Possibly, the biggest copper and gold deposit in the world, why should Reko Diq be an

exception?

In 2010, the Reko Diq Mining Project was calculated to be a US $3.3 billion investment project
to build and operate a world-class copper-gold open-pit mine in the desert conditions of
northwest Balochistan.

The original agreement was signed between GOB in 1993 and BHP Billiton, the Anglo-
Australian mining giant.

Under a “deed of waiver and consent,” BHP Billiton sold 75 per cent of its stake (37.5 per cent
to Chile’s Antofagasta and 37.5 per cent to Canadian Barrick Gold Corporation).

Reports indicate that for establishing Tethyan Copper Company and then selling it to the
Chileans and the Canadians, BHP Billiton stands to make over the US $75 billion over the life of
the project.

That is a colossal profit on the meagre investment made!

If that is true, BHP Billiton makes a cool US $1.125 billion per year for the next 56 years!

Why has the royalty unilaterally reduced from four per cent to two per cent and why was the
GOB, not a party to the agreement?

And what was their original investment?

The modus operandi of one crook pardoning two other crooks is a classic of Pakistan

If Tethyan has spent about US $300 million as the CEO of Tethyan Gerhard Von Barriers as
claimed, it would have been appropriate to take up his offer to appoint international auditors to
verify this.

An investment of US $3.3 billion was projected to be made over the four-year construction
period. However, most of it would be in loans as guaranteed by the gold and copper deposit.
Why was the 25 per cent share of the Balochistan Govt contingent on sharing 25 per cent
expense?

What is the GOB share in the initial investment, including that of providing support services,
security roads and communications?

Does it mean the gold and copper mine-to-be was given free to investors?
CEO Tethyan claimed that the smelting and refining operation was based on a doubtful
perception of benefits. Why were the Chileans and Canadians risking their lives and limbs as
well as their investment in such a dangerous area, almost in the heart of the “Al-Qaeda”
territory? For profits, of course!

If they can make profits, then we should be able to do so, after all, mining is not nuclear science.
Coincidentally, the man who is the father of our first nuclear explosion Samir Mubarakmand was
the Pakistani Head of Tethyan

Originally established in 1988 in Chile as a railway line meant to serve the copper mines, the Antofagasta
group, now, has interests in several other sectors, including mining. Today, it is one of the largest
international copper-producing companies in the world. Canadian Barrick Gold Corporation is the gold
industry leader with 25 operating mines and a pipeline of large, lifelong projects, located across five
continents. It has the world’s largest reserves of 139.8 million ounces of gold, 6.1 billion pounds of
copper reserves and 1.06 billion ounces of silver within gold reserves as of December 31, 2009.

In 2009, Barrick produced 7.42 million ounces of gold at a net cash cost of $363 per ounce and 393
million pounds of copper at a net cash cost of 0.85 per pound. BHP Billiton Iron Ore is one of the world’s
premier suppliers of iron ore. It is the sixth-largest producer of primary aluminium with a network of
operations servicing a global customer base. It is the world’s third-largest copper producer and a leading
producer of lead and zinc.

The annual production of the TCC project is estimated at 200,000 tonnes of copper and 250,000 ounces
of gold from 600,000 tonnes of concentrate.

To achieve this production rate, approximately 110,000 tonnes of ore has to be processed daily. Only
high-efficiency mining techniques and cutting-edge technology can achieve economic feasibility for the
TCC Reko Diq project.

The copper concentrate will contain 28 to 31 per cent copper and seven to 22 grams/tonne gold, which
translates to about 200,000 tonnes of copper and 250,000 ounces of gold per year.

The commercial mining operations are anticipated to last for 56 years with an estimated annual
operating expense of about US $400 million, of this between 45 and 50 per cent will be spent within
Pakistan. TCC claims to have already spent over US $200 million since 2006 on exploration and technical
studies. An initial heavy furnace oil-based combined cycle reciprocating engine was to be installed to
provide 99.5 per cent of availability.

