The federal and Balochistan government signed a deal with the Canadian mining company Barrick Gold on Friday to revive mining in Reko Diq, Chaghi, days after the apex court of Pakistan gave the go-ahead for the project.
The representatives of the Barrick Gold, the federal and the Balochistan governments signed the agreement at a ceremony attended by senior officials. The agreement came into immediate effect on Friday (Dec 16).
The Balochistan government issued a statement late Thursday night, lauding the project as Pakistan’s biggest investment accord. “After signing the Reko Diq agreement, the $6.5 billion fine imposed by an international court has become ineffective”, the statement read.
Per the agreement, Barrick Gold would own 50%, three federal state-owned companies 25%, and the Balochistan government 15% and 10% on a fully funded basis and free carried basis in the project.
The mining company also confirmed and welcomed signing the agreement. In a press release on its website, the company said the project is expected to have a life of at least 40 years. It further added that the construction would begin in two phases with a combined process capacity of 80 million tonnes per annum.
Barrick Gold also emphasized the economic and social benefits of the project to the people of Balochistan and Pakistan. It said that the Reko Diq project is “expected to have a transformative impact on the underdeveloped Balochistan province where, in addition to the economic benefits it will generate, the mine will also create jobs, promote the growth of a regional economy and invest in development programs.”
During peak construction, the project would employ 7,500 individuals with 4,000 long-term jobs, the company said. “Barrick prioritizes the employment of local people and host country nationals at our operations worldwide.”
Senate approves amendment
The Pakistani Senate passed a bill on Friday seeking an amendment to the Foreign Investment (Promotion and Protection) Act, 2022, the law that revived the Reko Diq mining project. The amendment seeks to limit the scope of legislation in Balochistan to “qualified investment” for the Reko Diq project.
The FI-Act 2022, which was passed in the Senate on Tuesday, seeks to protect foreign companies from arduous court proceedings and hassles. It has been a cause of discord within the ruling coalition, creating political rifts between the parties, including the BNP-Mengal and JUI-F. The two parties have raised objections that they were not consulted and included in the decision-making process and that the bill infringes on the rights of the people of Balochistan.
Pakistani premier Shehbaz Sharif convened a federal cabinet meeting to placate BNP-Mengal and JUI-F, but the two parties boycotted the meeting to register their protest but joined it later on. The premier assured them that their grievances will be addressed and the Reko Diq bill would be amended.
Pakistan’s Finance Minister, Ishaq Dar, presented the bill for amendment to the law in the Senate on Friday. The bill states that the law, which applies to the whole of Pakistan, be amended to specify in “… Balochistan, it should only apply to the qualified investment of Reko Diq project as mentioned in schedules and annexures of this act”.
“The purpose of the subject amendment is to clarify the scope and application of the Foreign Investment (Promotion and Protection Act), 2022”, the amendment bill added.
The amendment bill has to be approved by the National Assembly before being finalized.