Mining Rights for Gold, Copper and Rare Earths in Pakistan
The sale of Reko Diq mining rights is currently being reviewed by Pakistan Supreme Court in response to allegations of lack of transprarency. The entire discussion in the courtroom is primarily centered on valuations and estimates of traditional metals like gold and copper. The second topic of discussion in the apex court is about the absence of any contract provisions for development of downstream job-creating industries to extract these metals.
What is conspicuously absent from the debate is the potential for extraction at Reko Diq of rare earth elements that are even more precious and in much greater and growing demand for the latest high-tech equipment and batteries for all-electric autos, communications, and other applications than traditional precious metals like gold and silver. It is the estimates of these rare earths at Reqo Diq that could put the value of the contract at considerably more than the current best estimates of $500 billion for copper and gold.
Recent trade disputes between China and its major trading partners in the United States, Europe and Japan have been the result of China restricting rare earth exports.
A current production Toyota Prius nickel metal hydride battery pack uses 30 kilograms of nickel, 2 kilograms of cobalt and 12 kilograms of lanthanum because the active hydrogen storage alloy in the battery is either LaNi4.5Co0.5 or (Ce, La, Nd, Pr)Ni5. The Prius assembly plant in Japan has so far used one and 1.5 million rechargeable nickel metal hydride battery packs and achieved with them some of the lowest numbers of service issues ever seen in the OEM automotive industry. In fact most of the original Prius rechargeable nickel metal hydride battery packs have exceeded their 8-year 100,000 mile warranty and are still functioning, according to Resource Investor website.
China controls 95% of the world’s supply of rare earth elements, a class of ores used not just in Toyota Prius electric motors and batteries but in a wide range of high-technology applications, from sonar systems to wind turbines, mobile phones and fluorescent lights.
All this gives China an extraordinary - some might say unfair - advantage to lead the race to dominate the manufacture of cutting-edge technology, according to the Wall Street Journal. Even before any major technology partnership announcements, there are reports that the legendary US investor Warren Buffet is investing in BYD, an obscure Chinese battery, mobile phone, and electric car company.
Here is how an expert who asked not to be named explained the mining potential in Balochistan:
"The Pegmatite rock that covers much of Balochistan (and other parts of Pakistan as well) has several different gems, in it which have been mined for a long time. These are easy to visualize as they differ in color from the rest of the rock, and can be removed with a small geologist's hammer. Pegmatite, though, also contains uranium which can be separated using a Geiger Counter, and rare metals and rare earths. Some of these like Lithium can be separated relatively easily. Others like Samarium and Dysprosium are vastly more difficult to separate because you need X-Ray equipment to help identify them. Also, their presence is very small - that is why they are classed as "rare." The presence of many of these metals was not known to science until recently and until the Japanese began to use them in electronics, hardly any effort was made to mine them. Now, of course, they are all the rage because they have been found especially useful in the latest "green" generation equipment as well as in defense and other applications. Indeed, until China banned their sale to Japan, no one really even bothered about them - it suited the Japanese to remain quiet as they were getting very good prices for these resources from an unaware Chinese, and the same thing is now happening in other parts of the world, in Pakistan in this case.
Much of the testing that is involved here is difficult and requires very advanced technical equipment, and even methods like gas spectrometry etc may not help identify materials that exist in extremely small percentages in soil or rock. In India for example, some of these metal reserves were not known until the USGS first and then the Russians helped analyze soil and rocks across the country. If nothing else, the Indians formed a government owned company called Indian Rare earths Limited which comes under the Atomic Energy Commission and is directly under the Prime Minister of India. They do seem to have handled the conservation and exploitation of these reserves far better than is being done in Pakistan."
Given the potential for tremendous mineral wealth at Reqo Diq, Saindak and other similar sites in Balochistan and elsewhere in Pakistan, it is extremely important for the Supreme Court to insist on an independent panel of experts to evaluate it, and to base court orders on the findings of such panel. How the Supreme Court tackles these issues now will have a significant impact on the future well-being of Pakistan in terms of the availablity of public funds for spending on education, health care and other badly needed human development projects in Balochistan and elsewhere in the country.
Here is a video clip from GeoTV on Reko Diq:
Related Links:
Haq's Musings
Pakistan's Mineral Wealth
China's Electric Ambitions
Buffet Investing in Chinese Battery Maker
Remote Sensing Oil and Gas Fields in Pakistan
Pakistan's Mineral Yearbook 2005
US, NATO Fighting to Stalemate in Afghanistan
South Asia Slipping in Human Development
Abundant, Cheap Coal Electricity in Pakistan
Car Battery Battle Between Li-on and Nickel Metal Hydride
Auto Industry Prospects in India, Pakistan and China
What is conspicuously absent from the debate is the potential for extraction at Reko Diq of rare earth elements that are even more precious and in much greater and growing demand for the latest high-tech equipment and batteries for all-electric autos, communications, and other applications than traditional precious metals like gold and silver. It is the estimates of these rare earths at Reqo Diq that could put the value of the contract at considerably more than the current best estimates of $500 billion for copper and gold.
Recent trade disputes between China and its major trading partners in the United States, Europe and Japan have been the result of China restricting rare earth exports.
A current production Toyota Prius nickel metal hydride battery pack uses 30 kilograms of nickel, 2 kilograms of cobalt and 12 kilograms of lanthanum because the active hydrogen storage alloy in the battery is either LaNi4.5Co0.5 or (Ce, La, Nd, Pr)Ni5. The Prius assembly plant in Japan has so far used one and 1.5 million rechargeable nickel metal hydride battery packs and achieved with them some of the lowest numbers of service issues ever seen in the OEM automotive industry. In fact most of the original Prius rechargeable nickel metal hydride battery packs have exceeded their 8-year 100,000 mile warranty and are still functioning, according to Resource Investor website.
China controls 95% of the world’s supply of rare earth elements, a class of ores used not just in Toyota Prius electric motors and batteries but in a wide range of high-technology applications, from sonar systems to wind turbines, mobile phones and fluorescent lights.
All this gives China an extraordinary - some might say unfair - advantage to lead the race to dominate the manufacture of cutting-edge technology, according to the Wall Street Journal. Even before any major technology partnership announcements, there are reports that the legendary US investor Warren Buffet is investing in BYD, an obscure Chinese battery, mobile phone, and electric car company.
Here is how an expert who asked not to be named explained the mining potential in Balochistan:
"The Pegmatite rock that covers much of Balochistan (and other parts of Pakistan as well) has several different gems, in it which have been mined for a long time. These are easy to visualize as they differ in color from the rest of the rock, and can be removed with a small geologist's hammer. Pegmatite, though, also contains uranium which can be separated using a Geiger Counter, and rare metals and rare earths. Some of these like Lithium can be separated relatively easily. Others like Samarium and Dysprosium are vastly more difficult to separate because you need X-Ray equipment to help identify them. Also, their presence is very small - that is why they are classed as "rare." The presence of many of these metals was not known to science until recently and until the Japanese began to use them in electronics, hardly any effort was made to mine them. Now, of course, they are all the rage because they have been found especially useful in the latest "green" generation equipment as well as in defense and other applications. Indeed, until China banned their sale to Japan, no one really even bothered about them - it suited the Japanese to remain quiet as they were getting very good prices for these resources from an unaware Chinese, and the same thing is now happening in other parts of the world, in Pakistan in this case.
Much of the testing that is involved here is difficult and requires very advanced technical equipment, and even methods like gas spectrometry etc may not help identify materials that exist in extremely small percentages in soil or rock. In India for example, some of these metal reserves were not known until the USGS first and then the Russians helped analyze soil and rocks across the country. If nothing else, the Indians formed a government owned company called Indian Rare earths Limited which comes under the Atomic Energy Commission and is directly under the Prime Minister of India. They do seem to have handled the conservation and exploitation of these reserves far better than is being done in Pakistan."
Given the potential for tremendous mineral wealth at Reqo Diq, Saindak and other similar sites in Balochistan and elsewhere in Pakistan, it is extremely important for the Supreme Court to insist on an independent panel of experts to evaluate it, and to base court orders on the findings of such panel. How the Supreme Court tackles these issues now will have a significant impact on the future well-being of Pakistan in terms of the availablity of public funds for spending on education, health care and other badly needed human development projects in Balochistan and elsewhere in the country.
Here is a video clip from GeoTV on Reko Diq:
Related Links:
Haq's Musings
Pakistan's Mineral Wealth
China's Electric Ambitions
Buffet Investing in Chinese Battery Maker
Remote Sensing Oil and Gas Fields in Pakistan
Pakistan's Mineral Yearbook 2005
US, NATO Fighting to Stalemate in Afghanistan
South Asia Slipping in Human Development
Abundant, Cheap Coal Electricity in Pakistan
Car Battery Battle Between Li-on and Nickel Metal Hydride
Auto Industry Prospects in India, Pakistan and China
Comments
Pakistan's newspapers have a healthy combativeness to them, something that Indian newspapers sorely lack, because, they are, by and large, extremely conformist. Hopefully, this pillaging of a valuable resource will be stopped. While the Canadians and Chileans might refuse to renegotiate the business at present, please take it from me - they will agree when pressed. They know how much money there is in those sands and rocks. They are not going to throw that away. This is just posturing, nothing else.
(Reuters) - Barrick Gold (ABX.TO) Chief Executive Aaron Regent is optimistic the company can reach an agreement to develop the massive Reko Diq gold-copper project in Pakistan, he said on Tuesday.
The future of the $3 billion project, which is majority-owned by a joint venture of Barrick and Chilean copper company Antofagasta (ANTO.L), has been in doubt since the local government threatened to essentially cancel it -- by not granting a mining license -- because of misgivings about the share of benefits.
The project holds more than 11 billion pounds of copper and 9 million ounces of gold. Barrick and Antofagasta each own 37.5 percent of the project, while the provincial government of Baluchistan holds the remaining 25 percent.
"We have had discussions with (the government) and are going to continue to have a dialogue with them with the objective of getting a mining lease and I believe that we'll be able to do that," Regent said at the Reuters Global Mining and Steel Summit in New York. He added that any resolution could take months to conclude.
Reko Diq is one of a group of projects Barrick would seek to bring to production after its current generation of development projects, which includes the Pascua-Lama project on the border of Chile and Argentina, and Pueblo Viejo in the Dominican Republic.
With several big builds already in the pipeline, Regent said, the company would eye undeveloped projects as possible acquisition targets, rather than advance-stage projects or producing mines.
"Our focus is really more on greenfield type projects, projects that have a higher degree of uncertainty around them, whether they be technical risks or permitting risks, and that I think plays to the strengths," he said.
He noted Barrick's growth ambitions would not be thwarted by lack of funding, as the company generates rich cash flows, and holds $2.6 billion in cash and a $1.5 billion undrawn line of credit.
"We've got lots of financial capacity to fund the projects that we're currently constructing, or fund an acquisition if we want," he said.
If opportunities to deploy capital -- in other words acquire assets -- don't materialize, he said, share buybacks or a hike to the shareholder dividend would be "on the table."
Barrick currently pays a semi-annual dividend of 20 cents per share. The payout was last raised in May 2008.
Regent said he was optimistic on the price of gold, which peaked above $1,200 an ounce in early December, but has since pulled back somewhat. It was at $1,120 an ounce on Tuesday.
"There seems to be pretty significant support for gold around the $1,100 level. We have seen gold drop down slightly below that, and there seemed to be pretty firm purchasing from places like India and China," where there is good demand for physical gold, he said.
The mineral sector has not been developed in Pakistan because it has not gone beyond the geological mapping and mineral exploration stage by and large.
The integrated role of geology, mining and metallurgy/ beneficiation has not been institutionalised to develop the natural resources in the country.
The mineral sector organisations such as Geological Survey of Pakistan, Pakistan Mineral Development Corporation and Pakistan Council of Scientific Research should play an integrated role to prepare pre-feasibility studies based on the modern concepts of mineral modelling.
The controversy of Reko Diq is due to this neglect and ignorance of already available research studies on Chaghi metallogenic belt in north western part of Balochistan.
Dozens of research papers and reports are available on porphyry deposits containing copper, molybdenum and gold in Chaghi metallogenic belt by GSP, UNDP and other international experts of repute.
The prominent cu porphyry type deposits distributed in Chaghi area are Saindak (leased to Chinese), Koh-i-Dalil (Reko Diq), Durban Chah, Dashte Kain, Ziarat Pir Sultan, Siah Koh, and a host of others.
GSP`s geologists Bhutta and Asad have published and unpublished reports in national and international journals on sulphide mineralisation in Chaghi.
Besides this, world renowned experts on porphyry copper and metallogeny, like Schmidt, Sillitoe and Jankovic have published research papers and reports along with GSP geologists.
