The multi-billion dollars Reko Diq project in Balochistan may be further delayed due to scarcity of funds and misunderstanding between the federal and provincial governments over the funding percentage issue, sources told Business Recorder. Reko Diq is the fifth largest copper ore reserve in the world and contains 0.8 percent of copper content.
The Department of Mines and Minerals of Balochistan envisages creating a facility for processing 15,000 tons per day of copper ore to produce copper metal and other valuables such as gold, silver, molybdenum, sulphuric acid, etc, at Reko Diq. This facility will be for production of copper and gold ingots only. A separate project, however, will be required for conversion of ingots into value-added products such as sheets, pipes and rods, etc, as per requirement. It is estimated that annual income of the project, on completion, would be to the tune of Rs 15.876 billion ($185.25 million). The recurring cost of the project would be Rs 4.770 billion, after completion. The project will be completed in four years.
The project would provide necessary infrastructure and boost to the mineral sector by exploiting the mineral resources of the country. It would help in achieving self-reliance in the production of copper/gold ingots and some other materials such as silver, molybdenum and sulphuric acid, etc. The project would also help in improving the livelihood of the people of Balochistan by providing direct employment to 917 persons and generating economic activity in the area. The plant and equipment required for the project would be designed and manufactured locally, using expertise and engineering/industrial base available in the country.
Some of the sector issues are as follows: (i) lack of expertise in mining and processing of minerals; (ii) inadequate infrastructure for mining; (iii) unexploited mineral resources; (iv) dependence on foreign companies and; (v) dearth of skilled manpower. Sources said that heap leaching process would be used for recovering copper, gold, silver and nickel from the ore which keeps the environment safe. However, all necessary measures would be taken to avoid environmental degradation due to other project activities in the area.
The project was considered by the CDWP in its meeting on March 18, 2010 which, while recommending the project for consideration of Ecnec at an estimated cost of Rs 8.6987 billion including foreign exchange component of Rs 3.4897 billion, took the following decisions: (i) as agreed by Balochistan government (BoG), the requirement of funds during the current fiscal year (2009-10) would be met by them from their own ADP; (ii) the issue of funding from fiscal year 2010-11 onwards by Federal Government or GoB may be decided by Ecnec. Officials are of the view that as the country is facing serious financial crisis due to current devastating floods, the government may not allocate any amount for this project during the current fiscal year.
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