Balochistan gold rush promises Pakistan mining boom
Announced in the company of Pakistan's Prime Minister Shehbaz Sharif and Army Chief General Muhammad Asim Munir, Tabba's claimed discovery signals a potential turning point for Pakistan's laggard mining industry at a time global gold prices are touching record highs of over US$3,400 per ounce.
NRL, a wholly Pakistani-owned firm under the umbrella of Fatima Fertilizer, Liberty Mills, and Lucky Cement, obtained an exploration permit in Chagai in October 2023. Within 18 months, it claims to have pinpointed 16 mineral-rich locations across a 500-square-kilometer expanse, with drilling at the Tang Kor, Chagai site reportedly confirming significant deposits.
Balochistan, Pakistan's largest province by area, is a geological treasure trove. The Chagai region lies within the Tethyan Magmatic Arc, a mineral-laden zone spanning Europe to Southeast Asia renowned for its copper and gold wealth.
The nearby Reko Diq mine holds an estimated 5.9 billion tonnes of ore, grading 0.41% copper and 0.22 grams per tonne of gold, ranking it among the world's largest untapped reserves.
NRL's Tang Kor website entry complements this, with early drilling showing copper concentrations from 0.23% to 0.48%, along with traces of gold and silver. Thirteen diamond drill holes totaling 3,517 meters all reportedly struck mineralized zones, underscoring the deposit's vast potential.
Pakistan faces a dire economic situation with shrinking foreign currency reserves, mounting debt and import dependency, making this discovery a potential lifeline. The nation's mineral wealth, valued at $6 trillion, has been largely untapped.
NRL's find, alongside developments like Reko Diq (where Barrick Gold targets 200,000 tonnes of copper and 250,000 ounces of gold yearly by 2028), could pump billions into Pakistan's economy and Balochistan's development.
At the same time, the golden discovery is sparking age-old concerns about fair revenue allocation for and ecological impact on Balochistan, one of Pakistan's most undeveloped and historically restive regions.
Ethnic Baloch insurgent groups frequently target resource and infrastructure investments in the province, in part on the grounds that they disproportionately serve Islamabad and its allied foreign interests, including Chinese companies, rather than local communities.
NRL's partnerships with the Balochistan government and the Special Investment Facilitation Council (SIFC), plus a $100 million exploration budget for two new licenses, thus reflect a determined effort to capitalize on this opportunity.
Balochistan's resource riches stand in stark contrast to its poverty. Supplying 35–45% of Pakistan's natural gas and brimming with minerals, the province still ranks lowest on basic human development metrics. Around 85% of the province's residents lack clean water, 75% have no electricity and 63% live in poverty.
However, these newly discovered troves could shift Balochistan's dire narrative if handled prudently and equitably. The company's stated commitment to creating local jobs and community engagement aims, at least rhetorically, to help address these gaps.
There is precedent to be doubtful about corporate vows of trickle-down. For instance, the Saindak mine, active since the 1970s, yields 15,800 tonnes of copper, 1.5 tonnes of gold and 2.8 tonnes of silver annually, yet benefits rarely reach locals.
The economic potential is immense. Reko Diq could generate $70 billion in free cash flow and $90 billion in operating cash flow over decades, according to company estimates. Should NRL's deposits match this scale, their extraction could elevate GDP, create substantial well-paying jobs and fund badly needed Balochistan infrastructure.
A homegrown player like NRL could keep more profits in-country, unlike past foreign-led ventures. Its agreements with the Oil and Gas Development Company (OGDC) and efforts to draw investors point to a scalable strategy.
Yet, optimism must be tempered. Past projects like Saindak and Reko Diq have faced disputes over revenue splits and local neglect, with Balochistan once receiving just 2% of Saindak's earnings.
For NRL's success, fair policies—guaranteeing royalties, local employment and investments in health, education and water—are essential. Frameworks like the Balochistan Development Plan and the China-Pakistan Economic Corridor (CPEC) Gwadar Port offer a blueprint but fair implementation will be critical.
The economic upside, of course, comes with environmental trade-offs. Balochistan's climate, with summers hitting 53°C and winters plunging to -20°C in higher elevations, is as harsh as it is fragile. Mining demands substantial water and energy, both scarce resources in Balochistan.
Saindak has faced backlash for depleting water and polluting groundwater with tailings and residues. Tang Kor's drilling and potential processing could worsen these problems, especially if NRL opts for downstream operations that could pollute rivers, hurt crops and aggravate health crises.
