Antofagasta to Seek Pakistan Mining License After ‘Good’ Talks
By Firat Kayakiran

March 9 (Bloomberg) -- Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, will seek a mining license for a site in Pakistan that may rival its largest project after “very good” talks with the head of the provincial government.
“We are hopeful because in the last two months there’s been a very positive approach,” Chief Executive Officer Marcelo Awad said in London today. “We have met with the chief minister in Baluchistan, which was very difficult before, and he was very open and very straightforward. It was a very good meeting.”
Antofagasta will seek the license in mid-2010, he said.
The comments mark a shift from a year ago when Awad said Antofagasta, which shares three-quarters of the Reko Diq site with partner Barrick Gold Corp., needed clearer mining laws before it could invest in the development. Reuters in January reported the government, which holds the remaining quarter, planned to cancel the $3 billion project’s exploration license.
“Now they know us for the last three years,” Awad said in an interview. “They have visited Chile and seen our facilities and Barrick’s facilities. They have confidence in us.” The region had poor experiences with prior mining licenses, he said.
Antofagasta planned output of more than 350,000 tons of copper and 900,000 ounces of gold at Reko Diq, in excess of Los Pelambres, its largest mine, Awad said in April. He said at the time that talks had advanced “very slowly.”
The main concern was that foreign companies may report lower metal content than they produce, he said in the interview. “That may have been possible in the past but now with the current equipment it’s impossible. We gave them assurances.”
Final Stages
Resources at Reko Diq are estimated at 4.1 billion tons with a copper grade of 0.5 percent and a gold grade of 0.291 gram a ton, according to Antofagasta. The company plans to boost Los Pelambres output to 407,000 tons in 2010, from 311,600 tons.
“To apply for the mining license you have to present a feasibility study and impact environmental assessment,” Awad said. “They are in the very final stages now.”
The London-based company may be interested in buying companies in Peru, Australia and the U.S. as it seeks to diversify beyond its projects in Chile, Awad said.
“We’ll be looking all the time, but not aggressive,” he said. “We’re a conservative company. We’re looking for companies in a place where we can dig around and expand.”
Antofagasta is interested in businesses with a minimum annual output capacity of 70,000 tons of copper, he said. Excluding acquisitions, the company plans annual production of the metal of 1 million tons within five years, Awad said.
--Editors: Tony Barrett, John Deane
Source: http://www.businessweek.com/news/201...ood-talks.html

Reko Diq is a small town in Chagai District, Balochistan, Pakistan, in a desert area 70 kilometres north west of Naukundi, near to the Iran-Afghan border.
Reko Diq, also the name of an ancient volcano, literally means sandy peak, but this is something of a misnomer. It could be called Tangav Diq, or gold peak, because according to development expert Syed Fazl-e-Haider, below the sands lie some 12.3 million tons of copper and 20.9 million ounces of gold. The copper-gold deposits at Reko Diq are believed to be even bigger than those of Sarcheshmeh in Iran and Escondida in Chile

Source: http://en.wikipedia.org/wiki/Reko_Diq


Reko Diq at melting point
By Syed Fazl-e-Haider

KARACHI, Pakistan - The would-be operator of Pakistan's first world-class copper and gold mine, at Reko Diq, in the southwestern province of Balochistan, still hopes to salvage its US$3 billion copper venture despite a government threat to scrap the deal because of misgivings about the share of benefits.

Tethyan Copper Co (TCC), a joint venture owned by Canada's Barrick Gold and Chilean copper miner Antofagasta along with the Balochistan provincial government, is about to conclude a feasibility study into the site and is expected to apply for a mining license within weeks.

The Balochistan government in December announced the cancellation of the Reko Diq agreement with TCC on the grounds that the company violated their agreement and unnecessarily delayed the project. In January however, the federal government, indicating a willingness to reinstate an agreement with TCC, conditioned a renegotiation of the mining deal on the formation of a joint venture with a smelting firm, as it preferred to sell processed, rather than raw copper, on the international market.

TCC contends that the authorities' proposal to set up a smelting and refining operation is based on a doubtful perception of benefits, as smelting captures less than 10% of the copper chain value. Some analysts claim that Islamabad has agreed to reinstate the agreement with TCC under pressure from the United States. Washington strongly opposed the provincial government's decision to scrap the Reko Diq deal, which threatened to deprive the country's least developed province of more than $3 billion in investments.

"The problem to a very large extent is not having the basics of understanding in place," Reuters quoted TCC chief executive Peter Jezek as saying. "There is a combination of a lack of information and fear of the unknown. Mining and concentrating actually captures over 90% of the copper chain value, smelting less than 10%. We have pointed out that the economics of smelting and refining are very poor."

TCC, which holds a 75% interest in Reko Diq, has until now been silent on the issue since the Balochistan government, which owns a 25% stake in the project, announced its decision and handed over the project's affairs to the provincial department of mines and mineral development. The department plans to establish a smelting plant in the Reko Diq area for processing 15,000 tonnes of ore.

