20 Years of Saindak

Political interests that came into play during the post-Musharraf period did cause some damage to the mining project

QUETTA: The MCC Resources Development Co Ltd (MRDL), a Chinese company working on the famous Saindak copper-cum-gold project, has completed twenty years of its operations.

The occasion was marked by a celebratory gathering held at the site of the project last week, where medals and certificates were awarded to 44 outstanding employees of the project, including cooks, drivers, managers and engineers.

Given the performance of the company, Pakistan has extended its lease of the mines for another 15 years.

The gathering was attended by the MRDL Chairman, He Xuping, President Zhang Zhijun, and the company’s local management including Senior Vice-President Mohammad Nawaz Khan, Vice President Humayun Mehmood, and Managing Director of Saindak Metals Ltd (SML), Mohammad Raziq Sanjrani.

Officials of the district administration, military officials deployed in the region, and tribal elders of the area were also present.

While addressing the gathering, He Xuping said that the project’s achievements were made possible by “the resolute care and backing of both the Chinese and Pakistani governments, as well as extensive support from the society, including critical support for the security of Chinese personnel and of the project itself against the threats from miscreants.”

Presenting production figures, Mr Xuping said that during the last two decades, the company had mined 278.9407 million tons of rock, including 84.9 tons of ore to produce and export 278.8 thousand tons of blister copper.

These exports earned Pakistan 2557 million US dollars in foreign exchange. In addition, the company contributed $520 million in tax revenue and $20 million in social welfare outlays besides providing training to 3,000 Pakistanis in non-ferrous industrial technology.

Presently the company employs 300 Chinese and 1,870 Pakistani engineers, technicians and non-technical staff on the project. It was initially given the mining lease for ten years (2002-2012) which was later extended by two five-year terms until 2022. The lease has now been extended by another 15 years, until 2037.

Project history

Saindak mines are located near the border town of Taftan, some 700 kilometers southwest of Quetta, in an area where there is no road infrastructure, no industry and the weather is often hostile.

The hidden ‘gold’ in Saindak, which in Balochi language means black dry mud, was first forecast by British geological surveyors in 1906. The existence of copper and gold deposits there was established by the Geological Survey of Pakistan in 1975-76.

For 13 years between 1976-89, no international companies responded to Pakistani invitations to set up a mining project, until the Chinese firm, Metallurgical Construction Co (MCC) came forward and agreed to start a project on turnkey basis.

MCC started construction on the site in 1990, amid a forecast that it will extract an estimated 1,800 tons of blister copper annually. Over the next five years, 1,500 tons of blister copper was produced on trial basis.

After the successful operation of mining, the project was handed over to the government of Pakistan, but none of the governments that followed during what is called the decade of democracy could make it functional for various reasons, including political instability.

Then came the military regime of Gen Pervez Musharraf, which floated a tender for the project in 2002, and awarded it to MCC despite the fact that its bid was the second lowest. The company conducted a complete overhauling of the machinery and revived it.

Political interests that came into play during the post-Musharraf period did cause some damage to the project’s supervision by the Pakistani authorities.

It was put under the supervision of the Saindak Metal Ltd (SML), a subsidiary of the Ministry of Petroleum. The SML’s managing director, Razik Sanjrani, who is the brother of the current Senate Chairman, Sadiq Sanjrani, was appointed purely on political grounds, bypassing all rules and regulations.

Razik, who draws over two million rupees in monthly salary besides other perks and privileges, does not even have a masters degree in the relevant field, and is just in his mid-30s although, as per the company rules, a managing director must have 20 to 30 years’ experience in mining and management.

He also faces charges of corruption and misuse of power by getting as many as 150 people recruited against 50 jobs available to run a small SML office in Quetta. In addition, he is also accused of having awarded contracts worth millions in Saindak project to his favourites.

Balochistan’s share

Until 2010, Balochistan was not getting much from Saindak’s net profits except 2% royalty on the export value of its products. At the time, both the federal government and the Chinese company were receiving 50% each from profits.

After the 7th National Finance Commission Award in 2010, the federal government began to transfer 30% of its share of the profit to Balochistan. Besides, the royalty of Balochistan was increased from 2% to 5%, while another 5% was earmarked to meet requirements of the corporate social responsibility (CSR).

“Until 2017, the Balochistan government was being paid Rs 6.6 billion under the head of royalty. Following a court order, the MRDL started contributing Rs 10 million annually to Balochistan Education Endowment Fund for awarding scholarship to bright students of the province,” Hamayun Maulvi, the head of MRDL office in Quetta, told Bol News.

“The company also provides free electricity and clean drinking water to between 18,000-20,000 people of the nearby villages”, he said. He said free clinical facilities are provided to local people in a 50-bed hospital established withing the project area, while a high school having 550 students has been set up where free education is provided along with books and stationary.

Meanwhile, the security of the project area and that of the Chinese nationals during their movement outside the project area has been assigned to Frontier Corps Balochistan.

After the August 2018 suicide attempt on a bus carrying Chinese engineers in Dalbandeen area, an airplane landing/takeoff strip has been constructed about six kilometers from the project site for the Chinese nationals traveling to or from Karachi’s international airport.

Previously, they had to drive 200 kilometers to Dalbandeen airport to catch a flight to Karachi or elsewhere.