Extracting copper and gold generates significant emissions—mining contributes 4–7% of global greenhouse gases, with copper production emitting roughly 2.5 tonnes of CO2 per tonne.
At Reko Diq's scale, NRL's output could add hundreds of thousands of tonnes of emissions yearly, straining a region already hit by climate shifts like erratic rains and desertification. Dust from mining could also harm air quality and public health.
Balochistan's climate is already under siege, and mining could amplify the woes. The province has seen a rise in extreme weather—floods in 2022 devastated crops and displaced thousands, while prolonged droughts have shrunk arable land. Chagai's arid ecosystem, home to sparse vegetation and rare species like the Balochistan bear, faces disruption from mining sprawl.
Water-intensive operations risk drying up springs and wells, vital for nomadic herders and small farmers. Meanwhile, heavy machinery and blasting could destabilize the region's rugged terrain, increasing landslide risks in a province prone to seismic activity.
Without careful and studied planning, NRL's projects could tip Balochistan's delicate environmental balance toward collapse.
On the flip side, copper is vital for green tech like wind turbines and electric vehicles, potentially aiding global decarbonization. NRL's local control could enforce tougher environmental rules than foreign firms have historically followed.
Solar energy or water recycling, used in some advanced mines, might mitigate the damage. The $100 million exploration fund could be deployed to support sustainability research, balancing profit with preservation. If NRL invests even a minor share donation into Balochistan's Climate Resilience Fund, it could build trust and social license among Chaghi's indigenous communities.
NRL's Chagai find is a potential defining moment for Pakistan and Balochistan, but a positive and equitable outcome depends on learning from the past. The discovery could ease import reliance, shore up foreign currency reserves and lift Balochistan from poverty if substantial profits stay local.
The 2025 Pakistan Minerals Investment Forum, where global eyes were suddenly fixed on Chagai, highlights the stakes. Saudi Arabia's possible 15% Reko Diq stake and Barrick's $2 billion investment suggest Pakistan's mineral wealth is prime for profitable extraction.
Ultimately, NRL's gold and copper reserves are more than a geological windfall – they are crucial for Pakistan's pursuit of equitable and lasting economic progress.
For Balochistan, the discovery could herald a future where riches benefit its people and environment, not just local elites or outsiders. The task ahead for Pakistan and Balochistan is to ensure this hope doesn't fade into another tale of squandered promise.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AllAfrica
5 hours ago
- AllAfrica
Scott Bessent's got a Japanese blind spot
TOKYO – Fresh off getting outmaneuvered by Tokyo on a 'trade deal,' President Donald Trump's team is going even further to demonstrate its ignorance of the state of play in Japan. Case in point: US Treasury Secretary Scott Bessent complaining that the Bank of Japan isn't hiking interest rates fast enough, when his boss is the reason officials can't tighten policy. As Bessent told Bloomberg this week: 'They're behind the curve. So they're going to be hiking and they need to get their inflation problem under control.' Sure, just as soon as Bessent gets Trumponomics under control. Does Bessent not understand that four months ago, BOJ Governor Kazuo Ueda was on track to get Japanese rates the furthest away from zero they've been in 26 years, only to get derailed by Trump's tariffs? To be sure, it's hard to know what the global face of the Trump 2.0 economy really believes and what he must say on television to keep his job. And it's painfully obvious what Bessent is up to here: trying to weaken the dollar via Japanese monetary policy as Federal Reserve Chair Jerome Powell slow-walks US rate cuts. Fair enough, but such comments are inspiring more eye-rolling in Asia than intellectual debate about BOJ policies. In Tokyo, in fact, the BOJ has become a backburner issue. With Japan expected to grow just 0.7% in the current fiscal year and inflation pressures easing, the odds of the BOJ raising rates at its September 18-19 or October 29-30 meetings have dwindled to the point that economists have pivoted to other topics. Yes, inflation is still way too high in Japan. But news that Japanese wholesale prices rose just 2.6% in July year on year suggests that the urgency for raising rates is diminishing. Perhaps Bessent has missed, too, that the Nikkei 225 Stock Average, on the same day he spoke to Bloomberg, rallied to an all-time record. The reason: delight over a US-Japan tariff deal that, in the end, demanded little of Tokyo. While a 15% Trump tax on Japanese goods is no one's idea of fun, it's a world away from the 35% the White House threatened. Japanese automakers are sure happy to be paying, in theory, a lower rate than the 