Source : DAWN
By Saleem Shahid
Sunday, 23 May, 2010
QUETTA: The Balochistan government has chalked out a comprehensive plan to secure its financial resources by making investments in major oil, gas and mineral exploration companies operating in the province.
Official sources said here on Friday said that Chief Minister Nawab Muhammad Aslam Khan Raisani has taken all his cabinet colleagues on board and necessary directives had been issued to finance and law departments for suggesting legislation in order to ensure safe utilisation of such assets.
The Balochistan government would make best use of its financial resources, which it was going to receive as arrears out of the Gas Development Surcharge and the allocations from the 6th NFC Award.
The chief minister has desired that after ear marking necessary funds for development and non-development expenditures efforts would also be made to apportion a sizeable amount of money to buy major shares in PPL, OGDCL, Gwadar Port and Gwadar Free Trade Zone.
In addition to that, sources said, the foremost objective of the provincial government would be to take full control of Reko-Diq Copper and Gold project from its present operators M/s Tethyan Copper Company (TCC).
The provincial government has also decided to take control of the Saindak Copper and Gold project once the agreement with Metallurgical Construction Company China (MCCC) expires in October 2011.
The government has already constituted a board of governors to oversee the project, headed by Dr Samar Mubarak Mand, the renowned nuclear scientist, as its chairman.
The first meeting of the board would discuss the role of TCC in the project, if any; the source of funding for the Reko-Diq project, and linking the government’s share to the income from Saindak for the development of the project.
It may be mentioned that the Exploration Licence (EL-5) was granted to an Australian Company – BHP Billiton – during 1991 for an area of 33,47,226 acres (13.5 Sq km) containing copper, gold and associated mineral reserves in Reko Diq area in District Chagai.
The Balochistan government has decided to take over the Reko-Dig Copper and Gold project and cancel the agreement with the TCC on the grounds that the TCCP violated the provision of clause 14(1) of joint venture agreement by transferring its share to other companies at the exploration stage and without the consent of the second party, the government of Balochistan.
The government from the outset was insisting to set up a refinery plant in Balochistan but the company was reluctant to do that and the CEO of the company had confirmed the same in a meeting with Board of Investment in Sept 2009.
The TCCP was required to establish a mining academy for imparting training in the mining field to produce skilled human resource but the company was not willing to make investment for such academy.
The TCC was planning to lay pipelines from Reko-Diq to Gwadar and dispatch concentrate through this pipeline to Gwadar and then transport to Chile/Canada for final refining purposes. This arrangement by the company was not acceptable to the government for it will not be having any approach and access to the produce of refinery plant proposed to be established outside Pakistan.
The agreement between the government of Pakistan and the Metallurgical Construction Company of China (MCCC) on Saindak Copper and Gold project was going to expire in October 2011 and the federal government had agreed to handover the project to Balochistan, which is planning to run the project and for this purpose a PC-I scheme for setting up a processing /refinery plant at the site at an estimated cost of Rs8,698.57 million to process 15,000m/ton ore per day had been prepared and submitted to CDWP, which had approved the same.
After taking over the Saindak project by the government the concentrate/blister copper produced in the project would also be used in the refinery plant at Reko Diq project.
According to the cash flow analysis, the Reko Diq project would make annual profit of Rs15,375 million by processing 15000m/ton ore per day.
The Mines and Mineral Development Department Balochistan having sufficient technical staff would indigenously run the project, sources said.