Will the Canadian Barrick Gold Company strengthen its business in the port of Gwadar? – the diplomat

At its inception in 2007, Gwadar Port was expected to be a success. Its strategic location at the mouth of the Strait of Hormuz – an important waterway that opens to the ocean and through which passes more than a sixth of global oil production and a third of the world’s liquefied natural gas (LPG) – was expected to attract. International shipping, trade and industry to port.

However, these expectations were not fulfilled. While between 15 and 17 million barrels of oil pass through the waters off the coast of Gwadar every day, the port itself has remained silent with very little activity.

There are several reasons for the lack of activity in the port of Gwadar. The most important of these factors is the political instability and armed insurgency in Balochistan Province over the past two decades. But also, the current low capacity of cranes, berths, berths, warehousing and other infrastructure and facilities at the port is a major hindrance in making the port a successful ‘gateway’ to the China-Pakistan Economic Corridor (CPEC).

However, by expanding port facilities, building a free zone and East Highway In Gwadar, both Pakistan and China are seeking Attract trade and deals with foreign companies. One of these deals on the horizon is the one with Al Kindi Barrick Gold CompanyOne of the largest gold mining companies in the world.

Barrick plans to extract gold in Balochistan from an area about 1,000 km from Karachi port and 650 km from Gwadar port. Currently, Chinese companies, extracting minerals from northwest Balochistan, are trucking them to the already crowded port of Karachi.

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Barrick’s team and Gwadar Port Authority (GPA) also discussed in their last meetingAnd the Using Gwadar port will reduce the distance, time and transportation cost. Half the distance between the gold reserves and the port of Gwadar can be reached via M8 motorway. A new highway will have to be constructed for the rest of the route.

Parik’s interest in investing billions of dollars in the gold mining project and the port of Gwadar, and the use of the latter for shipping minerals, appears to be an opportunity for Gwadar to tap into its long-awaited economic potential.

But past experiences with international investors and mineral mining in Balochistan raise many doubts. This doubt is not without foundation.

Barrick plans to work on Rico Dig Gold Mines In the Shagi region of Balochistan, bordering Iran and Afghanistan (Pakistan nuclear tests were conducted in 1998 in Shaghi).

The government of Pakistan, the provincial government of Balochistan and Barrick Gold Corporation have reached a preliminary agreement under which the company will invest 7 billion dollars in mining project It owns 50 per cent of the shares, while the remaining 50 per cent will be shared equally between the Federal Government and the Government of Balochistan.

The Reqo Dik area reportedly contains Fifth largest gold deposits in the worldIn addition to many other minerals. Its mineral wealth and the high profits it promises have prompted international companies to risk investing here despite the fragile political situation and the multiple security threats they face here.

Their interest began as early as 1961 after the Pakistan Geological Survey and the US Geological Survey identified the area as rich in minerals. More comprehensive studies in 1971 and 1974 confirmed the results of previous surveys.

The two main areas identified by these surveys in Shaggy County are Sendak and Rico Deck. A Chinese company signed an agreement with Pakistan and started mining in Saindak in 2002. As for Reqo Dik, the Balochistan Development Authority and an Australian mining company BHP Metals A deal was signed in 1993 establishing the Chaghi Hills Exploration Joint Venture to explore the Reqo Dik mineral area.

When a BHP feasibility study confirmed Reqo Dik as one of the largest undeveloped copper and gold deposits in the world, it claimed 75% of the stake In total discoveries for the next 56 years. However, the company did not start mining for several years.

Then in 2000, BHP delivered Reqo Dik A deal with Tethyan Copper (TCC), a joint venture between Antofagasta in Chile and Barrick Gold Corporation. Both Companies spent 200-400 million dollars to take full responsibility for the project in 2006. Meanwhile, in 2010, media investigations published the terms of the deal, which angered Baloch nationalist activists and politicians, as the terms were seen as allowing “foreigners” to exploit and benefit from Balochistan’s natural resources even where it was The county’s residents struggle with extreme poverty.

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Under pressure from the nationalists, the government of Balochistan refused to convert the exploration permit into a mining license, thus ending the deal with TCC. In 2011, the TCC took the case to the Supreme Court of Pakistan, which issued its ruling For the government of Balochistan. TCC did not give up and took the case in the same year to the World Bank under the International Center for Settlement of Investment Disputes. In 2016, TCC won the case and Pakistan was responsible for paying billions of dollars in damages for breaching the agreement and denying TCC’s mining license.

To avoid paying fines, Pakistan has been engaged in out-of-court negotiations with the TCC for several years. Finally, in early 2022, announced a settlement of the case But through a new deal Antofagasta backed out of reinvesting or restarting any Reqo Dik-related project. However, Barrick Gold Corporation is once again in the game.

As of now, Barrick plans to invest not only in mineral extraction but also in Gwadar port for shipping and social sector development in the greater Gwadar and Balochistan region. Mining is expected to start in 2027-28. Early investments are expected to create thousands of jobs in the region, particularly in Chaghi and Gwadar. But it remains to be seen if the locals will benefit.

Several studies, including Last By researchers at the China Naval Studies Institute (CMSI) at the US Naval War College, they assert that mining and exporting Balochistan’s mineral resources is a huge business opportunity for the region. These studies indicate that a large number of shipments and export quantities especially high-value resources can bring unprecedented profits to Pakistan and make Gwadar port one of the major ports in the region.

But the fact that Barik took Pakistan to court earlier in cases that lasted more than a decade and could have cost Islamabad billions of dollars does not bode well. It is a fact that Pakistan only allowed Barik back to escape huge fines.

Gwadar could already emerge as an important port. But first, the Pakistani and Chinese authorities and now Barrick need to improve the port’s access to water, electricity and other basic facilities. Most importantly, Barrick, the Federal and Provincial Government and the Gwadar Port Authority should make the details of the deal public so that people are aware of what is happening to their resources, the port and where that they Fit the big picture.

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