In January, Islamabad warned that it would bring in new copper firms to perform both mining and smelting works unless the current players make a joint venture with a smelting firm. The federal government has estimated that exports from Reko Diq could be worth $500 billion and regrets the sale of the 75% stake at what it now considers a throwaway price under the government of former president Pervez Musharraf.

"I think we have sold our future," then federal finance minister Shaukat Tarin said, Business Recorder reported on January 20. "Any government, anywhere in the world, can renegotiate such contracts on the basis of national interests, and we will do the same. If we are able to export processed metal, we can fetch up to $500 billion instead of $40 billion under the existing agreement."

The Reko Diq mine is expected to yield 10 billion kilograms of copper and 368 million grams of gold over the 50-60 year lifespan of the project.

Balochistan's chief minister, Nawab Aslam Raisani, said in December the agreement had been terminated in the interest of the people of the province. Local demands and needs were not taken into account when the initial agreements were signed, he said.

The provincial government has acquired the services of Samar Mubarakmand, a Pakistani nuclear scientist, to head the board of governors overseeing the project, other members being the secretaries of finance, industries and mines and mineral development, the president of the Balochistan Mine Owners' Association, and the project's managing director.

Critics say the provincial department of mines and mineral development has done nothing significant to develop the mining industry in the mineral-rich province. With exploitation of precious minerals and energy resources, including oil, gas, iron, coal, copper and gold, the province could have sufficient funds to finance its development projects and run its affairs without relying on the central government. They now question what the role of the provincial department will be if the project is to be overseen by a nuclear scientist in Islamabad.

The original contract for Reko Diq exploration was signed in 1993 with BHP Minerals, which established a joint venture with the local government, leading to a deed of waiver and consent signed in 2000. TCC, then a subsidiary of Australian Mincor Resources, had an alliance with BHP. Antofagasta and Barrick Gold took over 100% of TCC in 2006, and during the past three years, the project has made more progress than in the previous 13.

Even so, it is still not clear why TCC announced last year that it would invest more than $3 billion in the project when it had only an exploration license for Reko Diq. The former provincial authorities were silent when TCC sold its interests to Antofagasta and Barrick Gold in 2006. Similarly, the present provincial government did not react when the international miners last year announced their investment plan.

The provincial government can still protect the province's interests by negotiating a mining deal with TCC rather than scrapping the relationship outright. The Balochistan Economic Forum recently suggested that a provincial assembly committee along with a sub-committee consisting of local stakeholders and including the investors should be formed to remove all irritants with mutual consent.

Syed Fazl-e-Haider (www.syedfazlehaider.com) is a development analyst in Pakistan. He is the author of many books, including The Economic Development of Balochistan (2004).

Source: http://www.atimes.com/atimes/South_Asia/LC12Df02.html





Reko Diq Mystery: Why Neocons and Zionists are after Balochistan?



Rich mineral resources will help economic development

By Ayesha Haq

Reko Diq a small town in Chagai District, Baluchistan is known to have the world’s largest gold and copper reserves. It is a world class copper / gold porphyry style deposit, typical of the tethyan belt. Reko Diq, also the name of an ancient volcano, literally means sandy peak, but this is something of a misnomer. It could be called Tangav Diq, or gold peak, because according to development experts, below the sands lie some 12.3 million tons of copper and 20.9 million ounces of old. The copper-gold deposits are believed to be even bigger than Sarcheshmeh in Iran and Escondida in Chile. Sarcheshmeh is a large open-cast copper mine and is considered to be the world’s second-largest copper deposit. Escondida, with 57.6 million tonnes of resources, is the world’s highest producing copper mine. The Reko Diq copper deposit, which is in the neighbourhood of Saindak copper project, is four times larger in copper ore tonnage than Saindak.

The most credible international surveys suggest that Reko Diq is one of the biggest undeveloped copper projects in the world. So far, three foreign companies have purchased stakes in the strategic copper and gold assets setting off a cycle of ‘change of foreign ownership’ of the copper project. Pakistan has only 25 per cent stake and the rest of the 75 per cent stakes had first been transferred to BHP Billiton, the Anglo-Australian mining giant and then BHP Billiton under a ‘deed of waiver and consent’ transferred it to the Australian TCC and now TCC has sold its 19.95 per cent stake to Antofagasta Minerals.

The Reko Diq deposit is being explored by Tethyan Copper Company Pty Ltd (75%) and the (BDA) Balochistan Development Authority (25%). Tethyan Copper Company is held jointly (50:50) by Barrick Gold Corporation and Antofagasta Minerals.

