Pakistan to pay firm $6bn over mine closure

Mining in Pakistan’s Balochistan province is dominated by small companies focused primarily on marble and granite. (Reuters/ File)
Updated 14 July 2019

Pakistan to pay firm $6bn over mine closure

  • Country’s legal experts are ‘studying’ financial and legal implications
  • The consortium Tethyan Copper is the largest foreign direct investment mining project in Pakistan

ISLAMABAD: Pakistan will have to pay almost $6 billion in damages to a foreign gold mining firm whose dig was shut down by the government in 2011, the World Bank said on Sunday.

The consortium Tethyan Copper company — of which Canadian gold firm Barrick and Chile’s Antofagasta Minerals control 37.5 percent each — is the largest foreign direct investment mining project in the country.

More than a decade ago the group found vast gold and copper deposits at Reko Diq, in the turbulent southwestern Balochistan province, and had planned a hugely lucrative open-pit mine.

But the project came to a standstill in 2011 after the local government refused to renew the consortium’s lease, and in 2013 Pakistan’s top court declared it invalid.

On Friday, the World Bank’s international arbitration tribunal committee awarded $5.84 billion in damages to Tethyan, according to a statement from the company, because of the government’s decision to shut down the mine.

Pakistan’s attorney general, Anwar Mansoor Khan, said in a statement they had noted the decision “with disappointment.”

The country’s legal experts were “studying the Award and reflecting upon its financial and legal implications,” the statement continued.

Ivan Arriagada, Antofagasta’s Chief Executive Officer, said: “We are pleased to reach this milestone after more than seven years of arbitration.”

“We remain willing to discuss the potential for a negotiated settlement with Pakistan and will continue to protect our commercial interests and legal rights until the conclusion of this dispute,” consortium chairman William Hayes added.

It comes weeks after Prime Minister Imran Khan secured a $6 billion bailout from the International Monetary Fund (IMF), amid devaluations of the rupee and soaring inflation.

Barrick and Antofagasta say the proposed plant could produce 600,000 tons of copper and 250,000 ounces of gold a year.

The provincial government is also a sleeping partner in the Reko Diq project with a 25 percent stake.

Mining in Balochistan is dominated by small companies focused primarily on marble and granite, experts say, which waste up to 80 percent of potential because of poor extraction techniques.

Experts have called for more transparent policies to allow mining to flourish.


Afghan pomegranate growers squeezed as prices drop

Updated 30 min 54 sec ago

Afghan pomegranate growers squeezed as prices drop

  • Renowned for its reputed health benefits, the pomegranate is a point of pride for Afghan farmers
  • In Kandahar province, the prized crimson fruit could grow to the size of small melons

KANDAHAR, Afghanistan: Pomegranate farmers in southern Afghanistan — where growing the juicy fruit is an important alternative to opium poppy production — say they are feeling the squeeze this year, with business blemished by chilly weather, pests and export woes.

The prized crimson fruit, globally renowned for its reputed health benefits, is a point of pride for Afghan farmers, particularly in Kandahar province, where luscious pomegranates the size of small melons dangle from trees.

Every autumn, Afghans start drinking pomegranate juice as the fruit bursts into season. Vendors pile carts high with gravity-defying pomegranate pyramids and offer fresh-squeezed beverages.

Haji Abdul Manan, who has been growing fruit in southern Kandahar for about 30 years, said a springtime cold snap damaged pomegranate flowers, impacting about 40 percent of his crop.

Problems also came from “lice, flies and a fungal disease,” he added, likening a type of greenfly to a natural disaster that had ruined more than 100 of the orb-shaped fruits daily.

“It is the duty of the Afghan government to spray all the gardens in Kandahar and to protect the pomegranates from diseases, but the government is not doing anything,” Manan complained.

Apart from its sweet flavor, fans point to pomegranates’ purported health benefits including high levels of vitamin C and antioxidants that are said to help protect the body.

“Kandahar’s pomegranates are the world’s best for flavor, color, and several times Kandahar’s pomegranates came first in competitions abroad,” Nasrullah Zaheer, the head of Kandahar’s chamber of commerce, told AFP.

In Kandahar, a medium-sized pomegranate goes for the equivalent of about 15 US cents, but by the time the fruit reach Kabul they cost about three times that.

Zaheer and several other farmers claimed Pakistan has this year imposed hefty tariffs on pomegranate imports, which, despite a drop in yield in some parts of Afghanistan, has led to an oversupply in the domestic market and sharp price drops.

But the Pakistan Embassy in Kabul denied such a drastic measure had been taken, saying Pakistan had raised duties only slightly because “Afghan exporters consistently understate the value of pomegranates and fruits.”

Muhammad Hafeez, a fruit and vegetable seller at a market in Islamabad, said the pomegranate supply from Kandahar had not been impacted.

“The supply is in bulk and the quality is good,” Hafeez told AFP.

Abdul Baqi Beena, deputy director of the Kandahar chamber of commerce, said about 40,000 to 50,000 tons of pomegranates were exported annually, including to India, Pakistan, the UAE and Saudi Arabia.

For years, Afghanistan and international donors tried to wean farmers from growing opium poppies by encouraging alternatives such as fruit crops.

But those efforts often failed as drug smugglers offered lucrative prices that normally far exceed the income from traditional agriculture.

The US Agency for International Development previously supported the farming of high-value crops, including pomegranates, as an alternative to opium production, but in recent years has shifted its focus to helping build export markets and supporting Afghan farmers that way.

“There is strong regional demand for high-value Afghan products that generate sufficient profit to justify export cost,” Daniel Corle, USAID team lead for development outreach and communications, said in an email.

“These include pomegranates, pine nuts, apricots, spices, gems, marble, and carpets, among others.”