ANOTHER REKO DIQ SCANDAL?
Located in sparsely populated Chagai district in north-western Balochistan and accessible from Quetta-Zahedan highway, Reko Diq has extreme weather ranging from searing summers to freezing winters. High wind and sandstorms demobilises local activities and trade. A large low-grade copper porphyry deposit, Reko Diq has mineral resources totalling 5.9 billion tons of ore with average copper grade 0.41% and gold grade 0.22 g/ton. The economically mineable portion has been calculated at 2.2 billion tons with an average copper grade 0.53% and gold grade 0.30 g/ton.
Reko Diq’s annual production is estimated at 200,000 tons copper and 250,000 ounces gold from 600,000 tons of concentrate. At today’s international prices copper at $7,200/ton (cost of production at $1,500/ton) and gold at $1,320/ounce (cost of production $350/ounce), the profit worked out by Tethyan Copper Company (TCC) was about $1.14 billion for copper and $2.5 billion for gold, $3.64 billion approximately annually. The TCC’s calculation of US $200 billion plus profit over the 55-year life of the mine is disputed, higher estimates range upto US $450-500 billion.
BHP Billiton initially signed the exploration licence with Balochistan govt in 1993, forming TCC later in Australia having 75% and 25% stake respectively. With gold and copper established in substantial quantity, BHP sold its stake, 37.5% each to the Chilean conglomerate Antofagasta Minerals and Canadian company Barrick Gold.
With significant oil and gas business, BHP Billiton is the world’s largest supplier of iron ore and sea-traded hard coking coal and the largest producer of thermal coal, lead and zinc. Producing 3% of the world’s diamond supply, it is the third-largest producer of copper and the world’s sixth-largest producer of aluminum. Originally incorporated in 1888 in Chile as a railway line servicing the copper mines, Antofagasta Holdings Plc (renamed Antofagasta Plc in 1999) diversified into mining and is today the largest copper-producer in the world. With the world’s largest reserves of gold, industry leader Barrick Gold operates 25 mines and multiple projects across five continents. Its resources on Dec 31, 2009 included 6.1 billion pounds of copper and 1.06 billion ounces of silver. Barrick produced 7.42 million ounces of gold and 393 million pounds of copper in 2009 alone.
Who gave the waiver to BHP Billiton to palm off its 75% share in TCC, and at what profit even before a ton of ore was mined? Why were the Chileans and Canadians risking life and limb, as well as their investment, in such a dangerous area? And most mysterious of all, why were they not making the smelting plants in Pakistan, instead of shipping the concentrate abroad?
Malik Riaz Hussain, a renowned land developer with incredible connections at the highest levels in all major sectors of Pakistan, claimed in mid June 2012 that Dr Arsalan Iftikhar, son of the than Chief Justice (CJ) of the Supreme Court, Justice Iftikhar Chaudhry, had blackmailed him out of US$ 3.63 million over a three-year period. Receipts, housing agreements and even passport and flight details were produced by an associate of Malik Riaz (and Arsalan’s friend) about Arsalan’s trips and hotel stays in London (Hilton Park Lane) and Monte Carlo (Hotel de Paris). While Arsalan called the allegations “propaganda”, his father launched a pre-emptive judicial strike, taking suo-moto action to initiate an investigation against his own son, an unprecedented move in Pakistani judicial history. Shoaib Suddle uncovered a lot of incriminating evidence against both Malik Riaz and Arsalan, recommending their prosecution for massive tax evasion. Both having a lot to lose, a compromise seems to have been reached. With the bureaucracy terrified by Justice Chaudhry’s penchant for suo-moto actions and shaming honest upright officials publicly in his courtroom, not surprising that nothing came of it.
Arsalan is not new to controversy reflecting negatively on his father. The former CJ was accused of getting him into medical school despite insufficient grades, and then rapid promotion in his first government assignment. Arsalan ultimately abandoned medicine and started his own telecommunication business, reportedly doing extremely well in “the operation management and maintenance of the network of the telecom side.”
Controversially appointed Vice Chairman Balochistan Investment Board (BIB) despite having no conceivable expertise or experience in attracting foreign investment, Arsalan immediately honed in on the Reko Diq gold mines, announcing an open global tender. Jan Buledi, official spokesperson of the Balochistan government, said his Govt was “acting on advice from the Federal Govt, trying to reach an out-of-court settlement with the TCC as they would not be able to bear the financial losses in case a financial penalty is inflicted by the International Court of Arbitration”. Revealingly, Buledi added, “it will be unfair to prevent TCC from participating in the bidding for a licence”. The legal lacunae was created in the first place on Jan 7, 2013 when a 3-member SC bench headed by Arsalan’s father declared the July 20, 1993 agreement between the Balochistan Govt and TCC void and in conflict with Pakistan laws. Sheer coincidence that the former CJ plans to establish a “consultancy office”?
Attracting widespread criticism, Arsalan was forced to resign within twelve days into the Reko Diq controversy. Scrupulously honest Dr Abdul Malik, Balochistan’s Chief Minister, courageously admitted it was a gross mistake. National Party’s Hasil Khan Bizenjo, illustrious son of one of Pakistan’s most honest politicians, Ghaus Bux Bizenjo, illegally removed as Governor Balochistan by President Zulfikar Ali Bhutto in 1973, categorically contradicted Arsalan’s blatantly false assertion that his father knew nothing about it. In fact, defending Arsalan’s appointment PML(N) stalwart Mushahidullah touted this as a “reward” for Iftikhar Chaudhry’s “many services to the nation”. To the nation or to PML (N)? Arsalan’s Federally-inspired appointment was “Reko Diq-specific.” Who else was in on the attempted scam?
Arsalan Iftikhar is desperately trying to divert attention from the scam by attempting Imran Khan’s character assassination and subsequent disbarment by ECP. Bereft of his feared seat of power, can Arsalan’s father rely on colleagues in his former power base to aid and abet in his machinations?
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