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The Gold Reserves of Pakistan and the Grand Robbery

By | November 8, 2013 | 0 Comments

We have been listening since we were kids that Almighty has made this country very rich, fertility and full of natural treasures, but unfortunately it has always been portrayed as a poor, shabby and a territory with lack of any quality. The biggest reason of this situation is our own inability, selfishness and corruption.

Gold MinePakistan is a rich country, ranked at number third in world listing for natural reserves of precious metals with estimated worth of 2500 Billion US Dollars, but our corrupt leadership, sucking the blood out of citizens’ bodies to borrow 6 Billion dollars from IMF, for their own benefits, burying the nation under burden of heavy debt.

The Gold resources of Pakistan are divided into three regions:-

1- RekoDiq – Chagai District, Baluchistan, estimated worth is 1200 Billion US Dollar.
2- North areas of Pakistan, scattered reserves of Gold, Silver and Copper in the areas of Hunza and Gilgit Baltistan, estimated worth 1000 Billion US Dollars.
3- Northern Waziristan, reserves of Gold and Copper, estimated worth 300 Billion US Dollars.

According to an estimated, the worth of these reserves is equal to the annual national budget of Pakistan for more than 60 years. These reserves consist of Gold, Silver, Copper, Platinum, Cobalt and other precious metals. If Pakistan utilizes 25 billion dollar worth of these reserves every year, which is more than the profit of our annual exports, these reserves can be used for up to 100 years. According to a study, the possibility of existence of Cobalt is higher than Copper. Cobalt is far more expensive than Copper, it is used in manufacturing of aeronautical parts, glass and ship making industries.

Gold StoneThe reserves of Gold and Copper in Baluchistan rank at number fourth in world listing. These are scattered in 3.0 million acres (13000 square kilometer) area. In 1978, during a general Geological Survey of Pakistan, scientists found these reserves with mere cost of 35,000 Pakistan Rupees. The credit of exploration goes to Mr. Firdoas Khan. Now he is working as Section Officer in Ministry of Petroleum Pakistan.

About two and half decade ago, a license of exploration of these reserves was given to a foreign company named BHP Billiton. The terms upon which the contract was given were miscalculated and unfair, there were some corrupt political leaders and bureaucrats involved in this treason, would have caused huge loss to Pakistan and high profits to the foreign explorers.

Misappropriations in the terms of exploration contract can be judged from this example that the explorer had to pay the exploration fee Rs. 1 (US$ 0.01) for an area of 1 acre, and after some time, this fraction amount was also withdrawn by the government. After some time the BHP sold their shares to another company named Tethyan Copper Company and they continued the further work.

According to standard procedure, an exploration contract is allotted to a exploration company to explore and locate the natural reserves, and when they find the reserves, their job is to estimate the worth and submit a feasibility report to the government, asking for permission for mining, then a mining is allowed and a license of mining is issued. But when the exploration company saw those huge natural reserves, worth of billions of dollars, they thought to cheat the government (of course with the help of some corrupt politicians and bureaucrats), they presented the feasibility report of only 6 square kilometers (out of the original allotted area of 99 square kilometers). The report was brief and misleading, showing the land less worthy, hide the locations of 14 different natural reserves scattered in over 13000 square kilometer wide area. On the base of sis decisive reports the company applied for the license for mining, and they even got it.

Luckily this whole plan got the attention of a few patriotic activists and they filled a petition in Supreme Court of Pakistan against the mining company. After hearing the views of both parties, Supreme Court of Pakistan finalized the verdict in which the contract of mining was identified as a threat to national economy and against the international rules of exploration and therefore declared void. The mining company instead filling a request for reconsideration, took the matter to International Center for Settlement of Investment Disputes (ICSID), and presented their ridiculous notion that Pakistan should be prohibited from exploring their own natural reserves in RekoDiq – Baluchistan. Government of Pakistan established a panel of scientist and lawyers, including Dr. Samar Mubarak Mand and many law experts from within the country and abroad to represent Pakistan at international forum. After a complicated trial, ICSID tribune ruled the decision in favour of Pakistan government. –– If this planned robbery left unnoticed, it could be a national disaster but thanks to some devoted citizens, our national reserves were saved.

The mining company was never sincere in doing a fair business in Pakistan. They declared Pakistan unsuitable and technologically backward for the installation of Smelting Plant which processes the raw material into final product. –– Pakistan is a recognized atomic state, and has been successfully and securely processing Uranium from last 30 years, how can it be considered as not suitable for processing of raw material of metal ore?

Actually the mining company was planning something very deceitful, they planned to transfer the raw material from RekoDiq to Gawadar seaport through a 630 kilometer long pipe line by mixing it with water, at Gawadar port the raw material was supposed to be loaded into containers and then sold out in auction to foreign buyers from Dubai, South Africa, Chile and many more. This way the Pakistan government would have never been able to know the actual quantity and value of the mined material, because according to the contract the company had complete control over the transportation and handling, and there was no check over their provided details, therefore share of profit would have been decided by the company itself with absolute discretion.

The 1200 billion dollar worth reserves were declared 60 billion dollar only, and the age of these reserves was declared 35 years only instead of 100 years. According to the contract the mining company’s share was 75% and the Pakistan’s share was 25%, but for this 25% share, Government of Baluchistan had to invest 25% into the total cost of the mining project, which was 3.3 billion dollars (2 billion dollar for installing 630 KM pipeline and 1 billion dollar for other expenses). Obviously the government of Baluchistan did not have that many resources to invest otherwise they would have started the project without help of any foreigner investor, therefore, in case of not investing 25%, the government’s share decreased to mere 2% only, and everything else would have gone to the mining company, without any check and without any supervision.

After a few months a group of Pakistani scientist closely estimated the total cost of this project and found a huge difference. They found that the actual total cost of this project is 1 billion dollars only, three times less than the quote of foreign mining company, proved the cheating.

RekoDiq Mining Project can create 50,000 jobs in Pakistan. Most of these jobs will be given to people from within the province. It will boost the economy of Baluchistan province with direct and prompt effects. New roads, hospitals, schools, parks, residential colonies can be built. People of Baluchistan very much need all this. The province has been neglected in most cases but now it is time to get wise, get united and take actions. We are sitting on Himalaya of gold and we should dig it now.

Translated from an Urdu article, published in Sunday Magazine – Nawa-e-Waqt, November 03, 2013. Improvements made where necessary.
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Category: Business, Socio Political

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