25% Detroit must pay on imports from plants and suppliers in Canada and Mexico. To be sure, much of this is still shrouded in confusion as Trump gets an earful from unhappy US automakers. As Matt Blunt, president of The American Automotive Policy Council, puts it, 'any deal that charges a lower tariff for Japanese imports with virtually no US content than the tariff imposed on North American-built vehicles with high US content is a bad deal for US industry and US auto workers.' For automakers, there's a bit of a deja-vu-all-over-again dynamic here. As Blunt explains, the trade framework Trump negotiated with the UK did more to lower tariffs to 10% on some luxury cars built in England, such as the Rolls-Royce, Bentleys, Land Rovers, Jaguars and Aston Martins, than aid Detroit. The risk of Trump World reneging has the team of Japan's top tariff negotiator Ryosei Akazawa anxious. There's also been controversy over a practice called 'stacking,' whereby one 15% tariff is piled atop existing tariffs. After considerable back and forth, Japan claims Team Trump has agreed not to stack tariffs. For now, at least. All this is the product of a hastily assembled tariff deal with no written materials. The bottom line is that 'without a written agreement between Japan and the US, no promise or claim of mutual understanding is secure until it appears in an Executive Order,' says Richard Katz, who publishes the Japan Economy Watch newsletter. Lawmakers are deeply worried, too, that Trump could simply have a bad day and decide the US and Japan should negotiate a new, new tariff arrangement with its closest ally in Asia. 'Washington is just randomly shooting, and they are shooting some like-minded countries from behind,' says Taro Kono, a member of Japan's House of Representatives, who's often mentioned as a future prime minister. And that US$550 billion that Japan is expected to invest in the US at Trump's direction? What Trump calls a 'signing bonus' to be handed over to the White House – it's'our money,' as he said – Tokyo views as more of an aspirational endeavor with a vague timeline, perhaps over a number of years. Rather than forking over a pile of cash, Japanese Prime Minister Shigeru Ishiba's team is eyeing a series of loans, grants and financial guarantees run through government-linked organizations like the Japan Bank for International Cooperation and Nippon Export and Investment Insurance. Suffice to say, the logistics of this are going to take lots of back and forth and loads of additional negotiation sessions. In the meantime, Ishiba's inner circle hopes the US courts will rule Trump's tariffs are unconstitutional, enabling Japan to avoid this whole mess. Also, Tokyo will watch closely to see how South Korea proceeds with the $350 billion it agreed to deploy in the US and what the European Union does about the $600 billion worth of US energy purchases Trump is demanding as part of its deal. None of these really matters in the end if Trump and Bessent don't get China to the table. Trump World's stuck-in-1985 policy mix has missed that in our globalized era, where supply chains matter more than national borders, bilateral trade deals mean less than multilateral ones. That is, unless Trump manages to get one with China's nearly $18 trillion economy. Combined, the US and China represent $45.5 trillion of gross domestic product (GDP). As tariff pain weighs on the US economy, Trump's challenge is to convince his base that the inflation, market chaos and extreme uncertainty of the last several months were somehow worth it. The only way, really, is a big, beautiful China trade deal that Trump can tout as proof he's still got some 'art of the deal' game left. Xi is playing hard to get, though, scoring another 90-day extension on talks. As Xi's China complicates the US Treasury's 2025, Bessent is having to do some Japan maintenance. One avenue is prodding the BOJ to raise rates in lieu of its inability to cajole the US Fed to lower them. Another: soothing nerves in Tokyo about its $1.1 trillion exposure to Trumponomics. Japan is by far the biggest holder of US Treasury securities. That's a rough place to be when Trump is working to morph the Fed into the People's Bank of China by stripping it of its independence. Trump, of course, has threatened to fire Powell for not bowing to his demand for big rate cuts. Bessent, commenting on how much Fed easing he wants, argues that 'we should probably be 150, 175 basis points lower' from the current 4.25% to 4.5% target range. If the Fed is perceived as becoming an extension of Trump's West Wing, the dollar would drop for all the wrong reasons. And Trump's assumption that the Fed slashing rates at his behest would lower borrowing costs might not end well. It's very likely that Powell cutting rates sharply in a cloud of Trumpian suspicion would result in long-term yields surging. Already, the US is spending more on interest payments on the national debt each year than on the American military. Tokyo worries deeply about the prospect of sustaining hundreds of billions of dollars of losses if Trump crashes the US government debt market. But then Tokyo has also had to fend off an avalanche of misinformation from Trump World. Trump claims, for example, that Tokyo's non-tariff barriers keep Japanese from buying US cars. The real reason is that Japan makes high-quality, fuel-efficient cars geared for narrow Japanese streets and claustrophobic parking spaces, while oversized American vehicles often lack practicality on Japan's roadways. And here's Bessent adding to the mountain of misconceptions as he argues that volatility in Japan is putting US Treasuries at risk. 