QUETTA: Balochistan wants Chinese companies to kick-start a boom in its mining industry by including the sector into Beijing’s Belt and Road initiative, a senior provincial mining official said.

Beijing has pledged $57 billion for the China-Pakistan Economic Corridor (CPEC), a flagship Belt and Road project that first focused on Chinese firms building roads and power stations but is now expanding to include setting up industries.

Mineral extraction is a deeply contentious issue in Balochistan, as the province remains the country’s poorest despite its vast mineral wealth.

Although it has a significant natural gas industry, large-scale mining has failed to take off. Foreign firms have been put off by security fears and a high-profile litigation case with Canada’s Barrick Gold and Chile’s Antofagasta over Reko Diq, one of the world’s biggest undeveloped gold and copper mines, in the province.

Balochistan’s top mining official, Saleh Mohammad Baloch, said the plan was for Chinese companies chosen by Beijing to team up with local firms to mine marble, chromite, limestone, coal and other minerals, and set up steel mills and other plants.

Extraction of precious metals like gold will not fall under the CPEC remit

“They will come as partners and technically support us,” Mr Baloch, who is the province’s secretary for mines, told Reuters in Quetta this week.

He said the province wanted the projects to be set up close to the source of raw materials and near the CPEC roads that would connect western China with Gwadar. A profit-sharing formula will also be negotiated, he added.

Mr Baloch said the finer details of the province’s proposals were being worked out in Islamabad, where officials were finalising plans for special economic zones and greater integration of Chinese companies into Pakistan’s economy.

He cited the Saindak copper and gold mine, operated by a subsidiary of state-run China Metallurgical Group Corporation, as an example to follow. The mine has been given export privileges and enjoys big tax breaks. However, extraction of precious metals, such as copper and gold, would not fall under the CPEC remit, he pointed out.

“As far as precious metals are concerned, we will go for competitive bidding internationally,” Mr Baloch said.

Balochistan is seeking formal expressions of interest by international companies for an exploration block in the Tethyan belt, which boasts big copper and gold deposits. The H4 block has estimated deposits of 148 million tonnes.

“Chinese, Australian, Turkish (companies)...are all interested,” said the mining expert.

The H4 block is nearby the much richer Tethyan belt blocks mired in a legal dispute in international courts between Pakistan and Tethyan Copper Company, which is owned by Barrick Gold and Antofagasta.

Barrick Gold estimates a $3bn investment would be needed for the mine. Mr Baloch said he could not comment on the Reko Diq case because of legal cases.

Published in Dawn, June 3rd, 2017