Recodec Copper and Gold Mining; Issues & Recommendations

Present scenario & Challenges Ahead

The Supreme Court on Monday dated 7th January 2013 declared the Rekodiq mining lease case (Chaghai Hills Exploration Joint Venture Agreement (CHEJVA) illegal saying its execution was contrary to the provisions of various laws of the land. A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, in its 16-page short order in response to identical petitions filed against leasing out the gold and copper mines, including the world’s biggest gold mine worth over $260 billion situated at RekoDiq, in Balochistan to the foreign companies by the federal government.

Earlier, on December 21, 2012 the court has reserved its judgment after completion of arguments of all the petitioners and respondents. “The CHEJVA dated July 23, 1993 is held to have been executed contrary to the provisions of the Mineral Development Act, 1948, the Mining concession Rules, 1970 framed there under, the Contract Act, 1872, the Transfer of Property Act, 1982, etc., and is even otherwise not valid therefore, the same is declared to be illegal, void and non est”, the court ruled. The court maintained that the ‘Novation Agreement’ for the RekoDiq mining lease was purportedly made for the purpose of substituting CHEJVA, adding that the Government of Balochistan was also made party to the joint venture. The court ruled that it was not permissible under Balochistan Mining Rules (BMR) 2002 as well as the Rules of Business of the government of Balochistan (GOB), particularly Rule 7 and other rules.

“The government of Balochistan in purported exercise of the powers vested in it under the BMR 2002m granted relaxations in violation of Rules 98 ibid as no reason was assigned for the relaxation of the relevant rules”, says the court order. Declaring all the amendments in the CHEJVA illegal the court held, “The Addendum No.1 dated March 04, 2000, Option Agreement dated April 28. 2000, Alliance Agreement dated April 03, 2002 and Novation Agreement dated April 01,2006, which are based upon, and emanate from, CHEJVA are also held to be illegal and void”. The court further noted that all the agreements in result of the addendum in the instant matter do not confer any right on BHP, MINCOR, TCC, TCCP, Antofagasta or Barrick gold.

The short order further said, “EL-5 is tantamount to exploration contrary to rules and regulations as the claim of TCCP is based on CHEJVA, which do0cuments itself has been held to be non est. Therefore, before exploration it was incumbent upon it to have sought rectification of its legal status”.


Keeping in view the facts explained above, one of the dominant factor that caused issues like Rikodeq copper and gold mine is political that resulted in discontinuation of policies and diverted attention. The rivalry, biasness and political leg-pulling among stakeholders deteriorated all hopes regarding development of these mines. This inconsistency kept the exploitation and development of natural wealth not only unattended but controversial too. However, it would be unfair to put all the burden of poor resource management on the political factors. The bureaucratic bottlenecks and corruption have been equally responsible for this undesirable scenario. The stand still in the Rikodeq project is an example of this case. Pakistan is ranked at 34 in Corruption Perception Index 2010 by Transparency International, which is a discouraging factor for foreign direct investment.
In addition, the worsened law and order situation in Balochistan has caused severe blow to the economy in general and future of natural resource management in particular. The volatile situation in the Province is harmful to the exploitation of resources. Besides mines and minerals, the Gawadar port, despite being located at crucial location, has not been made fully functional. Other projects of mineral exploration are also affected. These factors of poor management have placed Pakistan in an undesirable situation domestically and internationally. The socio-economic situation remains gloomy as the GDP growth rate is one of the lowest in South Asia at 2.2 percent, trade deficit is estimated about $16 billion, inflation rate continues to be in double digits at 15 percent, population below poverty line is alarmingly around 35 percent, and unemployment is at 15 percent.
On the other hand, the politicians, policy makers and all the stake holders must adopt a rational approach not to politicize the Rikodeq mines. It should be prioritized as the vital national interest and dealt with as such. All the associated controversies on the management of Rekodeq resources must be resolved pragmatically for best interest of the nation. Last but not the least, worsened law and order situation in Pakistan in general and Balochistan in particular has led to boiling down of investment, which needs an urgent check. The private firms engaged in resource exploration must be protected by the state. Ensuring the security, would attract investment in the respective areas which would subsequently guarantee the inflow of capital in the national economy and the resource potential could be fully exploited.
It needs not to be emphasized that Pakistan is not poor but poor management of its natural resources has made it so. The billion dollars resources of Rikodeq have made this country a bird that lays golden eggs. Instead, there been bleak picture of economy and undesirable image outside due to the chronic flaws in vision and policies. Thus, the daunting challenge of poor management of these resources direly needs to be addressed not only to overcome the perils caused due to it but also to achieve economic self sufficiency and prosperity of the Province.


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