ISLAMABAD: The Asian Development Bank (ADB) has finalised a road map for attracting private-sector investment from both domestic and international investors in the mineral sector of Pakistan, especially in Balochistan.
The road map, contained in the final report which has been prepared at the completion of a small-scale policy and advisory assistance, has been designed to help the federal government and Balochistan manage and address issues relating to mining leases and mine development.
It will also guide the government in resolving ongoing and avoiding future disputes in large-scale mining transactions, and other immediate barriers to attracting investment into the mineral sector of the country.
Reko Diq, a small town in Chagai district of Balochistan, has a world-class copper and gold deposits which, if developed, would set the standard for large-scale mining in Pakistan and encourage further substantial investment in the mineral sector.
The proposed $3.3 billion project would build and operate a copper-gold open-pit mine with an estimated mine life of 56 years, using high-efficiency mining techniques and cutting-edge technology.
The project came to a standstill in late 2011 after the Balochistan government rejected the joint venture’s application for a mining lease.
In addition to resolving the Reko Diq dispute, there are other barriers to attracting sustainable investment into the mineral sector in Pakistan. These include award and monitoring of licensing, environmental and social safeguards, and mine security.
The current legal framework does not provide sufficiently clear criteria or detailed explanations for the licensing process. This is a strong deterrent to investors who shun arbitrary, discretionary regulatory decisions — and are concerned about the outcome of the Reko Diq mining project dispute.
The ADB says environmental and social impact assessments (ESIAs) are required as part of application for mining lease, but the evaluation of ESIAs and their enforcement are not properly enacted.
