Metallurgical Corporation of China (MCC) demanded subsidies from the government of Pakistan on the Saindak Copper and Gold Project due to low metal prices in the country. However, after discussions, the Chinese firm has now agreed to work on the existing royalty rates and other clauses that were determined in the lease agreement for the next five years.
MCC had demanded that it should be provided subsidies on the royalty payment and the rent of the project should also be waived in order to ensure that the project remains economical.
The Saindak project, from its infancy, was a Federal government project that was managed by MCC. The project involves production of Copper from the ores found in the mines. The project was leased out for 10 years to MCC in 2002 after which the Federal government transferred it to the provincial government under the Aghaz-e-Haqooq-e-Baluchistan package.
Provincial government then increased the leased period to October 2017 which was now about to end before MCC agreed to work for another 5 years on the same terms and conditions.
The project has utmost importance for the people of Baluchistan as it is improving the province’s socio-economic conditions. Not only is the project helpful for the people of Baluchistan, but is also important for the provincial and federal government for its significant revenue contribution to the economy.
Revenue earned from the project is divided half and half between Pakistan and China. Baluchistan gets 5% of the revenue that is received by the Pakistani government. Minerals found from the project have been divided into three ore bodies i.e. North, South, and East. Minerals from the south ore have been utilized and thus new explorations need to be done in order to ensure the discovery of other ore mines.