By Harsa Kakar
Pakistan is blessed by a fair amount of mineral resources. It has a good number of natural elements that are of great value in the international market. These natural resources can be of great benefit for Pakistan’s economy if utilized, refined and marketed wisely and tactfully.
Pakistan is enriched with minerals like Copper, Gold, Lead, Zinc, Coal, Gypsum, Chromite, Uranium, Manganese, Sulphur, Mercury, Salt and Phosphate and many semi-precious stones. Pakistan is endowed with huge reserves of minerals covering an outcrop area of 600,000 sq. km. There are 92 known minerals of which 52 are commercially exploited with a total production of 68.52 million metric tons per year. The sector is a promising one with an average growth of 2-3% per annum, existence of above 5,000 operational mines, 50,000 SMEs and direct employment of 300,000 workers. Pakistan, for this purpose, engages with countries like China, Australia, Germany and also the World Bank for the mining, extraction and refining of these mineral resources in different parts of the country. An important name in this list is the Saindak Copper Gold project which is the focus of this paper.
The Saindak Copper-Gold project is run with the collaboration of the Chinese and provincial (Balochistan) government with the cooperation of the federal government of Pakistan. The Project has generated a profit of $74.71 million by collecting revenue of $550,000 against 16,426 tons of blister copper out of 5 million tons of concentrating tasks during last year. It is located at a distance of 35 km from Pakistani border town Taftan and 325 km from Dalbandin, Chagai District Balochistan. The Geological Survey of Pakistan (GSP) discovered the Saindak copper gold deposits during a geological survey in 1961. From 1972 to 1973, the East, North and South ore bodies were preliminarily defined through reconnaissance surveys. In 1974, Resource Development Corporation (RDC), later on called Saindak Metals Limited (SML) was established for evaluation and development of Saindak Copper-Gold deposits.
From 1974 to 1977, RDC completed the exploratory drilling work and estimated the total ore resources of 412 million tons in the area. Due to the high grade of Copper in South Ore Body (SOB), it was decided to mine it first. On 23rd September 1990, a contract was signed between Metallurgical Construction (Group) Corporation (MCC), China and RDC Pakistan for development of south ore-body (SOB) of Saindak copper-gold deposits. The designed production capacity for mining and beneficiation is 12,500t/day (4.25million t/annum) and the smelting capacity is 20,000t/annum of blister copper, which contains about 98.5% Copper (Cu). After ingot casting, it would be sold as the final product.
In 1995, the mine development work was completed and handed over to SML but till the end of 1996, the trial production was suspended due to lack of spares, materials and funds. On 30th November 2001, an agreement was signed in Beijing, China between Saindak Metals Limited (SML) and the China Metallurgical Construction Group Corporation (MCC), for exploring, mining and processing of Saindak Copper ore and other minerals. The production was started in 2003 and continued till date. The contract between SML and MCC has expired on 31st Oct, 2022. The South ore body and North ore bodies are depleted. For development and Mining of East ore body, further extension of lease agreement for 15 years already signed by SML & MCC China with the consent of Government of Balochistan, has been in effect from 1st Nov 2022 and will go on till 2037.
MCC has equipped the project with high machinery, man power and strong administration which keeps the project running quite smoothly. The progress on the project in simple words is, Chinese officials deal with the technical and administrative aspect of the project and Pakistani officials are given the task of maintaining the administration which is led by the Chinese officials. Pakistan provides them with security, small staff and technical staff who only provide reports, data and presentations regarding the project that only the Chinese officials approve of. This means, Pakistan being the owner of the project has no say in what records the project holds of earlier work, what it represents and where it goes in the future.
The Saindak project primarily being under China and proportionately lesser under Pakistan leads us to few questions. That is, if the project, being an important factor in Balochistan’s assets, is shared by another country for commercial means, will Balochistan have a good enough benefit from the project? Secondly, the benefit that this project has given to Pakistan after working on this piece of land for more than 20 years has mostly been money. The question is, does Pakistan have anything to learn from their nature of work in the project or not, now that it has worked in coordination with the Chinese technical team for so long, and can it work in the same way the project has been working once the lease with Chinese Mineral Company ends? The answers to these questions might be difficult to give in a time when we are still not in the position to run such projects on our own or we cannot afford the same infrastructure that they provide us with.
Recommendations:
In this aspect, we as a country need learning from progressive regional states with regard to the fields that we specially work in with collaboration. For this, there should be a request for buildup of capacity through exchange of intellectual sessions, seminars, conferences and workshops. This agenda must also include cultural and language oriented scholarships for the people of Balochistan specially people residing in the areas around the project site.
For as far as the project itself is concerned, monitoring of the project is national responsibility, there is a need for enhanced monitoring of especially Chinese made machineries/equipment spares, materials used in the project for controlling the annual cost of the project. There is a need to introduce the concept of CSR (Corporate Social Responsibility) which will work on the working environment of the project, since this concept was not introduced when the project was initiated. Additionally, our country should deploy its own technical personnel at project sites in SML in each section i.e., Geology, Mining, ore processing, Smelter, Power house etc. with Chinese personnel for capacity building to mobilize our technical personnel and broaden the horizon for them.
To sum it up, this deal regarding valuable resources of Balochistan with China has been beneficial to both the countries and has been a good source for Pakistan. If not for China, Pakistan was not in a position to bring something good out of its hard rock resources because of lack of a good infrastructure. But Pakistan needs to change its approach with deals like this in its own interest to receive long term benefits from it. In an age when globalization is spreading like a high-velocity rocket, Pakistan needs to learn from emerging and emerging economies in terms of its natural resources and their exploitation, especially keeping Pakistan’s current economic situation in mind.
Miss Harsa Kakar is working as Assistant Research Fellow at Balochistan Think Tank Network (BTTN), at BUITEMS, Quetta.
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights)