Pak-China’s Project Balochistan: Is It Impossible for Govts To Care for People?

Despite mining projects' location in resource-rich district, its extreme poverty is perhaps, the greatest irony.

Image: Namita Chauhan/The Quint

(This is the final of a two-part series on China's serial overtures in Baluchistan in the name of economic development and the unfolding human rights crisis in the province.)

Imperialism is one of the most used, abused, and misused words ever. But at the end of the day, there's no more fitting word to describe the de-facto Chinese occupation of Balochistan.

Balochistan is Pakistan’s largest province with almost 40 percent of its geographical area and shares borders with Iran and Afghanistan, making it a geopolitically strategic region. Also, it is the poorest of all Pakistani provinces with nearly 75 percent of Balochs living in rural areas and having little to no access to health facilities, schools, clean water, and gas.

• Balochistan is Pakistan’s largest province with almost 40 percent of its geographical area and shares borders with Iran and Afghanistan.

• 75 percent of Balochs living in rural areas and having little to no access to health facilities, schools, clean water, and gas.

• While Sui gas field is operated by a Pakistani company titled 'Pakistan Petroleum Limited', the lion's share of the region's natural resources goes almost to China.

• Saindak Gold and Copper Mine project and extended the lease period for another 15 years to extract metals from the mine.

• Duddar and Saindak, like almost all the mining projects, are not technically part of CPEC, but the content does not change.

Resource-Rich but Baluchistan Reels Under Poverty

Although for example, the Sui gas fields in Dera Bugti, supply more or less 15% of gas in the country, most people in the area have no other option but to burn firewood because they have no gas which, by the way, is in patent violation of Article 52 of the Pakistani Constitution.

But while Sui is operated by a Pakistani company titled 'Pakistan Petroleum Limited', the lion's share of the region's natural resources goes almost to China.

Take the Saindak gold mines. The Saindak copper and gold project is centered in Balochistan’s largest and most resource-rich district Chagai. But the great irony is that with an official population of only about 226,000, it remains one of the poorest districts in Balochistan. If Balochistan is said to be the most underdeveloped province in Pakistan, Chagai is its most undeveloped district.

Underground Activities Rampant in Mine Project

The Saindak Copper-Gold Project started in 1995 and was set up by Saindak Metals Ltd, a Pakistani State-Owned Enterprise(SOE). Then, in 2002, the mines were leased for a 10-year period to Metallurgical Corporation of China Ltd (MCC)— a subsidiary of the China Metallurgical Group Corporation.

According to its website, MCC is “the world’s largest and strongest metallurgical construction contractor and operation service provider, one of the state-recognised major resource enterprises, China’s largest steel structure producer, one of the first 16 central SOEs with real estate development as its major business approved by the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, and the main force for China’s infrastructure construction."

Through a complex mechanism of subsidiaries, China Power Investment Corporation is also involved in extracting coal, copper, and iron ores in the Awaran district of Balochistan. The companies are all Chinese, many of them fully state-owned or with a strong share of the state into them.

Saindak was leased for 10 years in return for a share of the profit. When this lease expired, the government renewed it for another five years. When that expired, it signed off on another five-year renewal a few years ago.

In February 2022, the government approved revised terms of the Saindak Gold and Copper Mine project and extended the lease period for another 15 years to extract metals from the mine without bothering to consult any Balochistan representative.

Pak’s Mine Project Lease Extension & China’s Negligible Reinvestment

According to the mainstream Pakistani press, “the share of the government of Pakistan has been increased by 3% to 53% while the Chinese company has also agreed to enhance rent, royalty and social uplift payments to the federal Balochistan governments.” Meaning: until now, the government of Pakistan got only a 3% share of the handsome profits of the mines, while Balochistan, according to locals, has got less than zero.

While bilateral agreements sailed through, little of the handsome profits were in fact, reinvested into Saindak. The project has a corporate social responsibility component to it in pursuance of the government’s vision to “ensure the contribution of the mining sector to poverty alleviation ... through the empowerment of communities."

Despite this, China did not pay a penny to the provincial government, did not bother to follow up the phantomatic 'social development' projects it was committed to, and, according to local sources, the funds which are submitted at Account #1 of Balochistan’s finance department, do not trickle down to the people living in the vicinity of the project. 

The mines, like all the Chinese-related projects in the region, are surrounded by Pakistani Army posts 'to protect the Chinese interests' while the citizens who swore to protect are taken by death squads specially established for the task. Not only this, locals, including many politicians, talk of several scams perpetuated by Chinese companies with the help of some local families. 

Duddar’s Shadow Falls on Saindak

Apparently, MCC has been over-mining Saindak, extracting far more than originally estimated and far more than officially declared. The overproduction goes to China through Karachi port, unnoticed, with the complicity of a net of supporters from politicians to army people, and nobody really knows how much copper and gold have been extracted from Saindak.

After all, like Duddar, Saindak is enveloped in secrecy. Locals claim that there is “an undeclared ban” on anyone from elsewhere entering Saindak, especially journalists. A story in Dawn’s 2016 edition reported that a Chinese media team from the CCTV channel was not allowed to visit the Saindak project on the pretext that they were travelling without a no-objection certificate. The team returned empty-handed.

By the way: the Baloch people associated with the Saindak project themselves guard the bordering areas for a paltry 10,000 rupees a month. In Saindak, an Export Processing Zone Authority (EPZA) also exists to facilitate investors. This zone is duty-free.

The EPZA is an autonomous body, and the company working on the Saindak project is the seller. It sells minerals to several countries. The EPZA, according to sources, also issues Non-Objection Certificates (NOCs) for mining at Saindak. And, always according to locals, not only do the authorities have no mechanism in place to check the production but the agreements with the Chinese don't even mention the rare-earth elements present in the area. 

These 17 metallic elements, which are used in modern electronic devices, are worth a fortune, but Pakistan, leave alone Balochistan, is not getting a dime for them. Apparently, they go freely straight to China, where there's a big market for them.

According to National Party (BNP-Mengal) President Sardar Akhtar Jan Mengal, after the launching of China-Pakistan Economic Corridor (CPEC)-related projects in the province, a lot of hype and propaganda had launched that the project would change the destiny of Balochistan, but the ground reality was that the people of Gwadar were still without drinking water, electricity, jobs and foreign vessels were exploiting the resources of Balochistan.

Duddar and Saindak, like almost all the mining projects, are not technically part of CPEC, but the content does not change. CPEC has become a case study when it comes to research on neo-imperialism. And Balochistan is the main victim of it.

(Francesca Marino is a journalist and a South Asia expert who has written ‘Apocalypse Pakistan’ with B Natale. Her latest book is ‘Balochistan — Bruised, Battered and Bloodied’. She tweets @francescam63. This is an opinion piece and the views expressed are the author's own. The Quint neither endorses nor is responsible for his reported views.)