Chinese, Canadian mining companies dig deep in conflicted Balochistan

Pakistan has doubled down on mining activity in the conflicted Balochistan province as it has begun preparatory work on seven new mining sites in the province’s Chaghi, Saindak, and Dasht-Kin areas.

The extraction will be done for copper, molybdenum, gold and possibly lithium in the mineral-rich but war-torn region that lies in the south-west of the country. Balochistan – the largest province of Pakistan, which was usurped on 27 March 1948 through Pakistani Army action, borders the strategically important Iran and Afghanistan.

The Balochistan Post reports that multinational companies from China and Canada have taken up leases for the mining sites. It quotes Yasir Shaheen Khalil of the Geological Survey of Pakistan as saying that basic infrastructure including water has to be provided to the mining sites for smooth operations.

The Metallurgical Corporation of China (MCC), a Chinese company has been working on Saindak copper-cum-gold project for almost two decades and will continue to extract the metals till the mines are depleted of resources.

Currently, Pakistan is working double fast upon its commitments made to international companies to ensure that mining can be expanded in Balochistan. Pakistani newspaper, Business Recorder says that the Prime Minister’s Office (PMO) held two meetings to speed up mining project work and pave the way forward for Canada-based mining company Barrick Gold.

Prime minister Shehbaz Sharif’s office directed ministries and provincial governments to resolve the issues of Barrick Gold and also asked for upgrading the airstrip. The company made presentations showing milestones that needed to be completed. Barrick stepped into the mining landscape of Balochistan after Tethyan Copper – an Australia-based joint venture between Antofagasta and Barrick Gold ran into a dispute with the Balochistan government over the Reko Diq gold and copper project.

After an international dispute which was arbitrated by the World Bank, former Pakistani prime minister Imran Khan claimed that an agreement with Barrick has saved the country from a $11 billion penalty.

However, a number of concerns haunt investment firms in Balochistan, the foremost being the poor security environment in the region. Local opposition and large-scale attacks by Baloch armed groups on Chinese companies and Chinese nationals, besides Pakistani communication infrastructure, has lowered investor confidence in the South Asian nation.

Added to the problems are Pakistan’s slow-moving bureaucracy, an intense local conflict and depleting forex reserves. Other issues to be sorted out between Barrick and various Pakistani agencies include land ownership and corporate social responsibility (CSR) agreements.

Pakistan also has to provide power to the mining company in a region which has little electricity facilities. Due to lack of resources in its largest but poorest province, Pakistan has been importing power from Iran for domestic use for its Baloch population.

Transport and communications facilities are non-existent as the airstrip in Balochistan has to be upgraded for use by Barrick Gold officials, a road network has to link the mining area with the Gwadar Port and Pakistan also has to construct a railway line to link Pakistan Railways with the Barrick Gold Project site.

Even as Baloch armed groups have warned the Canadian mining company as well as Chinese nationals to not invest in their region, a cash-strapped Pakistan is pushing mining activity frantically in the region. Even as Pakistani officials receive a dressing-down in Beijing over poor security for its nationals in Pakistan, Barrick Gold President Mark Bristow had to face angry activists and environmental groups in Canada over the Reko Diq project.