Research and development (R&D) in mineral sector is criminally neglected while mineral resource cannot be developed and utilised without R & D.
Therefore, it is important that the full potential of all the mineral organisations should be put into operation, so that the stigma of less than one per cent contribution of mineral sector in national economy should be washed away.
MIRZA TALIB HASSAN
Karachi
Prices of rare earths, used in the manufacture of disk drives and smart bombs, have climbed as much as sevenfold in the past six months as China in July reduced its second-half export quota for the minerals by 72 percent. Molycorp aims to restart a mine in California in the second half of next year and produce about 20,000 metric tons of rare earth oxides by the end of 2012.
The U.S. Government Accountability Office, the investigative arm of Congress, warned in April of “vulnerabilities” for the military because of the lack of domestic suppliers of rare-earth materials used in weapons systems. The Pentagon is studying how to secure future supplies, and its report is due to Congress this month.
Vietnam, which has emerged as a potential new source for Japanese companies including Toyota Motor Corp., won’t sell rare earths in raw form, the Thanh Nien newspaper reported, citing the Department of Geology and Minerals. Instead the country aims to export more valuable processed rare earths.
While the elements aren’t as rare in nature as the name implies, they are difficult to find in profitable concentrations, expensive for Western producers to extract and are often laced with radioactive elements.
China has come to dominate the market because it has been able to produce the elements more cheaply and with fewer environmental restrictions than its competitors.
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China won’t use rare earths as a bargaining chip, Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, said today at a briefing in Beijing. The Chinese government has said it is reducing exports as part of a drive to improve efficiency in the industry and reduce environmental damage caused by mining.
Strong Fundamentals
“The Chinese are only exporting 30,000 tons of material to the rest of the world right now and the rest of the world needs 50,000 tons of this material a year,” said Molycorp’s Smith. “We don’t see the fundamentals of this changing anytime in the near future. The demand is like I’ve never seen it in 25 years in this business.”
Lynas Corp., a rare earths developer based in Sydney, estimates the global rare-earth market this year at $7.8 billion, or about a week’s sales at Wal-Mart Stores Inc. Still, China’s cutbacks have raised political tension because of the strategic importance of the metals used in Toyota’s Prius hybrid cars, Research in Motion Ltd. BlackBerrys, alternative energy generation and weapons.
The price of lanthanum oxide, used in hybrid batteries, has risen more than sixfold since second quarter to $50 a kilogram, according to Lynas Corp.’s website. Vehicles like the Prius contain about 10 kilograms of rare earths.
Alternatives
Japan’s Nidec Corp., the world’s biggest maker of motors for hard-disk drives, will start making motors for industrial machinery that don’t need rare-earth metals to reduce reliance on the materials, the Nikkei newspaper reported today. Production of motors that don’t use permanent magnets and don’t require rare earth metals will start in 2012, it said.
Molycorp rose 9.6 percent to $38.56 in New York yesterday after the U.S. House of Representative’s Science and Technology Committee Chairman Bart Gordon said he will seek to pass a measure that would boost rare-earth mining. The stock has tripled since the company raised $394 million in a July initial public offering.
Rare earths, a group of 17 metals including neodymium, lanthanum, cerium and europium, have industrial and national- security uses, such as in petroleum refining, fiber-optic transmission, computer disk drives, and military radar and missile-guidance systems.
Now that the Government of Pakistan has begun to see the potential in these mines, I don't think they would find it difficult to call for international assistance and also to start a competitive bidding process to benefit from the mines. The scrutiny of the earlier contracts should help ensure more transparency in the future. I like being optimistic - South Asia is mired in corruption in every country in the region, beyond doubt, but there are a lot of good people (easily the majority in every country, I am sure) and it is they who will ensure that progress takes place despite the worst efforts of the politicians and bureaucracies in trying to thwart it.
Shahid Noor Khan, a geologist at the Geological Survey of Pakistan, had discovered gold and copper deposits in the area in 1962.
Apart from Reko Diq and Saindak, eight more reserves were also discovered in the district with the help of international geologists. However, initial work has yet not been started.
Chaghai is the largest district of Pakistan spread over an area of over 700 kilometres – equal to the entire landmass of Khyber-Pakhtunkhwa province. The district includes plains, deserts and mountain ranges. Its population is about 150,000. Chaghai shares borders with Afghanistan and Iran. Baloch tribes straddle both sides of the border.
Geologist Khan’s discovery was not given proper attention by government authorities. However, later the government hired UN experts, who identified 10 gold and copper reserves. The Resource Development Corporation was established to exploit minerals in Saindak. In the 1990s an agreement was signed with a Chinese firm for the mining and processing of minerals there. Another contract was signed in 1993 for the exploration and pre-mining feasibility report and other technical works. According to geologists, the other reserves include Siah Chang reserves, spread over 3,000,000 square metres, Kabul Koh reserves, covering an area of 5,500,000 square metres, Ziarat Pir Sultan reserves over 16,200,000 squrare meters, OMI reserves, Gatori reserves, Cangord, Missi, Darban Chah and Max G White.
UN geologist Dr RH Sletto discovered all these reserves and informed the Pakistan government that feasibility studies can lead to acquisition of gold, copper and other precious metals from these reserves on a large scale.
According to experts, if Pakistan focuses on the development of infrastructure, technical expertise and manpower, it can get precious metals from these places for hundreds of years.
Once little known outside chemistry circles, rare earth metals have become increasingly vital to high-tech manufacturing. But as Malaysia learned the hard way a few decades ago, refining rare earth ore usually leaves thousands of tons of low-level radioactive waste behind.
So the world has largely left the dirty work to Chinese refineries — processing factories that are barely regulated and in some cases illegally operated, and have created vast toxic waste sites.
But other countries’ wariness has meant that China now mines and refines at least 95 percent of the global supply of rare earths. And Beijing has aroused international alarm by wielding that virtual monopoly as a global trade weapon.
Last September, for example, China imposed a two-month embargo on rare earth shipments to Japan during a territorial dispute, and for a short time even blocked some shipments to the United States and Europe. Beijing’s behavior, which has also included lowering the export limit on its rare earths, has helped propel world prices of the material to record highs — and sent industrial countries scrambling for alternatives.
Even now, though, countries with their own rare earth ore deposits are not always eager to play host to the refineries that process them. An American company, Molycorp, plans to reopen an abandoned mine near Death Valley in California; but Molycorp must completely rebuild the adjacent refinery to address environmental concerns.
All of this helps explain why a giant Australian mining company, Lynas, is hurrying to finish a $230 million rare earth refinery here, on the northern outskirts of Malaysia’s industrial port of Kuantan. The plant will refine slightly radioactive ore from the Mount Weld mine deep in the Australian desert, 2,500 miles away. The ore will be trucked to the Australian port of Fremantle and transported by container ship from there. As many as 2,500 construction workers will soon be racing to finish the world’s largest refinery for so-called rare earth metals — the first rare earth ore processing plant to be built outside China in nearly three decades.
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ISLAMABAD, June 26 (Reuters) - Chile's Antofagasta and Canada's Barrick Gold are likely to win mining rights for a $3.3 billion copper and gold project in Pakistan, a senior provincial government official said on Sunday.
The companies are partners in the Tethyan Copper Co (TCC) joint venture, which has a 75 percent interest in the Reko Diq project in the southwestern Baluchistan province.
TCC has carried out exploration but wants to expand its presence through mining.
Baluchistan has huge natural resources. However, growing anger over outsiders exploiting Pakistan's biggest and poorest province makes it difficult for investors to gain access.
Separatists have for decades waged a low-level revolt over control of Baluchistan's resources, which they say are unfairly exploited by the country's richer and more powerful provinces.
Reko Diq holds an estimated 5.9 billion tonnes of mineral resources with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams a tonne, according to data released by Antofagasta.
TCC completed exploration on Reko Diq last year and submitted a feasibility report for mining.
A senior Baluchistan government official told Reuters that TCC's request for a mining licence was under consideration.
"If they fulfil the conditions then we have no objection at all," Baluchistan chief secretary, Ahmed Bakhsh Lehri, said.
No other companies have applied for mining permission, mining and government officials say.
Last week, the Baluchistan government announced it would set up a facility to refine copper and gold concentrates extracted from Riko Diq.
TCC has said it would sell the concentrate from Reko Diq to the provincial government on a commercial basis if it gains permission to mine.
In a bid to secure the deal, TCC has also offered to arrange financing for the government's 25 percent share of investment in the project through a soft loan and to pay the interest, according to a company document seen by Reuters.
The first stage of the project, which is hoped to start production in 2015, would produce 200,000 tonnes of copper and up to 300,000 ounces of gold a year, the company said.
http://www.reuters.com/article/2011/06/26/pakistan-mining-baluchistan-idUSL3E7HQ02920110626
At a time when the distance between American and Pakistani priorities in the post-Osama period continues to grow, China is passionately vouching for Pakistan's entry into the Shanghai Cooperation Organization (SCO), which is seen as the upcoming Asian NATO . For some time now, China and Pakistan have aspired to create a regional alliance comprising the Arab countries, Central Asian Republics, Iran, Afghanistan and Turkey, and SCO could most likely help that dream come true.
But there is more to it than meets the eye. The lynchpin connecting these countries will be Gilgit Baltistan, a disputed region rivaling Serbia in area. Although constitutionally a part of India and bordering China's Xinjiang province, Afghanistan and Tajikistan, Gilgit Baltistan remains in Pakistani control since 1947.
The political uncertainty owing to India's claim to the region is especially worrisome for China, which currently depends on her southern neighbour for two reasons. Firstly, China uses transit routes of Gilgit Baltistan to reach Pakistan, Iran, Afghanistan and the ports along the coastline of Arabian Sea; and secondly, Chinese mining companies control the region's much valued mineral deposits of uranium, gold, copper, marble and precious stones.
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But the person, making the headlines in local newspapers for criticizing foreign miners, is Advocate Shahbaz Khan, the chairperson of Metals, Minerals and Gems Association of Gilgit Baltistan , who has recently accused some individuals of acquiring 35 tonnes of certain mineral deposits from uranium-rich Karkalti village of Ghizer district, and smuggling to China.
Shahbaz is also critical of a uranium exploration company called Mohsin Industries, which has sought partnership with the locals as well as Chinese and Korean miners. Last year, Mohsin Industries was banned for attempting to smuggle uranium outside Pakistan. However, the company has recently been awarded exploration licenses in the uranium-rich areas of Sakwar, Minawar, Pari Bangla and Bonji, as well as parts of Shigar district and Skardo.
Locals accuse Mohsin Industries of bypassing standard procedures to obtain licenses. Mirza Hussain, a member of the Gilgit Baltistan Legislative Assembly (GBLA) from Nagar, believes that the owner of the Mohsin Industries receives special treatment due to his close links with the director general of the Federal Mineral Development Agency and Syed Mehdi Shah, who is currently the chief minister of Gilgit Baltistan. Hussain also suspects that its owner has established links with members of pro-Taliban groups such as Jamiat Ulema-e-Islam of Maulana Fazlur Rehman.
Today, Chinese miners and their affiliates are everywhere in Gilgit Baltistan especially in the Hunza-Nagar district, which is rich in uranium and certain minerals used in space technology. Some areas in upper Hunza, for instance, like the Chapursan valley have become no-go areas, where the Chinese continue their work on tunnel building and mineral exploration.
A Pakistan province says a 200,000-page feasibility study for the development of a massive gold and copper deposit doesn't go far enough.
The government of Baluchistan raised observations and objections on the mining-license application for the deposit, which is one of the largest in the world, and has given the project developer 30 days to respond, said a senior official in the provincial government.
The $3.4 billion project is slated to become Pakistan's largest single foreign investment but faces potential delays or even cancellation, depending on the conditions that may be imposed on the mining license.
The observations and objections ...
http://online.wsj.com/article/SB10001424053111903791504576586391736854676.html
The Reko Diq project is a large gold and copper porphyry resource located in the dry desert conditions of southwest Pakistan within the remote and sparsely populated province of Balochistan .
It is expected to contain some 20.9 million ounces of gold and 12.3 million tons of copper .The copper-gold deposits at Reko Diq are believed to be even bigger than those of Sarcheshmeh in Iran and Escondida in Chile.
A further 14 mineralized porphyry bodies are known to exist, with the potential to place the Reko Diq Project among the largest undeveloped copper resources on the globe.
At today’s international prices of Gold at $1650 an ounce (with cost of production $375/ounce), and Copper with cost of production at $1,500/ton , the profit works out to almost $4 billion for gold and $2 billion for copper annually.
BHP Billiton initially signed the exploration licence with the government of Balochistan in 1993, while Tethyan Copper Company (TCC) was being formed in Australia, with BHP Billiton having 75 per cent and the Balochistan government 25 per cent.
