Does Pakistan need copper?

The Business Recorder of January 08, 2024, carried a headline ‘Co asked to share logistic requirements for Reko Diq project’. After years of legal battles, fines, negotiations, and parleys the Reko Diq Copper-Gold in Baluchistan project is back on the rails.

The new consortium consists of Barrick Gold (50%), GOB (25%), and GOP (25%) while GOP is trying to sell its share to the Maadan Group of Saudi Arabia. Logistics requirements are being worked out to ship the ‘Concentrate’ produced for refining overseas.

Finished metal will then be imported to meet the copper and gold requirements of the country. A similar approach was adopted for the nearby Saindak deposit from where the unfinished metal is shipped to China where it is finished.

To meet domestic needs about 0.5 million tons per year (MTY) of refined copper is imported every year. As the Steel Mills has been shut down 5 to 6 MTY of steel is also being imported while our own iron deposits (Chiniot, Naukundi, Kalabagh) remain unutilized.

Metals are the building blocks of the nation. Having worked on all the Mineral Deposits of the country and Thar Coal, I have first-hand knowledge of the hidden un-ground wealth of Pakistan, which can be easily extracted. Unfortunately, as a nation, we are unable to put the pieces together combined with vested interests and corruption the stalemate continues.

The original investors TCC (Tathylon Copper Company) which included Barrick Gold of Canada and Antofagasta of Chile had planned to lay a pipeline to transport the concentrate to Gwadar from where it was to be shipped abroad for refining.

GOB (Government of Baluchistan) had 25% equity. Thanks to the instigation of Islamabad and the then-Chief Justice of Pakistan (CJP) litigation started when TCC was denied the Mining license. As I knew all the players, despite my best efforts for a negotiated settlement the GOP decided to fight a long legal battle, which proved to be counterproductive. Now that the project is being restarted a new Concentrate transfer network is being considered, which includes both rail and road connectivity to Port Qasim, which will entail huge investments.

In Pakistan, national needs are always ignored. Like the ‘Black Gold’ of Thar, metals are also needed. Currently, a coal-based energy system is being developed to meet the domestic needs, which also includes ’gasification ’. The public-private partnership model has been implemented in Block II. SECMC (Sindh Engro Coal Mining Company) is running the mine.

Power generation has already started, suitability for gasification has also been attained with South African collaboration. Gradually, imported coal will be replaced with our own 175 billion tons deposit. Exporting unfinished metal concentrate deprives the nation of its full value and potential.

In Saindak, the entire output is sent to China for refining. Recently, MCC (Metallurgical Corporation of China) has been given an extension to mine for another decade. The same mistake should not be repeated at Reko Diq. At least our share of the concentration should be refined and utilized locally.

As refining is power intensive metal finishing can be carried out at Thar where inexpensive power is available. RDMC (Reko Diq Mining Company) can mine and then produce the concentrate, which should be then handed over to a local entity created under public-private partnership for producing finished metal.

Past mistakes should not be repeated again and again. Industrialization is carried out with national needs in mind.

The import bill has to be slashed. Long-term sustainability comes with self-reliance. It is time to look inwards to build on our potential by effective utilization of indigenous resources. The development of Thar has been a game changer. The slogan is “Thar Badlay Ga Pakistan “. Reko Dig has the potential to bring Pakistan on the world copper map. Exporting unfinished metal does not serve national interests and should be avoided.

RDC was folded into SML (Saindak Metals Limited) which is now located in Quetta. TCC was based in Islamabad and Karachi. RMDC will probably be located in Islamabad and Quetta. SECMC operates from Karachi. In Lahore, the Punjab Mining Company is leading the charge. Projects can be started in Kalabagh and Chiniot.

A private sector consortium (National Resources Limited) headed by Shamasuddin Sheikh, the former head of SECMC, is also desirous to start mining at Reko Diq, which is a welcome development. The ‘minerals’ summit’ last year in Islamabad brought all players together but the progress so far has been slow. It is time to revisit the plans that were formulated and deliberated upon during the sessions.

The Planning Commission (PC) should focus on the metal needs of the nation, which are currently being imported in the finished form. Infra-structure development to ship out un-finished concentrates has to be avoided in best national interests. Thar has the potential of resolving our energy needs, which is essential for refining of metals.

After copper the next candidate is chromium, which is a strategic metal abundantly available in Baluchistan which is currently being exported in a mined form at a very low return. Value-addition is the name of the game, which leads to prosperity of the nation.

Lessons have to be learnt from the Chinese model of development where priorities were set as under: Fulfillment of national needs, Import Substitution and then Exports. The order is important for developing countries to enter the ranks of the developed.

Copyright Business Recorder, 2024