The concentrate produced at the processing plant was to be further fluidised into a 53 to 57 per cent
slurry and transported to Gwadar port via a pipeline. The main features of the pipeline were: (1) World’s
largest underground pipeline 682 km for slurry from Reko Diq to Gwadar port; (2) Leak detection
equipment installed and the pipeline encased in concrete at river crossings; and (3) Three booster
stations established along the route.

To quote Mohammad Ali Talpur from his article “Requiem for Reko Diq”, “Reko Diq, an ancient volcano
in Chaghi, literally means sandy peak. This is something of a misnomer. It should be called Tangav Dik, or
gold peak. Below the sands, lie 12.3 million tonnes of copper and 20.9 million ounces of gold.”
The CEO of Tethyan Copper Company said in 2010 that a feasibility study into the site has confirmed 22
billion pounds of copper and 13 million ounces of gold over the 50-60 year life of the project. Taking the
Tethyan estimate and given the international price of copper at that time (US $8,600 per tonne) and that
of gold (US $1,350 per ounce), and with the cost of production estimated at US $1,500 per tonne for
copper and that of gold at US $350 per ounce, that worked on to a cool profit, at the then international
rates, of approximately US $80 billion for copper and US $156 billion for gold in the 56-years life-cycle of
the project; a total of US $236 billion, or roughly US $4.2 billion per year in profit alone.

Some information about the investors, Chile’s Luksic family owns the Antofagasta Holdings and the
Canadian Munk family owns Barrick Gold Corporation.

The original Chilean company, Antofagasta and Bolivia Railway Company, was incorporated by investors
in the London Stock Exchange in 1888 to finance the railway from La Paz in Bolivia to Antofagasta, a
Chilean port.

Canadian Barrick Gold Corporation is the largest gold mining conglomerate in the world. Two interesting
snippets about the founders of the two firms, both of whom are immigrants from Europe.

The patriarch of the Luksic family, Andrónico Luksic, was born of a Croatian immigrant to Chile and a
Bolivian mother.

On taking over the Antofagasta Railways, he diversified into copper mining, where he became one of the
major forces in the world.

His success story started when Japanese investors were looking to purchase his copper mine in Chile. He
offered it to them at 500,000 pesos, which they mistook for US dollars and paid him US $500,000, ten
times the amount. He refrained from clarifying this “honest” mistake. On taking over his share in
Tethyan’s, in exploration cost, his investment will be about US $100 million (most of his further
investment of US $1 billion will be in loans). This will translate to the US $937 billion profit over 56 years,
about 1000 times the original investment. Andrónico Luksic must have died happy in 2005; getting 10
times more than he should have got from the trusting Japanese. He got 1,000 times from the stupid
Pakistanis.

Similarly, the founder Chairman of Barrick Gold Corporation, Peter Munk CC, was an immigrant from
Hungary.

As a teenager, he left Hungary in 1944 with his family aboard the “Kastner” train, just ahead of the
invading German troops.

Consisting of wealthy jews, this train was given special permission by SS Col Adolf Eichmann.

The 83-years-old Peter Munk has a doctorate, among others, from the prestigious Technion-Israel
Institute of Technology, Haifa, Israel.

While the investors are businessmen, who saw an opportunity and one cannot subscribe to conspiracy
theories, one does question the intention and motives of those Pakistanis during the Musharraf era,
who virtually gifted away conceivably the world’s largest copper and gold mine and got a pittance in
return.
Renowned land developer with incredible connections at the highest levels in all major sectors of
Pakistan, Malik Riaz Hussain, claimed in mid-June 2012 that Dr Arsalan Iftikhar, son of the then Chief
Justice (CJ) of the Supreme Court, Justice Iftikhar Chaudhry, had blackmailed him for the US $3.63
million over a three-year period.

Receipts, housing agreements and even passport and flight details were produced by an associate of
Malik Riaz (and Arsalan’s friend) about Arsalan’s trips and hotel stays in London (Hilton Park Lane) and
Monte Carlo (Hotel de Paris). While Arsalan called the allegations “propaganda”, his father launched a
pre-emptive judicial strike, taking suo-moto action to initiate an investigation against his son; an
unprecedented move in Pakistani judicial history.

