By Shahid Shah 

A decade long legal battle and negotiations lastly concluded. Finally, a breakthrough achieved in which all stakeholders can be benefited equally. This had been a crucial battle for Pakistan and especially for the people of Balochistan.

Today, what is being defined as a breakthrough agreement, is that Barrick Gold Corp has acknowledged to re initiate the already suspended Reko Diq mine project in Balochistan’s Chaghi district. It was back in July 2019, when Balochistan was again in the limelight. This time because of the conflict with Tethyan Copper Company (TCC) in the Reko Diq gold mine case. Pakistan was awarded with a USD 5.9 billion fine to be paid to TCC by the International Court of Settlement of Investment Disputes (ICSID). This shocking development was a huge hit to Pakistan’s economic growth because the amount of fine was almost equal to the bailout package by IMF to the country.

It was actually twice the size of the current budget of Balochistan. But the fiasco finally comes to an end. The dominant role of Pakistan’s state institutions including the military puts a halt to this Reko Diq fiasco. Pakistan Army was at the forefront to support the government in making this historic deal which will be benefiting the people of Balochistan for the next 100 years.

The new agreement represents a National Consensus. The deal making process included all Federal and Provincial stakeholders including Army (through many Apex Committee meetings, multiple briefings of Balochistan Assembly and approval from Economic Cooperation Council).

The deal was ratified by Federal and Provincial parliaments and was scrutinized by Supreme Court Pakistan. Army played a central role in National consensus which lead to the deal on explicit directions of COAS General Qamar Javed Bajwa. The military leadership was at the vanguard to streamline the Reko Diq deal so that the people of Balochistan could get the maximum benefit. Reputable International Transaction Advisors (Lazard and Evercore) and experts legal Teams (White & Chase) were engaged to ensure optimal terms for Pakistan.

This new agreement will alter the dynamics of Balochistan especially when you compare it with the old agreement. The share of Barrick Gold has been reduced from 75% to 50%. The remaining 50% will be shared between the government of Balochistan (25%) and remaining 25% to the state-owned enterprises PPL, OGDCL, and Government Holding Pakistan (GHPL).

The best part of the new deal is that it is non-equity based, and therefore Government of Balochistan does not have to pay a single penny as compared to the previous deal in which the Balochistan government had a financial contribution of approx. $1 Billion for its 25% share.

The new deal entails following socio-economic advantages for people of Balochistan;
Government of Balochistan share will be paid by Government of Pakistan for long term revenue stream to Balochistan. The project will create Direct job opportunities for approximately 8000 skilled and non-skilled while 12000 indirect jobs. Barrick Gold will invest 1 % (approx. Rs 160 Bn) in social uplift of local areas of Balochistan.

New infrastructure will be established as per the new agreed terms and conditions. Development of new infrastructure includes trade routes, improved connectivity and expansion in trade corridors with already prevailing CPEC projects in the local areas. The jewel of Balochistan is their naturally available minerals. Un-locking of this minerals sector for investments will open vistas of opportunities for the local population. These historic projects will benefit the entire country along with the socio-economic uplift of Balochistan particularly. These developments will prove to be a game changer for the entire province for the next several years.