Chinese firm, Metallurgical Corporation of China (MCC), has been awarded control of Saindak copper-gold project. Shahid Khaqan Abbasi, PM Pakistan, was also present in the ceremony where Chinese firm was awarded the contract extension.
MCC President Zhang Mengxing along with a delegation including, Balochistan Chief Minister Nawab Sanaullah Khan Zehri, Charge de Affairs of Chinese Embassy Zhao Lijian and officials of the Petroleum Division and the Balochistan government attended the ceremony.
MCC and state owned Saindak Metals Limited signed a contract back in 2002 where both companies agreed to a 10-year contract. The contract was to be expired in 2012 when both entities agreed to sign an extension till 2017. The current contract expires on 31st Oct, 2017, however a further 5-year extension has been awarded to the Chinese company. New deal will expire on Oct 30, 2022.
The terms of new contract have been kept confidential like many other deals that take place in Pakistan.
As per the contract terms signed by cabinet in 2001, Saindak project was given to MCC for 10 years. It was also assured that once contract term of 10 years is completed, ownership of project will be transferred to Balochistan government. This step was taken to ensure the implementation of government’s Aghaz-e-Haqooq-e-Balochistan Package (AHBP).
It was also agreed upon by all parties in the contract that lease period will only be extended in case when the federal government doesn’t bear any financial obligations.
The Balochistan government also agreed to extend the contract and continue the arrangement made between SML and MCC. All four stakeholders, MCC, SML, federal and provincial governments, agreed that a North Ore Body (NOB) will be developed.
MCC didn’t completely agree to the NOB development saying it wasn’t economically sound for them. As a result they asked that royalty fees be reduced and rent be waived. MCC agreed to all other terms of the contract.
According to reports, provincial government will earn 25% of total profit among other fees. This arrangement has been criticised by many local nationalist leaders saying Baloch people deserve more.
The federal Cabinet, while approving the new contract, was informed that blister copper was being produced from local areas of Saindak.
The Prime Minister, welcoming the Chinese delegation to Pakistan, appreciated the efforts of the Chinese government and companies of investing in the country. Copper-Gold Saindak project employs over 2,000 Pakistanis and local villages are also provided different facilitates by company.
PM also assured the attendees of the meeting that Pakistan has formulated policies so that foreign investment companies have a working, suitable and friendly environment.
The government of Balochistan had also consented to the continuation of existing arrangements for the project beyond October and the extension of the lease contract between SML and MCC.
Cabinet was also briefed about the project area, saying that project area comprises of east, south and north ore bodies. Two ore bodies, east and north, need development for extraction while the third one, south ore, has been completed.
MCC takes the most from current deal. Currently MCC owns 50% of the shares. Rest of it is divided between Balochistan and Federal Government. Balochistan government owns 35% shares while Federal has 15%.