If pact not signed with any firm: ''Balochistan can carry out Reko Diq project''

Federal government has agreed with the Balochistan government to carry out Reko Diq Gold/Copper Project from its own financial resources if mining and refining agreement has not been signed with any firm, Business Recorder has learnt.
"If the project is to be bifurcated involving some other companies, the draft agreement shall be vetted by Law and Justice Division to ensure transparency and consistency with international law," sources said adding that project will be funded by Balochistan government from its own Annual Development Plan (ADP). Before launching project, government of Balochistan will check from the courts about litigation on the issue if any.
According to a summary tabled before Executive Committee of National Economic Council (Ecnec) in its meeting held on December 9, 2010, Rekodiq is the fifth largest copper ore reserve in the world with 0.8 percent copper content that would generate annual income of Rs 15.8 billion equivalent $185.25 million.
Department of Mines and Minerals, government of Balochistan envisages creating a facility for processing 15,000 tons per day of copper ore to produce copper metal, and other valuables such as gold, silver, molybdenum and sulphuric Acid etc at Reko Diq. This facility will be for the production of copper and gold ingots only.
A separate project however will be required for conversion of ingots into value added products such as sheets pipes and rods etc as per requirement. It is estimated that annual income of the project on completion would be to the tune of Rs 15, 875.92 million (equivalent to US $185.25 million (@ 1 US$ = Rs 85.70). The recurring cost of the project would be Rs 4770.40 million after completion in four years period.
The project will provide necessary infrastructure and give boost to the mineral sector by exploiting the mineral resources of the country. It will help in achieving self-reliance in the production of copper/gold ingots and some other materials such as Silver, Molybdenum and Sulphuric Acid etc. The project will also help in improving the livelihood of the people of Balochistan by providing direct employment to 917 persons and generating economic activity in the area. The plant and equipment required for the project would be designed and manufactured locally using the expertise and engineering / industrial base available in the country.
The project was considered by the CDWP in its meeting held on 18 March 2010. The CDWP recommended the project for submission to ECNEC at an estimated cost of Rs 8698.70 million including foreign exchange components of Rs 3489.70 million. ECNEC in its meeting held on 21-11-2010 while approving the project on "Quetta Water Supply and Environmental Improvement Project (QWSIP) Revised" also directed that all projects costing over Rupees one billion must have programme audit from firms of repute.
This will be conducted as informal audit every six months and formal audit after every year to ensure: (i) transparency; (ii) timely execution of projects; and (iii) ensure financial propriety. The State Bank of Pakistan (SBP) maintains a list of reputed auditors.
In light of ECNEC directions, the Sponsoring Agency would arrange Program audit of Rekodiq project through reputed audit firms, which are enlisted with the state Bank of Pakistan. The cost of Audit Program will be adjusted within the project cost.