KARACHI: Pakistan has allowed China’s MCC Resources Development Company (MRDL) to explore and develop eastern mines under the Saindak Copper-Gold Project for another 15 years, officials told Arab News on Wednesday.

A small town in Balochistan’s Chaghi district, Saindak has huge mineral resources. The Chinese company will invest $45 million to explore copper and gold in the East Ore Body (EOB) area of the town where 278 million tons of deposits are estimated.

“The money will be used to purchase machinery and develop the mines after the government of Balochistan has given its consent to extend our lease for the next 15 years,” Humayun Mehmoodi, MRDL vice president, told Arab News. “The current machinery needs to be replaced as it has been in use since 2002.”

Last Friday, Balochistan’s provincial administration informed the federal government that it had extended the stay of Metrological Construction Company of China (MCC) that has an agreement with the federally-owned Saindak Metals Limited (SML), making it possible for the foreign firm to continue the exploration and development work in the area.

Locally registered as MRDL, the MCC has been operating in Balochistan’s remote town since 2002, extracting significant amount of mineral resources from the region.

“The deposits in South and North Ore Body have almost depleted and soon there will be nothing to explore, so we approached the government to get the lease and agreement extended for the development of Eastern Ore Body,” Mehmoodi informed.

“The EOB has 278 million tons of reservoirs. It is the third and the largest reservoir with major content of copper. The mining life of the EOB is around 19 years,” he added.

The company’s contract agreement was scheduled to expire on October 31, 2022. In a letter written to the Federal Ministry of Energy, the Balochistan administration noted that an extension in the lease would “ensure investment of $45 million by MCC/SML at their own risk for exploration and development of East Ore Body in Saindak area.”

According to analysts, Chinese companies are playing an active role in the development of Pakistan’s southwestern province, since they are bringing in investments and technical support.

“The provincial government’s decision to extend the lease shows that it wants to continue the development of the local mining sector. The Chinese investment is also creating job opportunities in Balochistan,” Shaukat Populzai, president of Balochistan Economic Forum, told Arab News.

He added that the development of Gwadar would “change the economic geography of the area.”

MRDL officials say the company is providing employment to 1,890 Pakistanis and 85 percent of them are locals. The company also maintains that it is providing free electricity, water and schooling to the residents of about 60 villages surrounding the area.