SC thwarts attempt to dupe Pakistan!
The Supreme Court of Pakistan in its verdict declared the Chaghai Hills Exploration Joint Venture Agreement (CHEJVA) as illegal, null and void. It said that the agreement was contrary to provisions of the various laws of the land, and ran counter to the country’s mineral development act and mining concession rules. In its 16-page short order, the court held that all the amendments made to the agreement after its signing were unlawful and in contradiction with it (agreement).
Some lobbyists for the foreign corporations are raising alarm that the verdict may have devastating impact on investment. Pakistan indeed has problems in attracting foreign investment, but it does not mean Pakistan should sell its prime assets at throw away price. Anyhow, in the presence of independent and honest judiciary and vibrant media, nobody would be allowed to rob the national wealth. In 2007, the apex court had stalled the shady deal of selling Pakistan Steel Mills just for peanuts by Shaukat Aziz government.
The vested interest had raised hue and cry that if the deal was cancelled then nobody would invest in Pakistan. The court had acknowledged that it was not the function of this Court, ordinarily, to interfere in the policy making domain of the Executive which in that case was relatable to the privatization of state owned projects, as it had its own merits reflected in the economic indicators. The court, however, had stated that the process of the privatization of Pakistan Steel Mills Corporation stood vitiated by acts of omissions and commissions on the part of certain State functionaries reflecting violation of mandatory provisions of law and the rules framed there-under. Prequalification of a member of the successful consortium ( Arif Habib), valuation of the project and the final terms offered to the successful consortium, were not in accord with the initial public offering given through advertisement.
On the basis of his interviews in TV channels and print media, Dr Samar Mubarakmand was called by the court on 12th January 2010 to assist the court regarding natural resources in Balochistan area of Reqo Diq. According to him, the figures being given by the foreign exploration company were only limited to the EL-5 license for which a feasibility study had also been submitted by the company, but much larger parts of the same gold and copper belt had not been evaluated. In 2010, Chief Justice of Pakistan Iftikhar Muhammad Chaudhry heading a three-member bench hearing the case of copper and gold in Reko Diq, had said: “We are Pakistanis and should keep the national interests in view.” Balochistan’s then Attorney General Salah-ud-Din Mengal said the processing license has been given to BHP (now known as BHP Billiton after a 2001 merger), the company earned millions of dollars by floating shares in market; however, Balochistan was not given even a penny.
The company’s counsel had told the amount worth $435 million was spent in exploration of natural resources with nothing earned in this regard. It transpired that the Balochistan government had not issued any mining license to any company, and there was no guarantee that the same company which carried out the exploration would get the mining license as well. Anyhow, the apex court lived up to its traditions by blocking the deal, as it was against the interest of Pakistan. Having that said, the resources in Balochistan can change the destiny of the nation, and people of Balochistan would be the first beneficiaries. Of course, Pakistan will be able to pay back IMF loans, relieve the burden from the common man and safeguard its sovereignty. Pakistan is importing around 100000 tons of copper a year. With exploration and local production of copper and gold Pakistan could save scores of billions of dollars a year, and also create employment opportunities for the people of Balochistan.
As the province has the first right on the national resources, it was for the Government of Balochistan to decide who will get the mining and processing licenses. But there seems to be something fishy about Reko Diq. Last year, two competitors i-e the joint venture of Tethyan Copper Company (TCC), and Benway Corporation - an American company - issued statements against each other. The latter had accused TCC and its principals of playing games with Pakistan. The company said Reko Diq deposits had not been fully declared to the government of Balochistan by its sponsors. TCC claimed that the mineral resource at Reko Diq was estimated at 5.9 billion tons. It stated: “From this resource, an estimated 2.2 billion tons of economically mine-able ore, with an average copper grade of 0.5 per cent and an average gold grade of 0.3 gms per ton will be processed to produce 2.2 billion pounds of copper (10 million tons) and 13 million ounces of gold in form of payable metal in about 56 years of mine life.”
It has to be mentioned that according to 2008 study conducted by both these companies involving top experts of Geology and mining had reported much larger deposits. The Tethyan Copper Company had also invoked the jurisdiction of the International Chambers for Commerce and International Centre for Settlement of Investment Disputes in December last year against the Pakistan government for not renewing the prospective Reko Diq minerals license in accordance with Balochistan Mining Rules 2002. The ICSID, however, rejected TCC’s demand for ‘provisional measures’ for ‘protecting’ two of its deposit areas. It may be mentioned here that cases pertaining to the Reko Diq mining lease dispute was being heard for the past six years. Barrick, the world’s largest gold producer, and Antofagasta Minerals, each own a 37.5 percent share, as the Tethyan Copper Company, in the largest Foreign Direct Investment mining project. In 2011, work came to a standstill after the local government refused to renew the consortium’s mining lease.