'There's definitely leakage from — the Japanese have an inflation problem,' he says. Bessent added that he's spoken with BOJ head Ueda recently, noting: 'My opinion, not his — they're behind the curve. So they're going to be hiking.' Not exactly. Certainly not until Bessent finds the courage to counsel Trump against the forever trade wars he seems to be launching in real time. Thanks to the collateral damage from the tariffs, the odds are rising that the BOJ's next move will be to cut rates as GDP takes hits, not raise them. Follow William Pesek on X at @WilliamPesek
South China Morning Post
5 hours ago
- South China Morning Post
PC maker Lenovo reports record quarterly revenue despite the ‘challenges' of US tariffs
Lenovo Group said its first quarter revenue reached a record high despite ongoing challenges from US tariff policies, as the world's largest personal computer (PC) maker pushes for the use of AI in both its consumer and enterprise products. Revenue for the three months ended June rose 22 per cent year on year to US$18.8 billion – a record high for a first quarter – while profits advanced by the same percentage to US$389 million, the company said on Thursday. Lenovo recorded double-digit year-on-year revenue growth across all of its main businesses partly due to the 'resilience and flexibility' of its supply chain, which allowed it to 'overcome challenges brought by tariff volatility and the geopolitical landscape', chairman and CEO Yang Yuanqing said. Yang said in May that US President Donald Trump's move to raise tariffs on Chinese goods had initially caught the company off guard and weighed heavily on the previous quarter. But the company had more than 30 manufacturing facilities in 11 markets globally, senior vice-president and chief financial officer Winston Cheng said in a media briefing on Thursday. Lenovo laptops are displayed at a Best Buy store in San Rafael, California, June 7, 2024. Diversified manufacturing locations allowed it to deliver products locally and gave it 'a lot of advantage', although Lenovo was 'worried about uncertainties and quick changes', Yang had said in May.
South China Morning Post
6 hours ago
- South China Morning Post
Four reasons Trump has pushed his luck on tariffs too far
A seductive narrative has taken hold in financial markets since US President Donald Trump launched his assault on the global trading system in early April. Despite an average effective tariff rate that, according to the Yale Budget Lab, has surged to 18.6 per cent – up from 2.4 per cent in early January and the highest since 1933 – many investors and economists believe the global economy has averted a trade shock. Advertisement Even the International Monetary Fund upgraded its global growth forecasts last month because of signs Trump's tariff blitz will cause less damage than initially feared. The results of Bank of America's latest Global Fund Manager Survey on August 10 showed investors were the most bullish since February, with only 5 per cent of respondents expecting a 'hard landing' for the global economy, compared with 49 per cent in April. The case for optimism has a lot to do with the avoidance of a full-blown recession and collapse in asset prices, a scenario that looked likely to materialise after Trump unveiled his ' Liberation Day ' tariffs on April 2. Since then, several factors have helped allay concerns. Only a few countries, including China , dared to hit back at the United States, sparing the world an all-out trade war. When push came to shove, Trump opted for partial climbdowns, preferring to extract concessions from countries and extend deadlines for the imposition of tariffs, as he did with China on August 11 America's trading partners have promised to invest vast sums in the US, while revenues from customs duties have reached record highs. Moreover, the US economy is holding up relatively well. Inflation remains contained, unemployment is low, corporate earnings are strong and there is little evidence so far that US consumers are shouldering the cost of the tariffs. Advertisement Four months after Trump launched his trade offensive, dire prophecies of stagflation or recession have not come true. This is partly why the benchmark S&P 500 equity index currently stands at a record high. Yet it also helps explain why Trump feels emboldened to press ahead with higher tariffs . Investors have been doing Trump's bidding by driving up asset prices.