With gold and copper established in substantial quantity, BHP sold its stake 37.5 per cent each to the Chilean Conglomerate Antofagasta Minerals and the Canadian company Barrick Gold.
However, the project might take a long way to happen as advancing influence of terrorists in the region is the single most threat that needed to address immediately.
Even if the authorities cleared the project, it will required a massive effort by the parties involved in the mining to actually start digging the treasure out, analysts said.
Pakistan is at the moment remained a dangerous place to start any kind of business for foreigners, especially to westerners as some forces within the government are promoting and providing safe haven to terrorists operating in the country, analysts added.
Considering the situation, country’s dream gold project is unlikely to happen atleast in the next ten years, they added.
http://www.commodityonline.com/news/Pakistans-dream-gold-project-still-a-long-way-away-42605-3-1.html
A dispute between Balochistan government and Tethyan Copper Company (TCC) has taken an ugly turn that is likely to jeopardise $3.5 billion in foreign investment and a potential bilateral treaty between Pakistan and Canada.
TCC, a joint venture between Chile-based Antofagasta Company and Canada’s Barrick Gold Corp, seeking a mining license for Reko Diq copper and gold reserves, served a “notice of dispute” to the Balochistan government on Wednesday.
The partners filed the notice after the provincial government refused to meet the company executives and did not extend the 30-day deadline for it to respond to objections that the provincial government had risen over a mining lease.
The provincial government’s attitude disappointed the company which did not have any other option but to invoke dispute resolution clauses of the Chagai Hills Exploration Joint Venture Agreement, Canadian High Commission officials told The Express Tribune.
The provincial government had raised ten objections over mining licence application submitted by the TCC and gave it a month’s deadline to respond. The company repeatedly requested for time to better understand the objections but the government refused to either give time or extend deadline to file a comprehensive response, the diplomats said.
Under the safeguard clauses of the treaty, the two sides now have 120 days to meet and reach an agreement.
High Commission officials said if both parties could not resolve the dispute, the company will have to seek a resolution through international arbitration and seek compensation.
Reuters quoted the TCC Chief Executive Tim Livesey as saying: “It is my feeling that there is a degree of confusion … and I hope we can resolve the dispute”.
The company has so far spent about $400 million in the exploration and feasibility study and would not leave so easily, the diplomats added.
According to the feasibility study of the project, there is approximately $127 billion worth gold and copper reserves – an estimate contested by the Pakistani experts who say that the real value is over $260 billon. Of the earnings, 52% would go to the federal and provincial governments in shape of taxes, royalty and other incomes while the provincial government would have 25% equity partnership without risk investment.
http://tribune.com.pk/story/279462/reko-diq-reserves-mining-aspirant-serves-notice-to-provincial-government/
ISLAMABAD: Pakistan has 1,339.25 tonnes of gold reserves situated in Balochistan with 63.50 tonnes at Saindak and 1275.75 tonnes at Reko Diq, sources told Daily Times on Monday.
These two major gold reserves are situated in district Chagi, Balochistan. The sources further said the Saindak Copper-Gold Project, Balochistan is the only project in the country, which is producing gold/silver as a by-product in a normal quantity. The gold production was 7.891 tonnes and silver 11.293 tonnes during five years from 2005 to 2009. Occurrence and showing of gold and silver had been reported from various parts of the country, including Balochistan, Gilgit-Baltistan and Khyber Pakhtunkhwa. However, reserves of these occurrences had not been confirmed except in Saindak and Reko Diq.
In 2006, the production of gold was 1.410 tonnes, while silver was 2.403 tonnes, in 2007 gold was 1.576 tonnes and silver 2.136 tonnes, in 2008 gold was 1.542 tonnes and silver 2.088 tonnes, while in 2009, the gold production was 1.592 tonnes and silver 2.157 tonnes. The country also has rich copper resources, and according to estimates there are about 4.805 billion tonnes copper reserves of which majority are in Balochistan and some nominal quantity in Federally Administered Tribal Area (FATA) and Gilgit-Baltistan. Balochistan’s copper reserves consists of Saindak with 412 million tonnes, Reko Diq 3.720 billion tonnes, Dhasht-e-Kain 200 million tonnes, Ziarat Pir Suyltan 200 million tonnes, Kabul Koh 50 million tonnes, Missi 100 million tonnes and Bandegan 0.032 million tonnes.
About 123 million tonnes of copper reserves in FATA areas Boya, Shinkari-North Waziristan have been found, the sources added. In Gilgit-Baltistan (Bulashgah, Gilgit) 0.5 million tonnes of copper reserves were discovered. Officials in the Ministry of Petroleum and Natural Resources told this scribe that feasibility studies have been conducted for copper-gold projects at Saindak and Reko Diq in the year 1988 and 2010, respectively. The Saindak project is in production since 2003.
Reko Diq deposit is in development phase and government of Balochistan as regulator is processing application for conversion of exploration licence into long-term lease. At present, the officials said two foreign companies are working for the copper-gold deposits, MCC of China on Saindak Project and Tethyan Copper Company, joint venture of government of Balochistan 25 percent, Antofagasta-Chile 37.5 percent and Barrick Gold-Canada 37.5 percent on Reko Diq project.
The officials further said Saindak Copper Gold project is the only productive unit in the country. The government of Balochistan receives royalty at the rate of five percent of sale proceeds and 60 percent share from Saindak Metals Limited/government of Pakistan.
Based on current production level, the annual revenue of the province from this project is estimated at Rs 1.300 billion. As per feasibility study, the life of mine of Reko Diq project is 56 years and estimated annual revenue of government of Balochistan during the above period is $110.8 million, the officials maintained.
However, private sources opposed the Reko Diq project exploration/mining lease to foreign companies. They describe it as the most unfair business deal of the decade, the multi-billion-dollar Reko Diq copper-and-gold project has been placed at the mercy of a consortium of companies who may walk away with its riches, robbing the country of a golden opportunity to lift itself out of its growing external debt. Private sector said that the geologists have estimated that Reko Diq contains mineral deposits worth $500 billion and if the authorities did not take action immediately, this golden opportunity of turning around Pakistan’s fate will be lost.
http://www.dailytimes.com.pk/default.asp?page=2011\11\15\story_15-11-2011_pg5_1
And 500 million tons of copper at $7,000 a ton is worth US$3.5 trillion.
At current prices, Reko Diq gold & copper deposits are worth over US$4 trillion.
TCC, the Canadian-Chilean joint venture, disagrees with the above.
According to the TCC, the mineral resource at Reko Diq is estimated at 5.9 billion tonnes. From this resource, an estimated 2.2 billion tonnes of economically mineable ore, with an average copper grade of 0.5 per cent and an average gold grade of 0.3 gms/tonne will be processed to produce 10 million tonnes of copper and 13 million ounces of gold in the form of payable metal in about 56 years of mine life.
On May 25, the Supreme Court, while hearing several petitions against the possibility of giving to a foreign company (TCC) a contract for mining copper and gold deposits in Reko Diq, had vacated its stay order which restrained the Balochistan government from issuing mining lease to any company, according to Dawn newspaper.
Pakistan's Reko Diq, an untapped copper and gold mine of fabulous potential, was meant to be the biggest foreign investment in the country's mining sector, but it's beginning to look more like fool's gold to the companies involved.
Set in one of the most godforsaken places on earth, in a Baluchistan desert at the foot of an extinct volcano, Reko Diq was expected to yield revenues of at least $60 billion over the 56-year life of the mine.
Tethyan Copper Company (TCC), a joint venture between Chile's Antofagasta and Canadian-based Barrick Gold, had sunk $220 million over the past five years into exploring the deposit in the ochre sand desert, where temperatures reach 130 degrees Fahrenheit in the summer. It was planning to invest a total of $3.3 billion when the provincial government abruptly refused to grant a mining license last year.
TCC says it never did get an explanation.
"It's been difficult to define what their actual issues were," Tim Livesey, CEO of TCC, told Reuters in an exclusive interview. "We went back to them for clarification, as many of their issues are not covered in the Baluchistan Mining Regulations."
A local government official, who requested anonymity, said TCC took too long to complete its feasibility study and that it was "cheating" Baluchistan by under-valuing the worth of the copper and gold.
"They are the monopoly," the official said angrily. "They are the monopolists of the gold! They don't want to disclose the worth of the gold in Baluchistan."
The case is now before the Pakistan Supreme Court, and TCC has filed for international arbitration. The Baluchistan government, meanwhile, has recently handed out exploration permits in the area around Reko Diq to new Pakistani and Chinese companies with no mining experience.
Pakistan is already viewed as a high risk investment due to chronic civil and sectarian conflict, terrorism, corruption, poor regulation and chronic power outages. Legal uncertainty would only add to that list.
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The Baluchis have staged five uprisings since the province was incorporated into Pakistan in 1948, each time demanding more control over their natural resources.
Because of this, some analysts speculate that the powerful Pakistani army sees Reko Diq as a strategic resource and hopes to keep the mineral wealth out of the hands of the Baluchistan government, in case separatist political parties win provincial elections.
The army, acknowledging Pakistan's inexperience in large-scale commercial mining, might also want to bring China into the picture. China is the world's largest consumer of copper, has experience in large-scale mining, and has a record of building infrastructure in exchange for resources in developing countries.
"Everywhere I look, there are indications of Chinese interest in developing this area, more than Barrick Gold could," said Shamila Chaudhary of Eurasia Group.
The Chinese government-owned Metallurgical Construction Corp (MCC) already runs the nearby Saindak Copper-Gold Project, and submitted a counter-proposal to develop the Reko Diq mine during a visit to Pakistan by Chinese Prime Minister Wen Jibbao in December 2010. Pakistan media say MCC's proposal was similar to TCC's, but was sweetened with a larger share of the royalties going to the government. This was after TCC had submitted its feasibility report. MCC has not commented on those reports.
TCC is still hoping for a negotiated settlement outside arbitration, but Chaudhary thinks its parent companies are looking to cut their losses.
"From what I hear on the Barrick Gold side ... they're looking to come to closure on this issue," she said.
http://www.reuters.com/article/2012/02/17/us-pakistan-goldmine-idUSTRE81G06E20120217
SHANGHAI—Molycorp Inc.'s $1.3 billion deal to acquire a key processor of rare-earth minerals has sparked a warning from industry officials that it could reinforce China as the main source for specialized magnets used in consumer electronics and sophisticated weapons.
Molycorp said Thursday it plans to buy Toronto-listed Neo Material Technologies Inc., one of the world's leading experts in chemistry needed to transform rare earths—minerals used in applications that range from car batteries to advanced weaponry—into specialized magnets. Molycorp said the deal creates the most diversified rare-earth company outside of China, which dominates the industry.
The transaction, said Mark A. Smith, president and chief executive of Greenwood Village, Colo.-based Molycorp, links a world-class miner with a world-class processing company.
But the deal also paves the way for Molycorp to ship minerals from its California mine to the Chinese operations of a Neo Material arm called Magnequench, in a reminder of how much technological rare-earth capability resides in China.
Ed Richardson, president of the U.S. Magnetic Materials Association, says the plan is worrisome. The U.S. is already "dangerously dependent on China" for rare-earth-magnet materials, including to supply its weapons systems, Mr. Richardson said in an email. Molycorp's "export of U.S. rare earth assets into China will only exacerbate this problem," he added.
Mr. Smith played down political and historical implications of the deal that now ties Molycorp, Magnequench and China. He said sending rare-earth oxides to China is a bid for "higher volume, higher margin" that will only reduce production costs in the U.S. and by implication boost supply of the metals for industrial users. "It does not in any way deplete our ability to serve the market outside of China whatsoever," Mr. Smith said.
While much of the debate over China's hold on the rare-earths market has focused on mining, the Molycorp deal highlights China's ability to process mined oxides into metals that help electric cars hold their charge, make wind turbines turn and bring precision to military gyroscopes.
Like most developments in the tiny but critical rare-earth industry, the merger is a response to China's market supremacy. Companies such as Molycorp and Australia's Lynas Corp. are trying to provide supply alternatives to China, which has 90% market share in many aspects of the industry. It comes as analysts predict a formal challenge of China at the World Trade Organization over its rules to limit export of some rare-earth materials, rules that Beijing says are meant to protect the environment but Washington labels a trade barrier.
Analysts concur with Molycorp's assertion that the acquisition of Neo Material gives it significant new technological capability, particularly in powders used in sophisticated high-performance bonded magnets. The U.S. company becomes more global, with production and sales in a number of new markets. Molycorp argues that the deal also can lower production costs as the company restarts its California mine, which was once the world's No. 1 rare-earth mine before it was closed several years ago due to falling rare-earth prices and environmental concerns....
http://online.wsj.com/article/SB10001424052702303717304577274882847317306.html
British High Commissioner to Pakistan Adam Thomson has said that the verdict in international arbitration on the Reko Diq saga may have chilling affects on foreign investors.
