Pakistan to open up mineral-rich Baluchistan to China ‘Silk Road’ firms

This April 21, 2015 file photo shows Chinese President Xi Jinping and Pakistani Prime Minister Nawaz Sharif in Islamabad, Pakistan. (AP)
Updated 19 February 2018

Pakistan to open up mineral-rich Baluchistan to China ‘Silk Road’ firms

QUETTA: Pakistan’s resource-rich Baluchistan province 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.
Baluchistan has a significant natural gas industry but 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.
Saleh Muhammad Baloch, the province’s top mining official, said the plan is 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.
“They will come as partners and technically support us,” Baloch, who is the province’s secretary for mines, told Reuters in the provincial capital of Quetta this week.
Baloch said the province wanted the projects to be set up close to the source of raw materials and near the new CPEC roads that will connect western China with Pakistan’s Arabian Sea port of Gwadar, in Baluchistan.
A profit-sharing formula will also be negotiated.
Baloch said the finer details of the province’s proposals were being worked out in Islamabad, where officials are finalizing 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, will not fall under the CPEC remit.
“As far as precious metals are concerned, we will go for competitive bidding internationally,” Baloch said.
Baluchistan 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 tons.
“Chinese, Australian, Turkish (companies)...are all interested,” Saleh said.
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 $3 billion investment would be needed for the mine.


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.