Prime Minister Imran Khan’s commitment to set up a commission to investigate how Pakistan ended up owing around $6 billion to a mining company, which discovered gold and copper in Balochistan, has found no takers. Reason: Army’s ‘neck-deep’ role in seizing control of the mines at the cost of Pakistan’s economy.
Last year, in a major dispute, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) asked Pakistan to pay the massive penalty, that is two per cent of its GDP, to Tethyan Copper Company (TCC), a multinational mining giant.
The TCC had acquired the mines at Reko Diq in Balochistan, in 2006. But after the company discovered gold and copper deposits at Reko Diq, Pakistan rejected its mining lease application in 2011, resulting in a dispute with the TCC claiming $8.5 billion in damages.
When the ICSID last year settled the dispute in favour of the TCC, Prime Minister Imran Khan who was already struggling with an economic crisis inherited from his predecessors, announced to set up a commission to identify the sources and reasons for such a financial disaster.
As the fine amounts to 40 per cent of Pakistan’s total liquid foreign reserves, the Imran Khan government has been trying to get a stay on the enforcement of the penalty and have made several efforts to get the fine annulled.
Sources said even as Islamabad is scrambling for options, none in the civilian government will investigate the reasons as to how Pakistan landed in such a soup. “That is because everyone in Pakistan knows that it is the Pakistani military-industrial complex which has emptied the public exchequer and Pakistan’s economy as well,” sources in Islamabad said.
As per a Hudson institute report written by Pakistani scholar and former ambassador to the US, Hussain Haqqani, it was the Army which orchestrated the ejection of foreign companies from Reko Diq area of Balochistan. A persistent campaign led by Pakistani nuclear scientist Samar Mubarakmand and backed by the military, against the TCC, led to Pakistan’s Supreme Court, ordering the cancellation of the company’s contract in 2013.
After the discovery of gold and copper mines in Balochistan by the TCC, the military-industrial complex saw an opportunity for itself. The Army ensured Mubarakmand’s company got the contract for mining gold and copper while some of the Reko Diq mines were turned over to the Metallurgical Corporation of China (MCC).
However, as per the Hudson report, neither the Chinese nor the nuclear scientist’s company could extract any copper or gold in Reko Diq. The Chinese are still said to be involved in the mining project as part of the China-Pakistan Economic Corridor (CPEC), the report said.
Balochistan nationalists, who deem Pakistan an occupier of its territory and resources, have been opposed to the CPEC and demand its exit.
Interestingly, one of the Pakistan army run companies, Frontier Works Organisation (FWO), a road and buildings constructor, which has no expertise or experience in mining, is now involved with the Reko Diq project.
FWO is the same organization which undertook civil works of the Kartarpur Corridor project connecting Gurdwara Darbar Sahib, Kartarpur, to the border with India, last year. The corruption of the FWO was exposed in April this year, when eight domes of the renovated Gurdwara crashed during a thunderstorm, due to inferior quality of the construction.