“Supreme Court of Pakistan's verdict in certain cases whether it relates to Reko Diq or others is a sign of discouragement for foreign investors,” Adam Thomson said while talking to selected journalists on Wednesday night.
Tethyan Copper Company (TCC) filed for international arbitration to protect its legal rights after Balochistan rejected its mining lease application. Tethyan Copper – a joint venture between Chilean copper producer Antofagasta and Canada's Barrick Gold – owns the massive Reko Diq project in Balochistan with reserves estimated at 2.2 billion tons of gold and copper.
“There is a risk of misconception from some of its decisions and Reqo Diq is the latest one,” He said that Pakistan should think carefully about it.
Responding to questions about litigation between government of Pakistan and international companies, the British High Commissioner said that a strong judicial system will not only uphold Pakistan's interest but was extremely important to foreign companies.
He said that Pakistan and the United Kingdom signed a Bilateral Investment Treaty (BIT) in 1994 providing protection to companies in both countries. Pakistan is attracting British companies after promulgation of this agreement, he added.
He said that the 10% increase in trade compared to the previous year was not bad keeping in mind the global recession.
“UK-based exploration company Premier Oil has been working in the oil and gas sector of Pakistan for the last 10 years,” he said adding that there are more such companies.
He said that British companies are doing very well in Pakistan which reflected from their profits. “These companies also face challenges with regulatory bodies being the biggest challenge,” he said. Although, he said, Pakistan in South Asia is comparatively a good place to do business, corruption is also a problem as few companies find it difficult to work in certain sectors.
UK has very stringent Anti-Bribery Act which governs UK companies in Pakistan so that they would stay clean. “Some changes in reorganisation in government, ministries, regulatory bodies after the 18th Constitutional Amendment are also challenging to those British companies considering to invest in Pakistan,” he said adding that perception of insecurity is very high among them. “When I'm in UK, I try hard to overcome such impressions,” he added.
“India is second largest investor foreign manufacture holder in UK,” he said adding that all Pakistani companies should also see UK as a gateway to European Union. “We are the second largest investor in Pakistan and aim to become the largest,” he concluded.
http://paktribune.com/business/news/Pakistan-should-think-about-Reko-Diq-carefully-Thomson-9994.html
A PPL statement here on Saturday said that developed by NXT Energy Solutions (NXT), a geophysical service company based in Canada, SFD is a proprietary cutting edge, eco-friendly airborne reconnaissance method to identify potential hydrocarbon traps and reservoirs in a time- and cost-effective manner, especially in unexplored on- and off-shore frontier regions with limited access and infrastructure.
It said that the SFD is expected to be particularly useful in the current energy scenario, warranting fast track identification of, and production from, relatively deeper, more complex reserves of hydrocarbons to bridge the supply-demand gap.
Welcoming the guests, PPL's Managing Director and Chief Executive Officer, Asim Murtaza Khan, underscored the increasing importance of deploying latest exploration technology to meet production and reserves replacement targets to address the current deficit and ensure future energy security. SFD technology has been successfully applied by leading oil and gas companies in North America, Colombia and other countries. PPL is proud to be the first company to apply the technology in Pakistan', he said.
http://www.brecorder.com/top-news/108-pakistan-top-news/98349-ppl-introduces-stress-field-detection-technology-in-pakistan.html
Pakistan’s top court on Monday declared invalid a lease for one of the world’s richest deposits of gold and copper held by a Canadian-Chilean consortium that includes Vancouver-based giant Barrick Gold Corp.
Barrick, the world’s largest gold producer, and Chile’s Antofagasta Minerals, each own a 37.5-per-cent share, as the Tethyan Copper Company, in the largest Foreign Direct Investment mining project in Pakistan.
Their plan was to build and operate a copper and gold open-pit mine at Reko Diq in the Chagai district of the southwestern province Baluchistan, the most deprived part of Pakistan, rife with Taliban, sectarian and separatist violence.
Barrick and Antofagasta say the proposed plant could produce 600,000 tons of copper and 250,000 ounces of gold a year, but in 2011 work came to a standstill after the local government refused to renew the consortium’s mining lease.
The provincial government in Baluchistan is also the sleeping partner in the Reko Diq project with a 25-per-cent stake.
Reasons for the dispute are murky, but some analysts suggest that China, a close Pakistan ally, is also interested in the deposits.
Pakistan’s Supreme Court on Monday declared “not valid” the initial 1993 exploration agreement between the Baluchistan government and Australian mining group BHP, since BHP Billiton Ltd.
It said the agreement ran counter to Pakistan’s mineral development act and mining concession rules, and therefore to transfer it to the Canadian-Chilean consortium is also “illegal, void and non est”.
Experts say mining in Baluchistan is dominated by small companies focused primarily on marble and granite, which waste up to 80 per cent of mined minerals because of poor blasting techniques.
They also call for more transparent polices to allow business to flourish
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/pakistan-voids-gold-copper-lease-held-by-barrick-consortium/article6994959/
TORONTO—Pakistan's top court has declared invalid a lease that would allow a consortium that includes industry giant Barrick Gold Corp. ABX.T -1.67% to mine one of the world's richest deposits of copper and gold, a person familiar with the matter said.
Pakistan's Supreme Court made the ruling on Monday, the person said. The move adds further uncertainty to a project that has been beset by local squabbles.
The Reko Diq project is being run by Tethyan Copper Co., in which Toronto-based Barrick Gold and Chilean copper giant Antofagasta Minerals ANTO.LN -1.56% each own a 37.5% share. The remaining 25% is owned by the government of Baluchistan, the region of Pakistan where the mine is to be based.
The proposed plant could produce 600,000 tons of copper and 250,000 ounces of gold a year, according to industry estimates.
Last year, Tethyan filed arbitration proceedings against the Islamic Republic of Pakistan and the local Baluchistan government after officials refused to grant a mining lease to develop the $3.3 billion project.
Tethyan has already invested more than $220 million since 2006 in the project and completed a feasibility study to develop it. The project is slated to become the country's largest single foreign direct investment if it goes ahead.
Given the early-stage nature of the project, Barrick doesn't include Tethyan in statements of its reserves.
http://online.wsj.com/article/SB10001424127887323482504578227692948679694.html
The US EIA report estimates Pakistan's total shale oil reserves at 227 billion barrels of which 9.1 billion barrels are technically recoverable with today's technology. In addition, the latest report says Pakistan has 586 trillion cubic feet of shale gas of which 105 trillion cubic feet (up from 51 trillion cubic feet reported in 2011) is technically recoverable with current technology.
The top ten countries by shale oil reserves include Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels).
Pakistan's current annual consumption of oil is only 150 million barrels. Even if it more than triples in the next few years, the 9.1 billion barrels currently technically recoverable would be enough for over 18 years. Similarly, even if Pakistan current gas demand of 1.6 trillion cubic feet triples in the next few years, it can be met with 105 trillion cubic feet of technically recoverable shale gas for more than 20 years. And with newer technologies on the horizon, the level of technically recoverable shale oil and gas resources could increase substantially in the future.
During a recent research visit to Chile, I had a rare opportunity to meet, Fernando Crisosto, a social engagement officer who had worked with Antofagasta Minerals and visited Pakistan several times when the project still had some potential for development through joint foreign engagement. Fernando was very nostalgic about the time he spent on the Reko Diq site and showed tremendous affection for the people of Balochistan and of Pakistan. Unfortunately due to mismanagement at various tiers of government, errant data being communicated, and the rise of resource nationalism, the project is now stuck in the courts and international arbitration mechanisms. No doubt the distrust was also exacerbated by badly sourcing the feasibility study of the project by a Canadian firm SNC-Lavalin which was subsequently been ”blacklisted” by the World Bank. Fernando indicated to me that even though their plans for social development were far more detailed than the neighbouring Saindak mine which is operated by a Chinese government partnership, there was a deficiency of community engagement and communicating those plans effectively to tribal leaders.
Nevertheless, Baloch or Pakistani nationalists alike should first of all be very cautious about believing random data points and value of the reserve at Reko Diq which are asserted in media appearances by said “experts.” The geologic reality of the Reko Diq deposit is that it is essentially a low-grade copper-gold porphyry which clearly has much potential but is by no means “Solomon’s fortune” as it is sometimes made out to be. Utterly absurd and unsubstantiated numbers for the value of gold and copper reserves in Afghanistan and Pakistan are wantonly paraded in prominent media venues in both countries. For example one news story in Pakistan’s most widely circulating English daily this year asserted that the value of the mineral wealth in Reko Diq was in excess of $3 trillion. This number has absolutely no empirical or even remotely rational basis. Indeed the estimated value by the World Gold Council at current prices of all the gold ever mined in the history of the planet is around $8.8 trillion. It would be delusional to think that a low-grade deposit in Balochistan has more than 1/3 the value of the gold ever mined in the history of the Earth!
Pakistan’s media should consult more deliberately with international geological experts who do not have any particular vested interest in the development of the project rather than interviewing hyper-nationalist geologists that have limited substantiation of facts and grossly exaggerate value of the reserve as well as Pakistani technical expertise to extract the resource. In particular the research of Pakistani-Canadian mining academic Professor Laeeque K Daneshmend deserves greater appreciation and engagement to counter the unsubstantiated data being branded about in the media.
Yet conspiracy theorists continue to churn out estimates which have no basis in reality and are misleading the Baloch and Pakistani public. Further misinformation about the Chilean company that invested in this project has also been spread by some of these negative elements. For example in my last visit to Pakistan I heard baseless rumours that the Reko Diq mining concessions was now owned by “Zionist” family interests. Regardless of whether or not such ownership should even be a concern in commercial contracts, it is patently not true. Antofagasta Minerals is owned by the Luksic family of Chile that has Croatian origin. The founder of the company and family patriarch Andronico Luksic (died in 2005) had a Croatian father and a Bolivian mother and absolutely no connection to any ethno-religious causes.
http://newswatch.nationalgeographic.com/2013/11/25/chile-and-pakistan-a-missed-opportunity-for-mineral-relations-at-reko-diq/
Reko Diq is a copper and gold mine in Chagai district of Balochistan province with a value up to $500bn. It holds about 5.9 billion tonnes of ore, making it the world’s fifth largest deposit of gold and copper.
But the huge project has ground to a halt over a dispute between the provincial government and the miners.
Tethyan Copper Company (TCC) – a joint venture of Barrick Gold of Canada and Antofagasta of Chile – had been awarded a licence for exploration in the Reko Diq area in 2006. In 2011, TCC’s application for a mining lease for the project was rejected by the Balochistan government of then-chief minister Aslam Raisani, which decided to run the project on its own.
TCC took the case to the international arbitration court claiming damages because it had invested more than $500 million in exploration and feasibility studies.
“There is potential … for multiple mine developments over the next few decades. By refusing a mining licence without good grounds, it’s sending quite a negative signal to the exploration/mining community,” said Tim Livesey, the chief executive of TCC, in 2012.
The rejection of a mining licence to the company after an exploration permit had been granted was an unusual decision by the government. Mr Raisani abruptly closed off communication with the company and even refused to meet its executives.
Mr Raisani rejected the TCC bid in the name of protecting the legitimate interest of Balochistan, but did his decision really help the least developed province and its people?
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Metallurgical Corporation of China (MCC) came with a counter proposal for a mining lease for Reko Diq and offered Balochistan a larger share in income and royalty.
In 2002, MCC had acquired a lease the Saindak copper and gold project in the same district as Chagai, which expired in 2012. If the Raisani government was serious in its desire to develop deposits using local firms, why did it not oppose the five-year extension in the lease period of the Saindak project?
The Reko Diq project became controversial after news stories alleged that the Reko Diq gold mines were being secretly sold to foreign firms for peanuts.
The dispute between TCC and Balochistan began after the resignation of Mr Musharraf in 2008. Under his administration, TCC was awarded the project with mining rights and it signed a joint-venture agreement with Balochistan holding 25 per cent interest in the project. But in December 2009, Balochistan said it was cancelling the TCC deal.
That triggered a blame game, with each side accusing the other of violating mineral rules. In January 2013, former chief justice of the supreme court Iftikhar Chaudhry declared the Reko Diq contract between the Balochistan and TCC void.
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Arbitration proceedings have further delayed the mine’s development, which has not been worked since 1993 when BHP Billiton signed a deal with Balochistan. While BHP had an exploration deal, it did no practical work and sold its 75 per cent interest to TCC in 2000. In 2006, TCC was taken over by Antofagasta and Barrick Gold.
