DUBAI: Numerous questions are waiting for an answer in the famous Reko Diq mining case involving billions of dollars, which has been put on hold by the Supreme Court of Pakistan until the Balochistan government issues the mining licence for which hectic behind-the-scenes lobbying has been reported.
Chief secretary of Balochistan Mr Lehri says that no one has applied for the Reko Diq mining licence except probably TCC but the tenders for this licence have not been called as yet inviting international bidders. There are about 20 major mining companies who may enter this project if all past corruption-riddled agreements are cleaned up and a new slate provided to the next line of bidders.
Informed mining industry sources say in the near future top Pakistani decision-makers are expected to meet the executives of the Canadian and Chilean company TCC in Sharjah to settle matters outside Pakistan. The chief secretary of Balochistan has publicly stated that the licence could go to the TCC in sharp contradiction to Chief Minister Raisani who has repeatedly stated that Pakistanis would do the mining themselves and Dr Samar Mubarakmand is waiting for decision to activate his organisation.
The Chinese company MCC is understood to have submitted a full offer for Reko Diq which Balochistan government officials have not yet disclosed. Insiders say while the Chinese government has not committed any violations, some Chinese companies may have done so.
The Chinese government itself is clean in matters of Saindak, said an official in Quetta. The two companies who are enjoying cheap lease of Saindak give Pakistan one million dollars per year as lease money and 50 per cent share of the product to Pakistan. What part of this 50 per cent is given to Balochistan is not known.
The Metallurgical Corporation of China and Jiangxi Copper are the two corporations, which have increased Pakistani share to 55 per cent. This formula gives Pakistan only $10-15 million per year but in Afghanistan MCC plus Jiangxi have agreed to pay $3.2 billion in 8 years or Afghanistan gets $400 million per year.
Under the SC order, once the mining licence is granted, the apex court will review the decision and industry experts say the long list of irregularities and illegal actions is yet to be addressed in the process.
The key questions that await a clear response and fixation of responsibility include the mysterious award of a 30-year lease to TCC by the Balochistan Board of Revenue on May 23, 2008.
Other issues that hang in the air include:
- When TCC took over Reko Diq system from BHP in 2006, it consisted of EL-5, EL-6 and EL-8, which constituted lands of CHEJVA (Chagai Hill Exploration Joint Venture Agreement signed by BHP & their companies which allowed 25% to government of Balochistan). Then how EL-6, EL-8 and RL-7 are now 100% owned by Antofagasta? How did Antofagasta obtain the share of Balochistan and for what compensation? Who in Balochistan got compensated?
- Is it true that EL-24 was obtained by TCC in 2008 for 30 years from Board of Revenue on the orders of the then chief minister of Balochistan who with his top officials visited Toronto and Santiago a few weeks prior to the grant of the 30-year lease approval for both EL-24 and EL-5 in May 2008? This was then revised in September 2008 to 585 sq. km. Is this a violation of Pakistani laws and US Foreign Corrupt Practices Act which prohibits funding of travel of top political and top bureaucrats officials who act in approving orders favouring the host companies.
- The Supreme Court of Pakistan has been presented that EL-5 (Reko Diq) is an exploration licence issued in 2002 by DMMD (Department of Mines and Mineral Development), which is the sole licensing authority and that TCC is looking for a 30-year mining licence. But EL-5 licence has expired in February 2011. So how the BOR Balochistan gave a 30-year lease for EL-5 and EL-24 to TCC in May 2008?
- Why drilling of 270,000 meters was done clandestinely, which is a violation of Balochistan Mineral Rules of 2002. Several smaller countries have fined big mining giants billion of dollars for such violations. Ecuador fined Chevron 8 billion dollars for violations. The courts of Third World are passing high penalties on big corporations who break host country laws.
- Reko Diq first phase of two deposits on H14 and H15 has been estimated to have between $150bn and $260bn of deposits by many international experts. So why a treasure so big is still being considered for $52 billion (only 8 billion to GOP and GoB) and that too receivable in 56 years? There are reported to be 48 deposits in Chaghi as per research of Antofagasta-related geologists.
- The Supreme Court interim judgment of May 25 says: “all decisions by GoB while issuing mining licence must be in accordance with Balochistan Mining Rules of 2002. But the SC did not direct GoB what it should do while dealing with TCC about “CHEJVA and all changes unlawfully made in CHEJVA by BHP and TCC, under which these 5-6 companies (BHP, MINCOR, Tethyan Australia, Tethyan Pakistan and Barrick and Antofagasta) came into Balochistan and allegedly violated rules many times.
- Some of these violations include: EL-6, EL-8 and RL-7 have been in possession of TCC and its owners Antofagasta on 100 per cent basis and that is a violation of CHEJVA and MRB 2002; Drilling of 275,000 meters is a violation of CHEJVA and BMR 2002; Drilling EL-24 by TCC is a violation of BMR 2002; Construction of an airport on EL-24 is a violation of CHEJVA and BMR 2002; Expenditure stated at $465 million or $220 million by TCC without an itemization is a violation and to claim that these huge amounts were spent in Balochistan are not correct. Actually they have been spent in Australia or Canada; flying of planes without approvals of GoB/BDA or DMMD is a violation of CHEJVA and BMR 2000.
How and when these questions will be answered is still a big question mark on the whole Reko Diq case which has consumed million of rupees, enriching flabby lawyers by crores of rupees and spending weeks and months of Supreme Court and government time and energy.
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