Saindak Copper & Gold: an unwise decision

Published on – October 30, 2017 – 7:15 am
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QUETTA: The Provincial Chief Minister flown to the Federal Capital specially to attend the signing ceremony between the MCC and the Government of Pakistan extending the contract for five more years for uninterrupted exploitation Copper and Gold at Saindak.


QUETTA: The Provincial Chief Minister flown to the Federal Capital specially to attend the signing ceremony between the MCC and the Government of Pakistan extending the contract for five more years for uninterrupted exploitation Copper and Gold at Saindak.

The MCC, a Chinese company, won the contract to exploit the copper and gold in Balochistan some15 years ago. The military dictator, General ® Pervez Musharraf, handed over the copper and gold reserves to the Company. China was involved in building the entire plant and offered some loan for its construction.

Earlier, the former Prime Minister, Nawaz Sharif, paid an official visit to the Saindak Project along with Chaudhary Nisar Ali Khan, then Minister for Natural Resources, ordered instant closure of the Saindak Project with an expulsion of all Chinese technicians from Pakistan along with the spare-parts and other machinery dump at the site.

The Saindak Project sought loan from a consortium of Pakistani Banks under the leadership of National Bank of Pakistan to take the plant into commercial production. The project successfully completed the trial production under the supervision of the Pakistan technocrats and experts associated with the project for more than a decade.

The trial production was successful and its products were found to be quality product and fetched an attractive price in the international markets. Some of the buyers had shown interest to conclude agreement with the Saindak in buying all its products for the next five years. For this, the interested buyers agreed to pay some advance money to the company after concluding a formal agreement.

The Federal Government under Nawaz Sharif was to offer sovereign guarantee to the Pakistani banks and its consortium to sanction and pay the bank loan to Saindak. Nawaz Sharif and his top aide Chaudhary Nisar contemptuously rejected the proposal and issued negative orders to the banks not to grant any loan to Saindak.

Thus the Saindak Project, the first goldmine project of Pakistan, was closed down on the orders from the Chief Executive of the country.

General Pervez Musharraf took interest and held negotiations with the Chinese Company and finally an agreement was signed the copper and gold project come into operation. Musharraf took decision only after conducting proper investigation by senior most Army Officer who reported positively setting aside the contempt of the Pakistani Prime Minister.

The first agreement with the MCC signed in 2002. Later on it was extended in 2007 and later in 2012 and now it will be the fourth.

At the time of formal launching the project by the MCC, it was publicly announced by the top company official that MCC will establish a refinery separating the copper from Gold for which it will offer a soft loan to the Government of Pakistan.

When the MCC enjoyed complete freedom of exploitation and it was allowed to export the product in form of blister copper, the company changed its mind and ignored the public commitment to the Government and people of Pakistan. The MCC continued to export blister copper without any check and balance.

It was up to the MCC the share of gold in the blister copper and made payment accordingly. Thus the company enjoyed monopoly over the production.

After years, this scribe confronted or reminded another senior official about the commitment to establish the needed refinery, he curtly replied that there is no required production of Blister Copper to establish a refinery confirming the share of gold in the blister copper.

We then suggested to the Government to take blister copper to Sar Chashma copper and gold factory in the neighnourhood of Iran and separate the gold and later export it to the international markets. As usual, the Government also ignored the proposal and endorsed the arbitrary decision of the MCC to exploit the copper and gold without any checks.

Iran is successfully operating a similar plant in our neighbourhood where Iran had established the refinery separating gold from copper before export the precious metals to international market.

Interestingly, the Prime Minister of Pakistan shyly mentioned the word of “blister copper” and avoided in conceding that it is copper and gold and the MCC is allowed to monopolize the only gold mine from Pakistan. He had not mentioned that how many Chinese, particularly unskilled or semi-skill workers brought from China.

Most of the Pakistanis were already working on the project since its inception and Chinese resisted in providing jobs to local people. It was the Pakistani officials and experts who trained the manpower and later provided them jobs. Even a shepherd was picked up by the Pakistani scientists and trained him to man the core library of the Saindak Project.

The Pakistani scientists were found to be finest human in history of Balochistan who worked hard and under the temperature of 54 Degree and minus 16 Degree centigrade. They struck water from subsoil after efforts of years. Water is enough to run the project for more than 200 years. Otherwise the Saindak project was domed.

Months before the Balochistan Government was informed that contract with MCC will expire in months and thus make preparations to take it over and run it under the administration of the Provincial Government. A dedicated team of honest and efficient officials was available to operate the Saindak plants but also capable all future economic development projects.

The existing economy related departments were found to be inefficient and unable to tackle serious economic issues. Thus the departments are reduced to mere salary distributing agencies.

Political leaders and officials were found to more interested in spending money seeking perks and privileges instead of improving the working of the Balochistan Government. The crook bureaucrats were found encouraging the political rulers to run the Government in a primitive manner.

The Government should review its decision with the MCC and hand over the Saindak copper and gold project for operation with a clear perception that all the revenue, including corporate taxes, should go to the Balochistan Government.

The Pakistani technicians and skilled workers are capable to operate the project. In case of separation of gold from copper, the Government can get the service from Sar Chashma plant after making a token payment and later on the copper and gold should be sold to international market. Or Pakistan should build its own gold reserve to boost its national economy.

The Chinese are unpopular in Balochistan for not being good and reliable business and economic partners. They failed to fulfill their corporate responsibility as Nokkundi region is the most backward region where metals worth trillions of dollar is dumped.

The operation of Saindak plant by the Chinese was proved to be a disappointment. The Saindak Project did no left an impact on the local economy or improve the quality of life of the Chagai people.

The Federal Government should surrender all the revenue in favour of the Government of Balochistan for the simple reason that the Government had failed to develop the basic infrastructure for future development during the past 70 long years. Despite the discoveries of score minerals and metals, the Government failed to exploit the resources for the benefit of the entire people of Pakistan.