TCC deserves credit for the discovery of the huge Reko Diq deposits. The company was willing to make an investment of $5bn over five years. It could have been the biggest foreign-financed project in the country’s history. But the short-sighted policy of the government meant this potential game changer never got off the ground.
What has been the outcome of the dispute so far? The country has missed a huge foreign investment. It has closed the door on technology transfer in mining into Pakistan and discouraged foreign firms eyeing up its mineral deposits.
http://www.thenational.ae/business/economy/pakistans-500bn-gold-mine-kept-under-wraps#full
Pakistan on Wednesday said it has discovered major reserves of iron ore as well as copper, silver and gold in its central province of Punjab.
The reserves were found in Chiniot, around 160 kilometres northwest of Lahore, by Chinese group the Metallurgical Cooperation of China.
A senior provincial administrative official told AFP that initial estimates indicated 500 million tonnes of iron ore, a primary ingredient in steelmaking, had been discovered.
He said the Chinese company has expressed interest in setting up a steel mill on the site, adding that the extracted iron had been tested in Swiss and Canadian laboratories, which found 60-65 per cent of it to be high grade.
The official added that silver, copper and gold samples would also be sent for testing soon.
Speaking at the site on Wednesday, Prime Minister Nawaz Sharif said the discovery could help Pakistan's stuttering economy turn a corner and end its “begging bowl” culture.
“It is Allah's blessing that under the lush green fields rich deposits of copper, iron and gold have been found, which will help the country get rid of the 'begging bowl' for good,” Nawaz said.
Conflict, instability, corruption and a chronic energy shortage have hampered Pakistan's economy for years. The IMF granted a $6.6-billion loan to Pakistan in September 2013 on the condition that it carry out extensive economic reforms, particularly in the energy and taxation sectors.
http://www.dawn.com/news/1162943
The university is merely 12-year-old. It is amazing to see how this institution has transformed itself into one of the outstanding places for learning in the country. The university, first housed in an abandoned textile mill on the outskirts of the city, has re-engineered and converted the buildings into an architectural marvel. Words cannot explain this change that houses some of the best facilities, laboratories, classrooms, auditoriums and sunlit corridors, lobbies and halls. Important as they are, the physical structures tell very little about the human development they facilitate.
Having visited so many of the universities in Pakistan, old and new, BUITEMS makes a lasting impression of positive change taking place in Balochistan. First, it has highly qualified faculty members, mostly with foreign degrees, and opting to serve in their home province. The congenial atmosphere of the university also continues to attract teachers from other provinces. Just to give you an idea, it has 49 PhDs working and 137 more enrolled in some of the best universities abroad. Second, it has 7,523 students from various parts of the province with representation from other provinces and Afghanistan, facilitating provincial and national diversity. Third, more than 33 per cent of the students receive financial assistance from the university. It is refreshing to see that BUITEMS is free of disruptive student politics that have ruined a good number of national universities in Balochistan and other provinces.
It is the vision, commitment and hard work of the faculty and the Vice-Chancellor, Engineer Farooq Ahmad Bazai, who have contributed to the rise of this university that offers hope and opportunity to young men and women in Balochistan to excel. There is more. Starting with the University of Balochistan, the first-ever university to be established in the province in 1972, Balochistan now has six universities in the public sector with a lot of support from the Higher Education Commission for infrastructural development and scholarships for training of faculty in foreign universities. The present Balochistan government of Dr Abdul Malik Baloch has shown far greater commitment and ownership of public education than any government in the history of the province. It now spends about 26 per cent of the budget on education.
The point is that the usual prism and the lenses we often use to look at Balochistan and the country require some dusting and realigning. Fixed views and fixed lenses never help grasp the reality of change anywhere.
http://tribune.com.pk/story/881452/a-world-class-university-in-balochistan/
https://www.economist.com/news/business/21736185-just-1-vast-reserve-discovered-1992-could-supply-fifth-countrys-current
PAKISTAN’s enormous mineral wealth has long lain untapped. Since a 1992 geological survey spotted one of the world’s largest coal reserves in Thar, a scrubby desert in the southern province of Sindh, prospectors have hardly dug up a lump. Among those to flounder is a national hero. Samar Mubarakmand, feted for his role in Pakistan’s nuclear-weapons programme, has just shut the coal-gasification company he founded in 2010, when he vowed on live television to crack Thar.
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To such qualms, the government offers three rejoinders. First, severe power shortages have long blighted the nation, and renewable sources cannot offer the daylong, year-round power it needs. Second, coal accounts for less than 1% of current generation, compared with 70% in neighbouring India and China. And third, domestic coal would allow the country to forgo expensive imports of the fuel for newly built power stations, a drain on fast-dwindling foreign-exchange reserves.
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Eight years ago Engro bought the rights to one of Thar’s 13 blocks, containing 1% of the reserve (more than enough given the gargantuan size of the mine). To work on extraction, it formed the country’s biggest ever public-private partnership, the Sindh Engro Coal Mining Company (SECMC), in which Engro digs and the state provides infrastructure. Relying on the state can break strong firms. Engro itself almost went bankrupt in 2012 after the government refused to honour a sovereign guarantee to provide gas to one of its fertiliser plants. Yet without similar government support, no other Thar block-owners have secured financing, leaving Engro’s diggers, which began work last year, to move ahead.
The endeavour benefits from being in the group of infrastructure projects that make up the $62bn China Pakistan Economic Corridor, a hoped-for trade route. Western banks shook their heads when approached about a coal project, so Engro has relied on Chinese financing. Analysts note an irony in China’s promotion of coal abroad as it withdraws from the fuel at home. Handling the extraction at Thar is the China Machinery Engineering Corporation, a state-owned firm with expertise beyond Pakistan’s reach.
Around 126 metres below the sands of Thar, with just 20 more to go, Engro’s diggers can now almost touch their prize. When the coal is reached, as is expected in mid-2018, it will feed a pit-mouth power station constructed by Engro, and, in time, three others owned by partners in the SECMC. These stations will furnish around a fifth of the country’s electricity for the next 50 years. The financial rewards could be vast. “All my richest friends are jumping up and down [because they did not get there first]”, says the boss of one big multinational construction business.
Hurdles remain, not least complaints from nearby villagers about the disposal of the vast quantities of wastewater from the mine on their ancestral grazing lands in the form of a reservoir. In reply, Engro stresses its social work in the surrounding district of Tharparkar, the poorest in Sindh, which includes the construction of several free schools. More self-interestedly, it is training locals to drive so they can man the dump trucks that trundle day and night around the mine. According to Shamsuddin Shaikh, chief executive of Engro Powergen, the conglomerate’s energy division, Engro also has its sights on Reko Diq, a gargantuan and long-stalled copper mine in Balochistan, the least developed of Pakistan’s provinces. To tap one of the country’s two largest and most niggardly mines is hard enough. Imagine cracking them both.
State-run companies from resource-hungry China have long coveted Reko Diq and more recently Saudi Arabia has shown interest, according to Pakistani officials.
Some Western diplomats say the Reko Diq dispute has been a significant foreign investment deterrent, with international businesses unnerved at how Pakistan dealt with the companies that had pledged to invest $3.3 billion to develop the country’s then-biggest mining project.
Barrick Gold and Antofagasta, whose joint venture Tethyan Copper Company (TCC) discovered vast mineral wealth in Reko Diq, say they had invested more than $220 million by the time the Baluchistan government, in 2011, unexpectedly refused to grant them the critical mining lease needed to keep operating.
Pakistan argued its move was legitimate because TCC’s feasibility study was incomplete and the country’s Supreme Court voided the deal in 2013. But in 2017 the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Pakistan.
TCC did not respond to requests for comment and Antofagasta and Barrick Gold both declined to comment. Reuters could not determine whether either company would be willing to return to the project.
FOREIGN INVESTORS
The last serious attempt at settling the Reko Diq case was scuppered in 2016 by the military, which vetoed paying hundreds of millions of dollars to TCC, according to a senior Baluchistan official and two former senior officials in Islamabad.
But the military has since changed its stance and is more open to a settlement with TCC, according to a lawmaker close to the military and a source close to Prime Minister Khan. The military was also involved in appointing Pakistan’s current legal team.
In response to a Reuters question about blocking the previous settlement effort, the military said: “Let’s see how the case progresses.” It did not elaborate or comment on whether it was playing any role in the latest negotiations.
Some mining experts say a likely solution would be for a new investment consortium to pay the settlement fee on behalf of cash-strapped Pakistan in exchange for future royalty fees or mining rights.
China grounds Boeing 737 MAX jets after crash
Information Minister Chaudhry said Pakistan was engaged in negotiations with “both” the current investors about a settlement and also potential new investors, with interest coming from the Middle East and Europe. He declined to name the potential investors.
Pakistani Finance Minister Asad Umar said in October that Saudi Arabia has inquired about investing in Reko Diq and another government official confirmed talks were ongoing.
Saudi Arabia did not respond to a Reuters request for comment on Reko Diq. During Crown Prince bin Salman’s visit to Pakistan last month, the kingdom pledged to invest $2 billion in mineral development projects, though the provisional agreements were vague and did not mention any specific projects.
China’s state-owned miner China Metallurgical Group Corporation (MCC), which operates the Saindak copper and gold mine close to Reko Diq, has been eyeing the bigger deposit for more than a decade, according to mining and MCC officials.
A few years ago Chinese state giant Norinco also made an approach, according to two sources familiar with Norinco’s offer.
MCC and Norinco did not respond to requests for comment.
When a mining company approached former general Abdul Quadir Baloch about Reko Diq around 2016, when he was federal minister for the frontier regions, he took their proposal not only to then-premier Nawaz Sharif, but also to the army chief.
“The military has to give a (security) guarantee to any company coming in to explore or exploit this project, so they are a stakeholder,” said Baloch.
http://theconversation.com/world-bank-ruling-against-pakistan-shows-global-economic-governance-is-broken-120414
The International Centre for the Settlement of Investment Disputes was established in 1966 as part of the World Bank Group. The centre oversees arbitrations between foreign companies and states in a process known as the investor-state dispute settlement (ISDS).
ISDS is hugely controversial for a variety of reasons ranging from the secrecy of the hearings to the substantial costs associated with defending a claim and the ability of corporations to challenge health and environmental measures.
The case that cost Pakistan $5.8 billion did not revolve around such measures but rather the decision of a provincial government to backtrack on a sweetheart deal that had been offered to a mining firm, allegedly the result of corruption. Leaving the merits of the case to one side — it is difficult to assess the tribunal’s reasoning when the award isn’t public, after all — let’s take a closer look at the payout.
According to the mining company — Tethyan Copper, partially owned by Canada’s Barrick Gold — it spent US$220 million on exploration activities before things went south. One might argue that a fair outcome, if the government was solely to blame, would be for the award to cover these sunk costs. Instead it was more than 25 times that amount. That is because the tribunal chose to award the company “lost future profits” from the project.
Arbitrators don’t have crystal balls. They don’t know what the value of a mineral will be in a year, let alone 30 years. And they are lawyers, not market analysts. So how do they decide how much profit a firm would have made in a hypothetical alternative future?
The answer is, partially, that they rely on “experts” brought in by each of the parties to the dispute. These experts provide a best guess for what they think a project is worth. International law scholar Robert Howse calls this “junk science.”
Unsurprisingly, the state’s expert often provides a low-ball estimate for the value of a project and the investor’s expert gives an inflated value. Faced with this discrepancy, arbitrators will often choose to go down the middle and pick an arbitrary value. Tethyan Copper had originally sought more than US$11 billion in damages, suggesting that the tribunal in this case may have taken this approach.
Highlights
Until Pakistan and the Tethyan Copper Co. settle their dispute, development of the country's Reko Diq gold and copper mine will languish, leaving a potentially abundant revenue stream dry.
Growing foreign investment in the sector will heighten the need for an effective dispute resolution mechanism.
Unless Pakistan implements the necessary reforms to attract foreign investment, the country's mining sector will not grow beyond its current 3 percent contribution to Pakistan's gross domestic product.
In a remote and arid corner of southwestern Pakistan, Islamabad has found itself embroiled in a difficult battle: a multibillion-dollar dispute with a global mining company over one of the world's richest untapped deposits of copper and gold. In July, the World Bank's International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to pay $5.9 billion in damages to the Tethyan Copper Co., a joint venture between Canada's Barrick Gold Corp. and Chile's Antofagasta PLC. The ruling stems from a 2012 case that Tethyan lodged at the ICSID against Islamabad for failing to issue a license to mine gold and copper at the Reko Diq site.
