

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.