Thomas White Global Investing
Pakistan
Pakistan Stamp
September 26, 2008
A Postcard from Pakistan
Pakistan: Mining Potential in Balochistan

Balochistan is also the biggest coal producer in Pakistan, apart from being a mining hub. Balochistan is also the biggest coal producer in Pakistan for more than a century, with annual production of around two million tons.

Balochistan. For centuries, it has been a warrior’s land – fierce, proud and spirited. Now, the largest province in Pakistan, glaring in geographical isolation, is attracting international attention. Rich in mineral deposits, the Rekodiq area in the Chagai district of Balochistan has become an epicenter of investment. In one of the most significant discoveries in the global mining sector, major reserves of coal and copper were found in this impoverished region in 2006.

That discovery ranks Rekodiq among the world’s top seven copper reserves, containing 12.3 million tons of copper and 20.9 million ounces of gold in inferred and indicated resources. Located in dry desert conditions, Rekodiq rests at an elevation of 1,300 meters with total value of the deposits estimated to be more than $65 billion.

Rekodiq first came into the limelight in 1990 when the Geological Survey of Pakistan identified the presence of mineral deposits with the help of BHP. Later, Tethyan Corporation of Australia invested $30 million to help drill more than 75,000 meters into the reserves. Rekodiq is now one of the first private-sector funded mining ventures of its kind in Pakistan. The Balochistan government has a 25% stake in the Rekodiq project, while Antofagasta of Chile and Barrick Gold of Canada own 75% of the project on a 50:50 basis. Conservative estimates state that Rekodiq will have the potential to attract foreign investment of as much as $6 billion over the next five years.

Alongside in the Chagai district is the older Saindak project, one of the pillars of the Pakistani economy. Here, around 15,800 tons of blister copper a year is being jointly developed by Pakistan and China. Rekodiq has now become Saindak’s cousin, with the potential to transform the ancient land of Balochistan into a hub of economic prosperity.

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