The case draws attention to the rich resources of Balochistan, Pakistan's rugged southwestern frontier in which Reko Diq is located, as well as the tug of war between domestic Pakistani law and international arbitration in resolving investor disputes. But above all, the Reko Diq affair shines a light on Pakistan's numerous underground resources and its broader failure to exploit them — something that will continue to haunt the country if it is to fulfill Prime Minister Imran Khan's goal of rapidly ramping up foreign investment.
The Big Picture
Pakistan's Balochistan province plays a vital role in the China-Pakistan Economic Corridor because of its location on the Arabian Sea. It's also known for its resource riches that include an abundance of gold and copper deposits. But a longstanding dispute between the government and a mining company point to the need for reforms, without which mining's contribution to Pakistan's economy won't exceed 3 percent.
.....Its strategically located coastline faces vital shipping lanes in the Arabian Sea, including traffic destined for the Strait of Hormuz. As a result, Balochistan is the site of a variety of projects as part of the multibillion-dollar China-Pakistan Economic Corridor, which aims to create a direct overland route linking western China and the Arabian Sea through Balochistan's port of Gwadar. At the same time, however, Balochistan is also home to an insurgent movement that seeks independence from Pakistan on cultural and economic grounds; indeed, Chinese investment in Balochistan has exacerbated long-standing separatist grievances of foreign exploitation in the province.
The mine itself is located in Chagai, Pakistan's largest and westernmost district. According to Tethyan, Reko Diq contains 2.2 billion metric tons of mineable ore that could yield 200,000 metric tons of copper and 250,000 troy ounces of gold annually for over half a century. To extract the precious metals, the company must shovel, crush and grind the ore into a fine powder before converting it into a slurry concentrate for transport through a 682-kilometer underground pipeline to Gwadar. At the port, the company plans to dry the concentrate before loading it onto ships for smelting abroad.
But for all of its lucrative potential — $353 million annually at current gold and copper rates — the development of Reko Diq has stagnated because of the long-running legal battle that culminated in last month's $5.9 billion fine.
https://www.bloomberg.com/news/articles/2019-10-25/pakistan-s-tycoons-seek-to-take-over-disputed-barrick-mine
Reko Diq is one of the largest underdeveloped copper and gold deposits in the world, capable of producing each year 200,000 tons of copper and 250,000 ounces of gold.
Pakistan’s top business tycoons have offered to take over a disputed copper and gold deposit that was once explored by Barrick Gold Corp. and Antofagasta Plc, according to people familiar with the matter.
Officials at the provincial Balochistan government are said to have met with a consortium of four business groups including tycoons Arif Habib and Muhammad Ali Tabba who are willing to invest about $1 billion of their own cash in the project, the people said, asking not to be named because the discussions are private. The consortium is willing to go through a bidding process to take over the project, the people said. Pakistan’s provincial government spokesman didn’t respond to requests for comment.
An international tribunal run by the World Bank in July ordered Pakistan to pay $5.8 billion in damages to Barrick Gold and Antofagasta after the country denied them a license to develop the Reko Diq mine in 2011. Collecting the funds though may be a challenge, given Pakistan’s fragile economic state. The damages almost match the International Monetary Fund’s $6 billion bailout for Pakistan earlier this year to help the South Asian nation avert an economic crisis.
The provincial chief minister has expressed a preference for Pakistani companies to take over the mine, the Dawn newspaper reported earlier this month. The business groups that showed interest in the mining project are: Yunus Brothers Group that owns Lucky Cement Ltd., Arif Habib Group, Fatima Group and the owners of Liberty Power Tech Ltd., the people said. The four are being led by Shamsuddin Shaikh, who spearheaded a group of companies to mine coal from Pakistan’s Thar desert for the first time.
Reko Diq is one of the largest undeveloped copper and gold deposits in the world, capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century, according to a feasibility study before the dispute. The capital investment at the time would have exceeded $3 billion.
The Sterlite copper plant was ordered shut by the Tamil Nadu government on 28 May 2018 after protests demanding its closure turned violent.
In the violence that occurred on 22 May 2018, at least 13 persons were killed when police fired at protesters who turned violent and began damaging vehicles and properties.
The protests demanding the closure of Sterlite began in February 2018 after Vedanta launched works for further expansion of the Thoothukudi plant.
The Sterlite Copper plant contributed 40 per cent of the country’s total copper production when it was forced to shut down.
The Union government told Parliament earlier this year that the plant’s closure had led to a domino effect with imports rising and exports slipping.
In view of the Thoothukudi plant’s closure, India became a net importer of copper after 18 years. Imports more than doubled to 92,990 tonnes during the 2018-19 financial year, while exports dropped to a meagre 47,917 tonnes from 3.78 lakh tonnes.
A total of $605.20 million of precious foreign exchange was spent on imports during the 2018-19 financial year, while $684.02 million was spent during the April-September period of 2019-20 financial year.
According to Trading Economics, Pakistani exports of copper and articles increased over 66 per cent to $353.87 million in 2019 from around $210 million the previous year.
The News said that Pakistan increased its exports to China through one of its largest copper reserves, the ‘Reko Diq project’.
Reko Diq is a small desert area town in Balochistan province bordering Afghanistan and Iran. The “Reko Diq project” is under dispute since Anglo-Australian mining firm BHP discovered large deposits of gold and copper ores.
BHP sold its stakes to Tethyan Copper Company (TCC) but the Balochistan government failed to acknowledge it.
TCC went to the World Bank’s International Centre for Settlement of Investment Disputes and got $5.95 billion order in its favour.
However, the dispute is yet to be resolved.
China’s biggest copper industry player, Metallurgical Corporation of China, is looking forward to increasing Pakistan copper exports to $10 billion a year if the “Reko Diq project” dispute is resolved.
The Metallurgical Corporation is executing the Saindak gold-copper project in Balochistan since 1995.
The Saindak project produces 4.5 million tonnes of copper ores a year that helps smelt 13,000 tonnes of copper blister annually.
Since the resources are fast depleting at Saindak, the Chinese company is keen on taking over the operations at the ‘Reko Diq project’.
Beijing has asked Pakistan to call for international tenders for this and another project called H4, even as Islamabad sounds confident of increasing its copper exports to China.
A local consortium has made a proposal to develop a major copper and gold mine in southwest Pakistan after a court decision blocked the mine’s development by a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold.
Pakistan’s Supreme Court blocked the joint venture, Tethyan Copper, in 2013 from developing Reko Diq - one of the world’s biggest untapped deposits of copper and gold - following a court case over how the contract had been awarded.
Pakistan’s government was later ordered by a global arbitration body to pay $5.8 billion in damages after Tethyan Copper took it to court.
The local consortium, National Resources Private Limited, said in a statement on Sunday that it had submitted a proposal to develop Reko Diq and another major copper and gold mine, also in Balochistan province.
“The consortium has proposed (to the) government to develop and implement the Tanjeel reserves as a starter project, followed by development of the vast Reko Diq area reserves,” National Resources Private Limited said.
The Balochistan government said it was studying the proposal, the financial aspects of which were not disclosed.
https://e-sga.org/shop/product-details/?categories_id%5B0%5D=31&categories_id%5B1%5D=45&products_id=2233&tx_multishop_pi1%5Bpage_section%5D=products_detail
Reko Diq, located in in the Chagai belt of western Pakistan near the border with Afghanistan and Iran, is one of the world´s largest porphyry Cu-Au districts. The western Chagai belt hosts several porphyry Cu and Cu-Au deposits and prospects, including the clusters at Saindak, Sor Baroot, Koh-Dalil and Reko Diq. Porphyry Cu-Au ± Mo mineralization at Reko Diq is associated with multi-stage intrusions of Miocene calcalkaline, commonly cigar-shape stock and dykes, emplaced into late Oligocene volcanic and sedimentary rocks. The H14-H15 deposit (4,100 Mt at 0.50% Cu and 0.29 g/t Au) is the largest deposit in the district and is characterized by Au-rich, Cu-Fe-sulfide mineralization associated with intense, magnetite-bearing K-silicate alteration. Supergene Cu oxidation and enrichment is weak in the district and is only well preserved in the form of a chalcocite blanket (0.70% Cu) in the central Tanjeel porphyry Cu deposit.
Ryssdal: All right, so make the turn here toward geopolitics for me, and I realize that’s not necessarily your specialty. But if the United States and the U.K. and most of Europe is not in the foreseeable future going to have business dealings with Afghanistan, as it’s run by the Taliban, but the Chinese are and the Russians might, that’s a balance of power thing.
Pitron: The Chinese and the Pakistanis and the Russians are very much interested. And China has been dominating the critical, rare strategic metals market for the last decades. So the fact that this potential is available, at least potentially to the Chinese, shows that after the 19th century, which was dominated by the English with the coal industry, and the 20th century, which was dominated by the Americans, thanks to their domination of the oil industry, then we’re moving to an age of where the Chinese are already controlling the metals industry for the [inaudible] energy revolution.
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The United States has pulled out of Afghanistan. But 11 years ago, Pentagon officials and American geologists discovered nearly $1 trillion in mineral deposits there, including elements and metals that are needed to power the growing tech economy. Lithium, for instance, is key material in making batteries for cellphones, laptops and electric vehicles. Getting those minerals out of the ground and building an industry around them is another issue in a country with deep political and economic instability.
“Marketplace” host Kai Ryssdal spoke with Guillaume Pitron, a French journalist and author of “The Rare Metals War: The Dark Side of Clean Energy and Digital Technologies,” about the geopolitics of rare materials. The following is an edited transcript of their conversation.
Guillaume Pitron: [Afghanistan] is said to be a country where you can find lots of copper, lots of lithium, rare earths elements, platinum, bauxite and other resources of this kind.
Kai Ryssdal: And the net worth, as it were, of those things even in the ground, before we get to actually getting them out of the ground in Afghanistan, the thing that makes it dynamic right now, is that we more than ever depend on those minerals — the lithium and the cobalt and all of that — for batteries and all of the things we need for this economy right now.
Pitron: The energy transition is a metallic transition. we would like to do away with oil and coal. But on the other side, we’ll have to tap into these minerals. And actually, the International Energy Agency, recently this year, published a report saying that our needs for these commodities will explode in the next decades for making the green revolution possible. And Afghanistan has these resources.
https://venturebeat.com/2014/03/20/lithium-afghanistan/
United States Geological Survey teams discovered one of the world’s largest untapped reserves of lithium there six years ago (in 2008). The USGS was scouting the volatile country at the behest of the U.S. Department of Defense’s Task Force for Business and Stability Operations. Lithium is a soft metal used to make the lithium-ion and lithium-polymer batteries essential for powering desktop computers, laptops, smartphones, and tablets. And increasingly, electric cars like Tesla’s.
The vast discovery could very well propel Afghanistan — a war-ravaged land with a population of 31 million largely uneducated Pashtuns and Tajiks, and whose primary exports today are opium, hashish, and marijuana — into becoming the world’s next “Saudi Arabia of lithium,” according to an internal Pentagon memo cited by the New York Times.
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Depending on who you talk to, the current lithium global reserves are adequate for at least another generation of lithium-ion battery manufacturers to produce them.
But not everybody thinks so, and some say the light metal compound may someday run dry. That could in turn spell trouble for any company whose business depends on light and portable mobile electronics — unless someone comes up with an alternative to lithium batteries before then.
The experts VentureBeat interviewed pointed to sharp year-on-year increases in the demand for lithium. That’s putting heavy pressure on existing stockpiles.
According to Lithium Americas, a Canadian lithium-mining company with significant business interests in Argentina, lithium demand will more than double in the next 10 years, while lithium prices have nearly quadrupled during the same timeframe.
Tesla, for its part, is in the process of investing up to $5 billion to build its own lithium-ion Gigafactory in Texas, a plant capable of churning out 500,000 expensive battery packs a year by 2020 for its line of zero-emission, all-electric cars.
A Tesla spokeswoman did not return calls seeking comment.
As a potential source to feed that demand, enter Afghanistan.
“At some point, if present trends continue, demand [for lithium] will outstrip the supply. And again, at some point, the market for lithium-ion could get so big that it actually affects the supply chain,” said Donald R. Sadoway, a professor of the Materials Chemistry Department of Materials Science and Engineering at MIT.
Looking at Afghanistan, Sadoway says the war-ravaged nation, which has no effective mining infrastructure in place, may well be attractive to the world’s mining outfits.
“In this regard,” Sadoway, one of the world’s foremost experts on energy sources, says, “the deposits in Afghanistan could be important.”
Andrew Chung, a venture capitalist with Khosla Ventures in Silicon Valley who has invested in multiple startups producing alternative batteries, says lithium-ion batteries are limited in their lifetime cycles, scalability, and cost. Despite this, Chung says, he can understand how the untapped reserves of Afghan lithium are now an increasing focus.
