Reko Diq Gold Reserves

REKO DIQ GOLD AND REKO COPPER RESERVES 89th Junior Management Course Mukhtar Ahmad Assistant Manager (CA) NPCC Islamabad

CONTENTS y

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Introduction Location Reserves Tethyan Copper Company (TCC) Investments Controversies clarification Conclusion

Introduction y

Reko Diq is a sparsely populated desert in Balochistan.

It is f amous world wide for its huge Gold & Copper reserves. TCC is developing and will operate a  world class gold mine at this site. Supreme court has recently passed  judgment on this case.

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Location of Reko Diq

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Reko Diq is a remote location in the North-West of Chagai district. It is close to Pakistan, Iran and Af ghanistan border. Access to the Chagai district is via Zahidan - Quetta high way.

Climate y

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Mostly low relief and thinly populated desert. In Summers temperature range is 40oC - 50oC. In  Winters temperature drops to -10oC.  Windy

area with sand storms.

Reserves y

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The deposit at Reko Diq is  world 5th largest reserves. Total reserves : 5.9 billion tons ore Copper grade of 4.1Kg/ton and gold grade of  0.22 g/ton. Mineable portion : 2.2 billion tons Copper grade of 5.3Kg/ton and gold grade of 0.30 g/ton. Mining life is 56 years.

Sample Reko Diq Gold Rock 

Tethyan Belt

Tethyan Copper Company y

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In 1993, the GOB signed an agreement with Australian company BHP Billiton for exploration purposes. TCC was

formed in 2000 TCC company with shares as: 25% GOB 75% BHP Billiton

Tethyan Copper Company

Tethyan Copper Company y

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BHP Billiton sold its share to Barrick  Gold and Antof agasta in 2002. Current share status :Barrick Gold => 37.5% Antofagasta

GOB

=> 37.5% => 25.0%

Investments by TCC y

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So far 220 million US$ have been spent on exploration since 2006. Feasibility report was submitted to GOB in august, 2010. 3.3 billion US$ of initial investment is required. 2 billion US$ is for a 600km pipeline from Reko Diq to G wadar for transportation of the slurry bearing copper.

Controversies y

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25% Share of GOB is very small. Federal govt. is not playing good role. MNC wants maximum profits. Local people will get no benef its. Only copper ore will be extracted . Smelting and refining will be done in f oreign countries .

1.Clarifications and Justifications y

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Media is discussing only the US$260 billion worth of Reko Diq's reserves. They f orget about financial costs, investment costs and technology. They have the right to mine, for they discovered it. GOB has not spending a single penny for exploration.

2.Clarifications and Justifications y

Balochistan Mineral Rules : Balochistan Mineral Rules 2002 also stipulate exclusive rights of exploration to the investor with mining lease entitlement upon discovery of a viable resource.

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50% of the total output when royalties, taxes and 25% profit share are taken into account comes to Govt.

3.Clarifications and Justifications Condition of  the Area Most back  ward and least-developed areas of Pakistan. Very low human development indicators. Harsh  weather . Project like this can really boost the economy and social uplift.

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4.Clarifications and Justifications Smelting and Ref ining Smelting captures less than 10% of the copper economic chain value Smelting and Refining will be done in foreign country. This will vitalize the G wadar port. But now it will be done indigenously too. y

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5.Clarifications and Justifications y

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Rejecting the foreign company will impart a bad image on foreign investors. Lack of Technology and Funds. No significant development in local mining. Example of Saindaq and bad image of  government.

Conclusion y

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Deal should be transparent . We should not reject the foreign investment. We can use local investment on other  sites. We should use the opportunity to boost our local mining industry.