Not too far from the besieged government, bright stars of the private sector are carefully preparing to dig their heels deeper in the business landscape of Pakistan.
In the midst of a historic health crisis, besides negotiating mounting political, economic and diplomatic pressures, Prime Minister Imran Khan’s government is struggling to deal with the embarrassment and hefty fine in a case that Pakistan lost to Tethyan Copper Company (TCC) in the International Centre for Settlement of Investment Disputes (ICSID). National Resource Ltd (NRL), however, has occupied itself with a singular purpose: to shape up and secure rights to harness mineral wealth in Balochistan. Open to a whole gambit of ideas, the company is all set to bet multi-billion-rupees to try its luck at Reko Diq gold and copper mines in the restive province.
According to information gathered, four private sector groups controlled by three powerful business families of Pakistan joined forces in a consortium to establish NRL. Yunus Brothers Group, Arif Habib Group, Fatima Group and Liberty Group have formed a consortium to enter the capital-intensive mining sector.
Mohammad Ali Tabba is the chairman of the new mining company. Shamsuddin A Shaikh, who made his name heading Sindh Engro Coal Mining Company earlier, is its CEO. Both gentlemen were approached, but they declined to share insights or comment at the current nascent stage.
Some insiders, however, privately confirmed to Dawn that the initial engagement with Barrick Gold Corporation of Canada for the takeover of its 50 per cent stake in TCC is progressing. The rest of the 50pc stake in the joint venture TCC is controlled by Antofagasta PLC of Chile.
“If NRL succeeds in sealing a deal with the Canadian mining firm, it will firm up its position on the negotiating table with the provincial government and the deep state for the valued mining deal in Balochistan,” said an insider. They did not confirm or deny the probable induction of Metallurgical Corporation of China in the fray at some stage to calm the valued China-Pakistan Economic Corridor (CPEC) partner.
Some members of the hierarchy in Balochistan privately confirmed multiple meetings of NRL officials and backers with the relevant people. They mentioned that in 2019 the provincial government incorporated two companies — Balochistan Mineral Exploration Company (with 10pc shares of federal government and 90pc shares of the Balochistan government) and a cent per cent province-owned Balochistan Mineral Resources — vested with the prime responsibility of working on the feasibility report in Chagai to assess the financial worth of the mining fields. “The aim is to make a more informed decision next time around in the interest of the province and its people.”
Last year, the ICSID slapped a $5.97 billion award on Pakistan against TCC’s claim of over $8.5bn in damages for scrapping a deal midway. In 2011, Naseer Mengal’s interim government in Balochistan declined to grant a mining lease to the overseas company after it completed a bankable feasibility study that confirmed the presence of huge reservoirs of gold and copper at Reko Diq in the economically backward and mineral-rich Chagai district.
The geological literature identifies it to be a part of the mineral-rich arc that stretches from Turkey and Iran into Pakistan. The value of extractable mineral wealth of Reko Diq alone is estimated to run into billions of dollars.
Since the global tribunal’s decision, Pakistan has been trying different options to wriggle out of the tight corner. It had tried the legal rout for a stay and annulment of the award. For an out-of-court settlement, it held multiple meetings with the other party. The ICSID did agree to grant a stay on the award if Pakistan furnished a bank guarantee or a letter of credit equivalent to the value of 25pc of the award within specified time. Immersed in a whirlpool of problems, Pakistan was not able to comply with the decision.
A recent report indicated that the ICSID terminated the stay order on $5.97bn award as Pakistan failed in furnishing the requirements. It signalled to TCC that it might try to collect 50pc of the award ($3.47bn) from Pakistan.
Besides a capacity deficit and lack of seriousness in the ranks of the hierarchy, insiders blamed the submission of loads of official records in the Supreme Court for landing the country in the soup. The public record of official meetings provided TCC with the handle to use it as evidence in the ICSID against Pakistan.
“What do you expect from the plot-promotion-posting brigade?” an expert closely following the case expressed disgust over the handling of the case by top bureaucrats. “They excel in messing up straightforward and simple affairs. The TCC-versus-Pakistan case at a global commercial dispute resolution body was no mean challenge even for committed professionals. Besides, loads of government record of Balochistan cabinet meetings submitted in haste to get the verdict of choice provided TCC with ample evidence to prove mal-intent and not the merit that led to the termination of a done deal.”
“Harmonised with people’s aspirations, strong, transparent and eco-efficient policies to harness the mineral wealth could have changed the fortunes of Balochistan that trails all other provinces in development. Rather than poverty, corruption and conflict that define the province currently, it could have been ahead of the rest with the right set of policies symbolising inclusive growth, self-reliance and social harmony,” commented a close watcher.