“It is an issue of the supply chain, whether it’s Afghanistan or other [countries]. There is a finite supply, and lithium-ion will continue to be the [power] choice for the next decade,” Chung said.
Some of the Valley’s biggest and most powerful tech companies either declined to comment for this story or never returned calls. But they didn’t deny the importance of lithium-ion batteries.
https://www.dawn.com/news/1566257/chinese-company-allowed-exploration-in-saindak-area
The Balochistan government has allowed Chinese firm Metrological Construction Company of China (MCC) — registered locally with the name of Saindak Metals Limited (SML) — the exploration and development of East Ore Body in Saindak lease area and the company has been issued an NoC for the purpose.
Official sources said on Monday that the provincial government also extended the contract of MCC/SML for another 15 years under which the company would continue exploration work on East Ore Body site after the expiry of its present contract on Oct 31, 2022. The MCC, working at the Saindak-Gold-cum-Copper Project since 2002, applied the Balochistan Mines and Mineral Department to allow the company to start exploration work on the East Ore Body of Saindak lease area as its exploration work at the present Saindak site had almost finished.
Officials said the contract agreement of the SML/MCC was scheduled to expire on Oct 31, 2022, and the Balochistan chief minister approved it for another 15 years. “The extension of MCC-SML contract would ensure investment of $45 million by MCC/SML at their own risk for exploration and development of East Ore Body in Saindak area,” said an official letter sent to the Ministry of Energy, Petroleum Division.
However, the letter said that the matter of extension of the SML mining lease (valid up to 2025) would be dealt with separately as per provisions of the Balochistan Minerals Rules, 2002.
https://finance.yahoo.com/news/copper-prices-drop-6-2022-092200072.html
In 2020, approx. 1.7M tonnes of copper were exported worldwide, growing by 16% compared with 2019 figures. In value terms, supplies surged to $11.1B.
Zambia represented the major exporter of copper globally, with the volume of exports amounting to 675K tonnes, which was nearly 40% of total supplies. Chile (283K tonnes) ranks second with a 17% share, followed by Bulgaria (7.1%) and the Democratic Republic of the Congo (5%). Belgium (76K tonnes), Namibia (61K tonnes), Spain (56K tonnes), Slovakia (55K tonnes), South Africa (52K tonnes), Pakistan (38K tonnes), the Philippines (34K tonnes) and South Korea (31K tonnes) were a long way behind the leaders.
In value terms, Zambia ($4.2B) remains the largest copper supplier, comprising 38% of global exports. The second position in the ranking was occupied by Chile ($1.7B), with a 16% share of total supplies. It was followed by Bulgaria, with a 9.4% share.
@Sabbandkardo
One more record for CY 2021 was Pakistan copper exports which touched 717m$ in CY 2021.
Pakistan Copper exports increased more than 3 times since 2018 from 233m$ to 717m$ .
https://twitter.com/Sabbandkardo/status/1490256306611298305?s=20&t=xtlSwyMEBsk0HxwKAFJxcQ
https://www.fool.com/earnings/call-transcripts/2022/02/16/barrick-gold-corporation-gold-q4-2021-earnings-cal/
Tanya Jakusconek -- Scotiabank -- Analyst
OK. And just my last question, if I could, just on your copper strategy. Just wanted to understand a little bit how Reko Diq fits into that strategy and just where we are on this asset?
Mark Bristow -- Chief Executive Officer
So right now, the asset that we have is the arbitration award of which we share with Antofagasta and ourselves, Barrick. We are working and have been in its general knowledge in the spirit of Barrick philosophy of how we can convert that into something that's more meaningful. And that's something that doesn't end up with the Pakistan government having to write out a big check without any benefits. And Reko Diq is an opportunity that we've been working on whereby everyone will benefit.
Our shareholders, of course, and same with the Balochistan government and the Pakistan government. And that's really where I would want to stop it because there's still a lot of work and water to flow under the bridge, but that's the tactic. And as I said, and I think I told Greg at this conference that it's a real asset. And we would like as miners to convert that into our mining asset.
It's one of the better ones around. Otherwise, we end up in conflict and that's not a good thing to do with your host country or potential host country.
Tanya Jakusconek -- Scotiabank -- Analyst
OK. So is it fair to say that this is a ways out in terms of fitting into your 10-year pipeline?
Mark Bristow -- Chief Executive Officer
It would be fantastic in our 10-year pipeline. It's a real deal.
Graham Shuttleworth -- Senior Executive Vice-President, Chief Financial Officer
But it's not in our 10-year pipeline.
Mark Bristow -- Chief Executive Officer
But it's not in -- yes, sorry, it's not in our 10-year pipeline right now.
Tanya Jakusconek -- Scotiabank -- Analyst
I understand that. But in terms of resolving everything and then probably having a feasibility study and other stuff in country, would you be able to even fit it into your 10-year pipeline?
Mark Bristow -- Chief Executive Officer
Sure. Absolutely.
Tanya Jakusconek -- Scotiabank -- Analyst
OK. Great. Thank you.
Mark Bristow -- Chief Executive Officer
Thanks, Tanya.
Operator
Our next question is from Mike Parkin with National Bank Financial. Please go ahead.
Mike Parkin -- National Bank Financial -- Analyst
Hey, guys. Congrats on the good quarter. Just a question with respect to the performance dividend. Does that indicate kind of a comfort level with carrying debt on the balance sheet? Or are you agnostic to where the debt is given that performance dividend is linked to the net cash position?
Mark Bristow -- Chief Executive Officer
So I think you've just answered your own question, Mark. Net cash means there's no net debt. And so the way it's designed is that if we have -- because what we've done initially is our debt to pay it all up is expensive. Hopefully, it gets cheaper and cheaper with the growing interest rates.
But we've offset it. We've got cash balancing the debt. And what we've said is anything above 0. So from zero to $500 million net cash payout of $0.05 dividend and then $500 million to $1 billion and $1 billion to $1.5 billion.
And so that's -- and what it does is it's -- it really is -- it's a nonnegotiable process because if we're investing heavily in a big project, for example, and we drive -- we increased the net debt to fund that. Then we are investing our shareholders' money into that project. And given our return criteria, we think most -- in fact, more than most of our shareholders would support that. If we don't and we build cash on the balance sheet, we make sure that we don't create an easy balance sheet and that on a formulaic basis money goes back to shareholders.
https://www.dawn.com/news/1668769
CHAGAI: Balochistan Chief Minister Mir Abdul Qudoos Bizenjo said on Monday that details with facts and figures about Reko Diq copper and gold mining project would be disclosed soon.
Talking to local journalists outside Dalbandin airport along with Balochistan Governor Zahoor Ahmed Agha and Rakhshan Division Commissioner Saifullah Khetran, Mr Bizenjo said that for the first time a detailed briefing about Reko Diq project was conducted for the elected representatives of Balochistan at the provincial assembly.
He was referring to a Balochistan Assembly session held last month in which lawmakers from the opposition and treasury benches were given an in-camera briefing on the Reko Diq copper and gold mining project.
In 2019, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to pay damages of $5.84 billion to Tethyan Copper — a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold — for blocking Tethyan from developing the asset after it had already sunk more than $220 million into the project.
“As we know that we have lost the Reko Diq case in the international court. Therefore, striking a bargain is not easy, but we are trying our best to gain maximum share for Balochistan in this regard,” the chief minister said.
The share of Balochistan in the previous agreement was 25 per cent despite investment by the provincial government, Mr Bizenjo said, adding that the province would get a good share in the upcoming proposed agreement and without having to make an investment.
The chief minister said it had been proposed that the companies involved in Reko Diq project would spend Rs30 to 40 billion during three years for the development of Chagai district besides billions of rupees that would come under the head of corporate social responsibility.
Answering a question, Mr Bizenjo said his government had removed several unnecessary check-posts on highways and more would be removed soon. He also asked the commissioner to remove speed breakers and rooms made for security check-posts constructed on and alongside the main highway.
He also warned that the commissioner, deputy inspector general of police, deputy commissioner, assistant commissioner and tehsildar would be suspended if a security man is found taking bribes at a check-post.
On a lack of healthcare facilities in the district headquarters hospital, he said that all district health officials were directed to purchase medicines and appoint doctors on a contract basis to facilitate the masses.
https://www.globalvillagespace.com/breakthrough-pakistan-to-get-50-share-in-reko-diq/
Sources claim that Pakistan and TCC will most likely sign the deal in February. If finalized, the deal will avert the threat of imposition of a $10 billion dollar fine on Pakistan.
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Sources revealed to The Express Tribune that the project’s development would result in an investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs.
“This project shall make Balochistan the largest recipient of foreign direct investment in Pakistan and the Reko Diq project shall be one of the largest copper and gold mining projects in the world”, sources added.
50 per cent of the new project’s shares will be owned by Barrick Gold, while the remaining shares shall be owned by Pakistan, divided equally between the federal government and the provincial government of Balochistan.
The federal government’s shares of 25% shall be divided equally amongst three state-owned entities (SOE), namely Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL).
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The reconstituted project will be held 50% by Barrick and 50% by Pakistan stakeholders, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties.
https://www.barrick.com/English/news/news-details/2022/barrick-pakistan-and-balochistan-agree-in-principle-to-restart-reko-diq-project/default.aspx
Barrick will be the operator of the project which will be granted a mining lease, exploration licence, surface rights and a mineral agreement stabilizing the fiscal regime applicable to the project for a specified period. The process to finalize and approve definitive agreements, including the stabilization of the fiscal regime pursuant to the mineral agreement, will be fully transparent and involve the federal and provincial governments, as well as the Supreme Court of Pakistan. If the definitive agreements are executed and the conditions to closing are satisfied, the project will be reconstituted including the resolution of the damages originally awarded by the International Centre for the Settlement of Investment Disputes and disputed in the International Chamber of Commerce.
https://www.wsj.com/articles/pakistan-reaches-deal-with-mining-companies-11647793113
Two mining companies resolved a decadelong dispute with Pakistan, officials said, in a deal that will restart work on a giant copper mine and spare the country from having to pay billions in compensation.
Canada’s Barrick Gold Corp. and Chile’s Antofagasta PLC had stopped preliminary work in 2011 when Pakistani authorities refused to grant them a mining license to develop the Reko Diq mine, located in the poor and sparsely populated western province of Balochistan.
Under the agreement, Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government. Barrick and Pakistan will split ownership of the mine evenly.
The new deal will represent the largest single investment in the country, Pakistani officials said Sunday, with Barrick and Pakistan investing around $10 billion.
China has invested more than $20 billion in recent years, but that is spread over multiple projects and is the result of a deal between governments of the two countries, rather than an investment from the private sector.
The Reko Diq investment will include about $1 billion in spending on roads, schools and hospitals in the province, as well as creating a technical training institute for mining, Pakistan said. The project is expected to create about 8,000 jobs.
“We always have to keep going back to the IMF because we run short of dollars. Now we’ve taken a big step toward being able to stand on our own two feet,” said Pakistan’s prime minister, Imran Khan, referring to the country’s recurring debt troubles and the International Monetary Fund.
The two companies originally took the case to international arbitration after Pakistani authorities took away their mining licenses in 2011, saying they had rejected a feasibility study by the companies.
The arbitration panel, working under the World Bank, in 2019 ruled against Pakistan, awarding $6 billion in compensation for future earnings of the mine, which was equivalent at the time to around 2% of the country’s gross domestic product, and enough to wipe out much of Pakistan’s foreign-exchange reserves.
The finance minister, Shaukat Tarin, said Sunday that if Pakistan hadn’t reached a settlement, it would have had to pay $11 billion in compensation to the companies, including interest on the unpaid 2019 award, and a further arbitration panel finding that would have gone against Pakistan. If unable to pay, the country’s overseas assets would have also been frozen, he said.
Barrick said Reko Diq could now be in production within five to six years. It said the deal would be the springboard for exploring the surrounding area for more reserves.
Antofagasta said that it decided not to participate in the reconstituted project as the company’s growth strategy is focused on the production of copper and byproducts in the Americas.
https://www.barrick.com/English/news/news-details/2022/reko-diq-alliance-between-pakistan-and-barrick-set-to-create-long-term-value/default.aspx
Subject to the updated feasibility study, Reko Diq is envisaged as a conventional open pit and milling operation, producing a high-quality copper-gold concentrate. It will be constructed in two phases, starting with a plant that will be able to process approximately 40 million tonnes of ore per annum which could be doubled in five years. With its unique combination of large scale, low strip and good grade, Reko Diq will be a multi-generational mine with a life of at least 40 years. During peak construction the project is expected to employ 7,500 people and once in production it will create 4,000 long-term jobs. Barrick’s policy of prioritizing local employment and suppliers will have a positive impact on the downstream economy.
