Sat, Mar 16, 2019 - Page 9 News List

Pakistani military eyes
key role in giant mine

The military has long dictated Pakistan’s foreign and security policy, but its interest in developing the coveted Reko Diq mine shows it is beginning to see the benefits of controlling business affairs

By Drazen Jorgic  /  Reuters, ISLAMABAD

Illustration: Tania Chou

Pakistan’s military is taking a key role in the development of one of the world’s biggest untapped copper and gold deposits, which is stalled by a multi-billion US dollar legal wrangle with foreign mining firms, multiple sources familiar with the situation said.

The Reko Diq mine has become a test case for Pakistani Prime Minister Imran Khan’s ability to attract serious foreign investment as the nation struggles to stave off an economic crisis that has forced it to seek an IMF bailout.

Ten current and former provincial and federal government officials and mining sources familiar with the project in the Baluchistan region said that the military has become the most important voice on the future of Reko Diq, which it sees as a strategic national asset.

The military would not only be in a position to decide which investors develop the deposit, but an army-controlled engineering firm, Frontier Works Organization (FWO), is positioning itself to be a member of any consortium involved, the people said.

“This has been taken over by GHQ,” a senior Baluchistan official said, referring to the Pakistan army’s General Headquarters in the garrison city of Rawalpindi.

In a statement in response to questions about its role in Reko Diq, the military spokesman’s office said: “[The military] may only participate in government’s plan of development of Reko Diq, as per national requirements.”

However, it acknowledged that FWO, best known for building roads through Pakistan’s rugged and lawless border regions, has developed “substantial” mining capability and would be interested in taking a role in the project.

“If an opportunity arises of participating in developing Reko Diq, FWO may work at par with other competitors [or] companies, provided the project is financially viable [or] suitable,” the statement said.

A spokesman declined to elaborate on the statement.

Pakistani Minister of Information and Broadcasting Fawad Chaudhry said that civilian authorities in the insurgency-hit southwestern province of Baluchistan were in charge of Reko Diq and, along with Khan, would make a decision, but added that the military “and all other stakeholders are obviously important players.”

FWO referred questions to the military spokesman’s office.

Khan’s spokesman, Iftikhar Durrani, said that Baluchistan Province was in charge of Reko Diq, and referred questions to the provincial government and the military spokesman’s office.

The maneuvering behind the project shows how the military, which has historically dictated Pakistan’s security and foreign policy, is leveraging its sway over the civilian government at federal and provincial level to carve a growing role in the nation’s business affairs.

The army has ruled the nuclear-armed nation for nearly half its history and is considered to have a major influence over Khan’s government. A military spokesman declined to comment.

“The military has taken a front seat,” said Ayesha Siddiqa, author of the book Military Inc, which analyses the army’s business interests and influence in Pakistan.

“They’ve understood that the economy is important for having a strong military,” she said. “Control of the economy also gives the military a handle over expanding their business interests.”

Buried at the foot of an extinct volcano near the frontier with Iran and Afghanistan, the mine’s development has long been delayed by a dispute with previous investors in the project, Canada’s Barrick Gold and Chile’s Antofagasta.

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