Chinese mining firm gets 15-year lease for copper, gold exploration in Saindak

Chinese mining firm gets 15-year lease for copper, gold exploration in Saindak. (Phot courtesy: Social Media)
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Updated 02 July 2020

Chinese mining firm gets 15-year lease for copper, gold exploration in Saindak

  • The East Ore Body area contains about 278 million tons of copper and gold deposits
  • China’s MRDL will invest $45 million on the purchase of machinery and development of mines

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.

Pakistan gets lifeline till Feb 2021 as FATF continues to keep it on grey list

Updated 23 October 2020

Pakistan gets lifeline till Feb 2021 as FATF continues to keep it on grey list

  • The country has completed 21 out of 27 items of the global financial watchdog’s action plan, acknowledges FATF officials
  • The government of Pakistan has signaled the commitment to complete the rest of the action plan, says the FATF president

KARACHI: The global financial watchdog, the Financial Action Task Force (FATF), decided on Friday to keep Pakistan on its “grey list” while acknowledging that the country had made significant progress in meeting international anti-terrorism financing norms and should not be downgraded to the “blacklist.”

The FATF began its virtual plenary meeting on October 21 under the first two-year German presidency of Dr Marcus Pleyer.

“Pakistan will remain our increased monitoring list,” he announced after the end of the conference. “The plenary recognizes that Pakistan has made progress. The government has now completed 21 out of 27 items of its action plan. The government of Pakistan has signaled the commitment to complete the rest of its action plan.”

“Even though Pakistan has made progress it needs to do more,” he continued. “It cannot stop now and needs to carry out reforms in particular to implement targeted financial sanctions and prosecuting sanctions financing terrorism.”

Responding to a question, the FATF president said that onsite inspection would be carried out after the next plenary in February 2021 to decide about Pakistan’s exclusion from the grey list.

Pakistan was placed on the list of countries with inadequate controls over terrorism financing by the FATF in June 2018.

The Asia-Pacific Group on Money Laundering (APG), an inter-governmental organization in the Asia-Pacific region, issued the first Follow Up Report (FUR) on Pakistan last month.

The report reflected the country’s performance until February 2020 and noted that it had complied with only two recommendations related to financial institution secrecy laws and financial intelligence units out of 40 recommendations on the effectiveness of anti-money laundering and combating financing terror (AML/CFT) system.

However, Pakistan managed to pass three crucial FATF-related laws during a joint session of parliament in September this year. With these laws, the country managed to comply with most of the legislation required by the international watchdog to strength the country’s financial system.

The FATF “strongly” urged Pakistan in February this year to complete its full action plan by June 2020, warning it would take action against the country which could include advising financial institutions to give special attention to business relations and transactions with Pakistan. Later, the deadline was extended and the country was given time until October 2020 due to the COVID-19 pandemic.

Pakistan also punished Hafiz Saeed, a Jamaat-ud-Dawa leader, in a terror financing case and decided to send him to prison for five and a half years.

Commenting on the FATF decision, financial experts said the decision to keep Pakistan on grey list owed to the government’s hasty legislation.

“The most vital issue relates to the roles assigned to the AML-CFT authority and self-regulatory bodies. These laws give powers to regulate AML-CFT to various government and professional bodies. They were not carefully drafted, create conflict of interest, and are complicated and ambiguous,” Dr Ikram ul Haq, a Lahore-based senior economist, said after the FATF decision.

The FATF blacklist have international pariah states like Iran and North Korea, and these countries are shunned by international financial institutions.