Shoaib Suddle uncovered a lot of incriminating evidence against both Malik Riaz and Arsalan;
recommending their prosecution for massive tax evasion. Both having a lot to lose, a compromise was
reached.

With the bureaucracy terrified by Justice Chaudhry’s penchant for suo-moto actions and shaming honest
upright officials publicly in his courtroom, it was not surprising that nothing came of it. Exercising his
“presidential” authority, Asif Zardari put aside Shoaib Siddle’s recommendation to persecute both Malik
Riaz and Arsalan Iftikhar on a number of counts, including tax evasion. This modus operandi is classic
Pakistan, one crook pardoning two other crooks.

Arsalan is not new to controversy and reflects quite negatively on his father. The former CJ was accused
of getting him into medical school, despite insufficient grades, and then a rapid promotion in his first
government assignment. Arsalan ultimately abandoned medicine and started his own
telecommunication business, reportedly doing extremely well in “the operation management and
maintenance of the network of the telecom side.”

At that time, he desperately tried diverting attention from the scam by attempting Imran Khan’s
character assassination and subsequent disbarment by ECP. Bereft of his feared seat of power, could
Arsalan’s father rely on colleagues in his former power base to continue to aid and abet his
machinations? How will that reflect on the superior judiciary?

Attracting widespread criticism, Arsalan was forced to resign within twelve days into the Reko Diq
controversy.

Scrupulously honest Dr Abdul Malik, then Balochistan’s Chief Minister, courageously admitted that it
was a gross mistake. National Party’s Hasil Khan Bizenjo, an illustrious son of one of Pakistan’s most
honest politicians, Ghaus Bux Bizenjo, who was illegally removed as Balochistan Governor by President
Zulfikar Ali Bhutto in 1973, categorically contradicted Arsalan’s blatantly false assertion that his father
knew nothing about it.

In fact, defending Arsalan’s appointment, PML(N) stalwart Mushahidullah touted this as a true “reward”
for Iftikhar Chaudhry’s “many services to the nation.” To the nation or to PML (N)?

Arsalan’s federally-inspired appointment was “Reko Diq-specific.”

Who else was in on the attempted scam?

While the grant of an exploration licence is understandable, one cannot understand why better terms
were not negotiated in 1993? When the question of the first right of refusal arose, who in GOP or GOB
give a waiver to BHP Billiton? Particularly, when it was clear by then that the supposed copper mine was
also quite literally a gold mine? And why is the concentrate being shipped abroad for smelting
purposes? What is stopping Tethyan from making the smelting plants in Pakistan, either at the site (and
if not possible due to security and climate reasons) or at Gwadar or Pasni before the copper concentrate
is shipped out? Why was not GOB (even at 25 per cent), the third party in Tethyan, not privy to the deal
that BHP did in giving out 37.5 per cent each of Tethyan Copper Company (75 per cent) to the Chilean
and Canadian investors?

And what did BHP receive (or will receive) for this transaction, virtually, as a broker for Balochistan’s real
gold estate? Who were the Pakistanis involved at various times in the Federal Govt and GOB? Their
lifestyles and that of their near and dear ones will tell the story. And since the exploration licence was
not to be converted into a mining ore before it expired in February 2011, it would have been interesting
for transparency for the public at large to know who was trying to sell a gold mine for dirt? After 56
years, Balochistan will be left with a lot of waste from the mining of ore, laced full of cyanide.

Since the head of TCC has said they are open to a negotiated settlement, let’s go ahead with this on a
fast-track basis. Maybe, we can do better in the contractual terms for the long term, and they can refine
the slurry in Pakistan instead of shipping it abroad. If negotiations do not succeed and if we have to still
pay them, let’s do US $5 billion on the same basis in instalments, they are to pay US $75 billion to BHP
Billiton over the life of the contract!