Canada’s Barrick Gold and Chile’s Antofagasta plan to invest up to US$3 billion in a copper and gold mine at Reko Diq in Pakistan’s south western province of Balochistan, is expected to be the single-largest foreign investment in Pakistan in the fiscal year that started on July 1 and is larger than the $3.32 billion of total foreign direct investment for the first 11 months of the 2008-09 fiscal year.

Like Escondida, Reko Diq could become an important part of the national as well as provincial economy. In 2007, Escondida produced 1.48 million tonnes of copper, mainly as copper concentrate, worth $10.12 billion. As a result of extensive drilling in the area, about 167 million tonnes of copper ore reserves have been proved.

In the international market, each stage of copper production is tradable from copper concentrate, smelted copper and blister copper to refined copper or pure copper. Copper is currently being sold at an average price of US$4,000 a tonne in the world metal market.

The government is expected to launch the project with an investment of $1 billion by 2010. The project is expected to create up to 9,000 jobs in the construction phase, which will last for about three years, then employ up to 3,000 people once the mine is operational. Tethyan initially plans to bring in mining experts from the outside while training and developing the local workforce.

The Chinese engaged in the Saindak copper project are committed to transferring technology in copper mining and to training Pakistani engineers and workers.

The wealth from Reko Diq may enable Pakistan to retire its external debt and liabilities, which have surged to $50.9 billion. Economically backward Balochistan province could also attain enough fiscal space and financial health to finance its social-sector development projects and run its financial affairs without relying on the central government.

REKO DIQ and SANDIK are two such jewels in the crown of Pakistan that if handled properly and with Nationalistic spirit will in the long run make Pakistan a prosperous and developed country no longer dependent on UNCLE SAM, IMF or the Begging bowl.

The people of Pakistan must realize their hidden potentials their inherent strength and their un-matched capabilities which if channelized and handled properly under a truly peoples representative government will turn the tables in a short time.


Pakistan to cancel $3bn Barrick, Antofagasta-owned copper-gold project

Barrick and Antofagasta JV, Tethyan Copper's Reko Diq exploration licence could be cancelled in an attempt to ease anger in Pakistan's poorest province but, the company says it has yet to be officially informed of such a decision
Author: Kamran Haider and Cameron French (Reuters)
Posted: Tuesday , 12 Jan 2010

ISLAMABAD/TORONTO (Reuters) -

A Pakistani provincial government plans to cancel a $3 billion joint venture copper and gold project owned by Canada's Barrick Gold (ABX.TO) and Chilean copper miner Antofagasta (ANTO.L), a provincial mining official said on Tuesday.

The two companies are partners in the Tethyan Copper Co (TCC) joint venture, which has a 75% interest in the Reko Diq project in the southwestern province of Baluchistan and hold the exploration license for the site. The provincial government holds the remaining 25%.

The cancellation of the license -- apparently meant to ease anger in Pakistan's poorest province over outsider exploitation of its natural resources -- would further damage Pakistan's image as a destination for foreign investment and would throw a wrench into the plans of the mining companies.

"The cabinet has said they wanted to cancel the exploration license but it has not been finalised," Mushtaq Ahmed, secretary for the provincial mining ministry, told Reuters.

He said there was a chance the deal would not be canceled, and that the situation should be clarified in coming days.

The deposit holds more than 11 billion pounds of copper and 9 million ounces of gold.

A Tethyan official said the company had not been officially informed of any decision by the provincial government to cancel the deal, although that was the company's interpretation of developments.

Shares of both Barrick and Antofagasta, which had planned to have a feasibility study done on Reko Diq by mid-2010, were down slightly.

"TCC is looking into the current situation and seeking clarification to satisfactorily resolve (it)," said Vince Borg, spokesman for Barrick, which is the world's top gold producer.

Barrick stock was down 2.6%, or C$1.10, at C$41.90 on the Toronto Stock Exchange, while London-listed Antofagasta fell 1.9 percent to 1003 pence.

LOW-LEVEL INSURGENCY

Separatist guerrillas in Baluchistan have been fighting a low-level insurgency for decades for control of the province's gas and mineral resources, which they say are unfairly exploited by the country's richer and more powerful provinces.

The provincial government recently said the cancellation of the Reko Diq agreement would be a "step towards getting control of the provincial resources in accordance with the wishes of the people."

Many investors are hesitant to invest in Pakistan because of security worries as the country battles a Taliban insurgency in the northwest. There has been a wave of suicide attacks over the past couple of years, some targeting foreigners.

Net foreign investment in Pakistan fell 25.6 percent to $1.08 billion in the first five months of the 2009-10 (July-June) fiscal year from $1.45 billion in the same period a year earlier, the central bank said last month.

Foreign direct investment fell 52.2 percent to $774.0 million in that period from $1.62 billion, the State Bank of Pakistan said.

(Additional reporting by Sahar Ahmed; additional reporting and writing by Cameron French in Toronto; writing by Robert Birsel; editing by Rob Wilson)

material taken from different articles

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