Reko Diq contract

Prime Minister Imran Khan took no time in giving this nation the news of the year: that Pakistan has dodged a penalty of $11 billion in the Reko Diq case. However, there is more to it than what meets the eye. The government is claiming to have saved the country from the penalty by reconstituting the project that aims to excavate enormous reserves of copper and gold in Balochistan. The Balochistan government has also given its consent to the federal government to sign a new agreement with two international firms. They have reached an understanding on a broader outline to give the Reko Diq project a new shape from which Chilean miner Antofagasta Plc will be able to exit amicably. The new deal has been struck with Barrick Gold, a Canadian mining giant, after nearly a decade of legal battles and negotiations.

Complete details of the new understanding are yet to be made public but we at least know Pakistan will not be paying the $11 billion fine. The agreement also stipulates that Barrick Gold will invest $10 billion in the project, creating 8000 jobs. How many of these promises will actually materialise is anybody’s guess, but such hyperboles need to be used with utmost care. Claims that Reko Diq will be the largest copper and gold mine in the world or about about liberating the country ‘from the crippling ball and chain of debt and ushering in a new era of development and prosperity’ sound a bit premature, seeing how we have seen many a claimed ‘game-changer’ over the years. While everyone wants the Reko Diq project to be a success, making exaggeratingly tall claims with absolution is not advisable. At this moment, avoiding $11 billion in penalties certainly appears to be a success, irrespective of the final outcome of this project. The most significant steps now will include a public declaration of all points included in the agreement and a timeline of how the project will proceed. One of the major complaints of the people of Balochistan has been that most jobs in CPEC-related projects and even in Saindak mines are out of the reach of the local people. Per the details available now, Barrick Gold Corporation will get half of the share, whereas the Balochistan government just one-fourth. The remaining 25 percent will go to state-owned-enterprises – OGDC, PPL and Government Holdings Pakistan. Regardless of any scepticism, the Barrick Gold agreement is a welcome development, especially for a government struggling both on the economic and political front.