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ISLAMABAD, PAKISTAN – Finance Minister Miftah Ismail and Barrick president and chief executive Mark Bristow said after their meeting here today that they shared a clear vision of the national strategic importance of the Reko Diq copper-gold project and were committed to developing it as a world-class mine that would create value for the country and its people through multiple generations.
Reko Diq is one of the world’s largest undeveloped copper-gold deposits. An agreement in principle reached between the government of Pakistan, the provincial government of Balochistan and Barrick earlier this year provides for the reconstitution and restart of the project, which has been on hold since 2011. It will be operated by Barrick and owned 50% by Barrick, 25% by the Balochistan Provincial Government and 25% by Pakistani state-owned enterprises.
The definitive agreements underlying the framework agreement are currently being finalized by teams from Barrick and Pakistan. Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow that with first production of copper and gold expected in 2027/2028.
“During the negotiations the federal government and Barrick confirmed that Balochistan and its people should receive their fair share of the benefits as part of the Pakistan ownership group,” Bristow said.
“At Barrick we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities. At Reko Diq, Balochistan’s shareholding will be fully funded by the project and the Federal Government, allowing the province to reap the dividends, royalties and other benefits of its 25% ownership without having to contribute financially to the project’s construction or operation. It’s equally important that Balochistan and its people should see these benefits from day one. Even before construction starts, when the legalization process has been completed we will implement a range of social development programs, supported by an upfront commitment to the improvement of healthcare, education, food security and the provision of potable water in a region where the groundwater has a high saline content.”
Finance Minister Ismail said the development of Reko Diq represented the largest direct foreign investment in Balochistan and one of the largest in Pakistan.
“Like Barrick, we believe that the future of mining lies in mutually beneficial partnerships between host countries and world-class mining companies. The Reko Diq agreement exemplifies this philosophy and also signals to the international community that Pakistan is open for business,” he said.
Pakistan should hire experts, finance rare earth metal projects through budget
https://tribune.com.pk/story/2207557/rems-precious-commodities
REMs constitute a group of 17 elements that occur together in the periodic table, including yttrium and 15 lanthanides. The use of REMs within industrial sectors is both high stakes and high wager.
These sectors include defence, electronics, medicinal, industrial, automotive, etc and they are used in specialised applications such as aircraft engines, nuclear batteries, lasers, magnets, optic fibres, high-strength alloys, superconductors, storage disks, signal amplifiers, to name a few.
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REMs deposits in Pakistan have been discovered in Khyber-Pakhtunkhwa (Koga, Tarbela, Jawar), Gilgit-Baltistan (Gilgit, Skardu), and Balochistan (Reko Diq, Chagai, Saindak).
Initial geochemical analysis showed that 12 out of 17 REMs had been found with varying potential. Still, the exact size is yet to be determined and required an in-depth exploration study. REMs are the most precious commodities today and Pakistan needs to place maximum bets on it to cash in on the opportunities. Realistically, Pakistan is not a manufacturing or a processing country, hence, it should earmark the commerce potential with both revenue from sales and barter trade.
Due to REMs strategic importance, an organisational setup should be put in place, under the prime minister, and in close collaboration with supporting arms of armed forces and Pakistan Atomic Energy Commission.
The entire exercise can be done in stages with exploration, extraction, ramp-up production and global marketing with mass production over a five-year timeline.
Experts should be freshly hired or may be brought from different government departments (Geological Survey of Pakistan, Survey of Pakistan, Khan Laboratories, etc), including geologists, radiometric surveyors, drilling/smelting specialists, and security experts.
The project financing should come from the national budget under the ambit of “special strategic projects”. The global REMs market is valued at $10 billion with an 8-10% CAGR and production of 170,000 tons per annum by 2022. If Pakistan secures 2-5% of this market share – with annual output of 3,500-8,500 tons, it can inject $1-2 billion per year into the national pocket over the next five to seven years.
This could change Pakistan’s international status as a high-value player at a high stakes table in the global arena.
The writer is a PhD in Engineering from the University of Cambridge, United Kingdom. He currently serves as Vice President of Core Group in Pakistan
https://www.reuters.com/markets/asia/pakistans-court-endorses-settlement-with-barrick-gold-over-mining-project-2022-12-09/
Pakistan's Supreme Court endorsed on Friday a settlement for Barrick Gold (ABX.TO) to resume mining at the Reko Diq project, one of the world's largest underdeveloped sites of copper and gold deposits, it said in an order.
The endorsement was a condition of the settlement for Barrick to resume work on the project in the southwestern province of Balochistan, bordering Afghanistan and Iran, in which it will invest $10 billion.
Chief Justice Umar Ata Bandial, the head of a five-judge panel, read out the operative part of the brief order in court.
"The agreements ... have not been found by us to be unconstitutional or illegal on the parameters and grounds spelt out," read the order seen by Reuters.
President Arif Alvi had asked the court to review the deal.
In an out of court agreement this year, Barrick Gold ended a long-running dispute with Pakistan, and agreed to restart development.
Under the deal, the company withdrew its case in an international arbitration court, which had slapped a penalty of $11 billion on Pakistan for suspending the contracts of the company and its partners in 2011.
The company's licence to mine the untapped deposits was cancelled after the Supreme Court ruled illegal the award granted to it and its partner, Chile's Antofagasta (ANTO.L).
Antofagasta had agreed to exit the project, saying its growth strategy was focused on production of copper and by-products in the Americas.
Pakistan's mineral-rich province of Balochistan is home to both Islamist militants and separatist Baloch insurgents, who have engaged in insurgency against the government for decades, demanding a greater share of the region's resources.
https://www.barrick.com/English/operations/reko-diq/default.aspx
A world class copper-gold mine in the making
One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50% by Barrick, 25% by three federal state-owned enterprises, 15% by the Province of Balochistan on a fully funded basis and 10% by the Province of Balochistan on a free carried basis.
The reconstitution of the Reko Diq project was completed in December 2022 — a key step in progressing the development of Reko Diq into a world-class, long-life mine which would substantially expand Barrick’s strategically significant copper portfolio and benefit its Pakistani stakeholders for generations to come.
Barrick is now updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for first production.
Project scope
Reko Diq is expected to have a life of at least 40 years as a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate. Construction is expected in two phases with a combined process capacity of 80 million tonnes per annum.
Significant and lasting economic and social benefits to Balochistan and Pakistan
Reko Diq will be a major contributor to Pakistan’s economy which 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. The province’s interest in the mine will be fully funded, which means that Balochistan will reap the dividends, royalties and other benefits of its 25% shareholding without having to contribute financially to its construction and operation.
Employment
During peak construction the project is expected to employ 7,500 people, and once in production, it will create around 4,000 long-term jobs. Barrick prioritizes the employment of local people and host country nationals at our operations worldwide.
Published by Joe Toft, Editorial Assistant
Global Mining Review
https://www.globalminingreview.com/mining/30122022/barrick-gold-strikes-final-deal-with-pakistan-for-reko-diq-project/
Barrick Gold Corporationhas announced that it has completed the reconstitution of the Reko Diq project, having received a favourable opinion from the Supreme Court of Pakistan and the required legislation having been passed into law.
One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50% by Barrick, 25% by three federal state-owned enterprises, 15% by the Province of Balochistan on a fully funded basis and 10% by the Province of Balochistan on a free carried basis.
Barrick president and chief executive Mark Bristow said the completion of the legal processes was a key step in progressing the development of Reko Diq into a world-class, long-life mine which would substantially expand the company’s strategically significant copper portfolio and benefit its Pakistani stakeholders for generations to come.
“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for first production,” Bristow said.
“With its unique combination of large scale, low strip and good grade, Reko Diq is expected to have a life of at least 40 years. We envisage a truck-and-shovel open cast operation with processing facilities producing a high-quality copper-gold concentrate. We expect it to be constructed in two phases with a combined process capacity of 80 million tpy.
Reko Diq will be a major contributor to Pakistan’s economy which 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. The province’s interest in the mine will be fully funded, which means that Balochistan will reap the dividends, royalties and other benefits of its 25% shareholding without having to contribute financially to its construction and operation.
“Reko Diq’s ownership structure is a further manifestation of Barrick’s commitment to partnership with its host countries and communities and to sharing the value our operations create fairly with all our stakeholders,” Bristow said.
“We’re making sure that Balochistan and its people will see these benefits quickly. Starting early next year, Barrick will implement a range of social development programs prioritising the improvement of healthcare, education, vocational training, food security and the provision of potable water. Our investment in these is expected to amount to around US$70 million over the feasibility and construction period. In addition, Reko Diq will advance royalties to the government of Balochistan of up to US$50 million until commercial production starts.”
During peak construction the project is expected to employ 7500 people and once in production it will create around 4000 long-term jobs. As elsewhere in the group, Barrick prioritises the employment of local people and host country nationals.
Bristow said Barrick already had the industry's best gold assets and the addition of Reko Diq would promote its copper portfolio into the world-class league, accelerating the company towards its goal of creating the world's most valued gold and copper mining business.
https://www.marketplace.org/2023/01/24/surging-demand-for-copper-means-its-price-is-rising-too/
The world cannot seem to get enough copper. This metal is mined in places as disparate as China, the Democratic Republic of Congo and Utah.
Copper prices have risen around 10% since the start of this year, in part because the metal is crucial to renewable energy technology and the transition away from fossil fuels.
Copper is often referred to as “Dr. Copper,” because it’s considered a barometer for the health of the global economy.
Traders like to play off that saying, according to Bobby Iaccino, co-founder of Path Trading Partners.
“They say copper has a Ph.D. in economics,” he said. “That still doesn’t really explain it, OK? So anywhere where there’s electricity, there’s copper usage.”
Demand for copper is especially high now as the market for renewable energy expands, said Michael Klare, a professor emeritus at Hampshire College.
“You’re going to need a lot more copper for wiring to connect various sources of renewable energy — wind farms and solar farms — to wherever you’re going to use the renewable energy,” Klare said.
And in electric vehicles, the amount of copper needed can be more than double what’s used to make traditional gas-powered vehicles.
This year’s surge in copper prices is in part due to China and its emergence from pandemic-related shutdowns, said Rohan Reddy, director of research at Global X ETFs.
“China makes up about half of all global copper demand. So typically, there’s a saying, ‘As China goes, so does copper,'” Reddy said.
That’s the other copper adage you’ll hear a lot — and one that seems to be holding true. The question now is what happens next in China, said Bart Melek, global head of commodity strategy for TD Securities.
“We continue to see a very significant amount of infections in that country,” Melek said. “And that is something that will take time to work its way through.”
That’s why Melek’s call on copper for the coming months is relatively cautious. Rising interest rates, a potential global economic slowdown — all of it, he said, could take the shine off copper demand.
By Yasir Masood | Gwadar ProDec 12, 2022
https://gwadarpro.pk/1602212868140138497/lithium-fresh-silver-lining-on-economic-horizon-of-pakistan
Pakistan possesses substantial lithium reserves. According to the Metal Mining Agency of Japan, these reserves may fulfil global demand for nearly 500 years. With China and India, two of Pakistan's major trading partners, investing extensively in electric vehicles (EVs), Pakistan has a significant chance of becoming a bigsupplier and a major consumer of this essential commodity.
“Given the existence of favorable geological environments in Pakistan which are found elsewhere for the occurrence of Lithium on a global level, Balochistan, KPK, and GB Provinces have been identified as target areas for finding this commodity in substantial quantities”, said Mr. Muhammad Yaqoob Shah, ex-General Manager (Geology) Pakistan Mineral Development Corporation Islamabad.
https://english.almayadeen.net/articles/analysis/pakistan-is-sitting-on-a-gold-mine
The Reko Diq mine, renowned for its massive gold and copper deposits, is thought to contain the fifth-largest gold deposit in the world.
Reko Diq is a small desert village in the Balochistan district of Chagai, 70 kilometers northwest of Naukundi and close to Pakistan's border with Iran and Afghanistan. This region is situated within the Tethyan belt, which extends from Turkey and Iran to Pakistan. Reko Diq, which in Balochi means "sandy mountain," is also the name of an extinct volcano.
The Reko Diq mine, renowned for its massive gold and copper deposits, is thought to contain the fifth-largest gold deposit in the world. The mine is in a small desert area in the northeast of Balochistan, near the border with Iran and Afghanistan.
600,000 tons of concentrate produce an estimated 200,000 tons of copper and 250,000 ounces of gold on a yearly basis. The annual profit from the mines is estimated by the TCC to be approximately $1.14 billion for copper and $2.50 billion for gold, totaling $3.64 billion annually. Independent estimates suggest the number is as high as $500 billion, which is significantly higher than the TCC's estimation of $200 billion.