Everything around here is mine

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Map of Balochistan

Source: Small & Medium Enterprise Development Association

It’s official: nearly 80 per cent of all minerals produced in Pakistan come from Balochistan, according to the latest data compiled by the Geological Survey of Pakistan. What is less known is that the province’s mineral potential is much bigger than the current production statistics suggest. While this gap between the potential and actual production is generally blamed on the absence of security, insiders say successive governments have done nothing to build the technical capacity of the mining sector and political meddling has checked the development of mining as a possible engine of growth for the provincial economy.

Only 22 people, out of Balochistan Mines and Mineral Development Department’s total strength of 560, work with its directorate general for mines and minerals — the section that deals with the technical aspects of exploration and licensing. Requesting not to be named, a former director general of the department revealed that such capacity deficiency coupled with political interference is the most important factor in the minimal development of the mineral sector in the province. The myopic provincial political leaders see the sector merely as an avenue for employing their favourites and issuing mining leases to relatives and cronies, he alleges. The other short-sighted provincial policy is to keep mining royalties to the minimum, which is to the disadvantage of the provincial exchequer, he explains. “The department [which should have ensured] mining’s growth is [indeed] severely hampered by such political interference,” he says.

The former official’s disclosures cannot be dismissed as the raving and ranting of a possibly disgruntled retired bureaucrat. A review of the National Mineral Policy 2002, jointly done by the World Bank and the federal Ministry of Petroleum and Natural Resources, confirms what he says. The review report discovered that the development of Pakistan’s mineral resources in 2003 was limited to quarries (open pits), producing only precious stones, limestone, rock salt gypsum and modest amount of coal, mostly from Balochistan. Since then, there has been hardly any change. For instance, the report pointed out thatPakistanexported gems worth 2.2 million US dollars in 2001; this registered a meagre increase of 1.4 US million dollars to reach 3.63 million US dollars in 2010. During the same period,India’s gem export earnings shot up from 4.9 billion US dollars in 2001 to a whopping 33.5 billion US dollars in 2010.

In what can be seen as evidences of inefficient work culture and overweening political interference, the workers of the Balochistan Mines and Mineral Development Department were waging daily protests in the second week of the last month against the appointment of a pharmacist and a primary teacher on technical posts that they were not qualified for. An inside source tells the Herald that political interference has crippled the department’s working. To quote an example of such interference, he alleges that successive ministers for mines and minerals have been interfering in the issuing of licences for prospecting, exploration and mining even when they do not have the authority to do so. The ministers do this, the source says, by blocking elevation of eligible senior officers as members of the department’s mines committee which, under the rules, is the sole authority to grant or refuse licences and leases.

One of these officers, Dr Saeed Baloch, has been eligible for promotion for the last six years to the post of the department’s director general, a position that will automatically make him the head of the mines committee. The other officer is Zarbat Khan who could have become a director of the department two years ago, and thereby a member of the committee, but has not. Taking advantage of the undefined rules to govern the working of the department, the ministers appoint their favourites but theoretically ineligible and junior officers to these posts and thereby influence the process of issuing licences and leases, the source adds.

Siddiq Raisani, the owner of several mining companies, goes a step further in blaming the politicians. It is not just the minister for mines and minerals who is involved in subverting the rules for issuing licences, he alleges, and adds that half of Balochistan’s cabinet is doing the same thing because many provincial ministers either have shares in mining companies or own them fully.

In Balochistan’s provincial capital Quetta, stories about ministers and senior government officials owning mining companies through their frontmen are rife even when it is almost impossible to find the paper trail linking a particular minister or official to a particular company. As of now, nearly 400 individuals and companies hold prospecting licenses for 32 minerals in the province and cabinet ministers and government functionaries have stakes in many of these companies through proxies, says the government source.

The provincial government officials that were willing to speak on the matter say there is no way to stop people from forming and running mining companies on the allegation that they enjoy political backing. The law does not bar even ministers and serving government officials from owning mining companies, they add.

But the Herald’s source in the mining department claims that the politically connected companies always get a better deal. “The ministers not only manage to get new prospecting licences and fresh mining leases for thousands of acres of lands [for the companies they support and sponsor], they also have their men sitting in the mines committee who transfer existing leases, without informing the original lease holders, to the [ministers’ favoured firms],” he says.

A December 2010 ruling of the Balochistan High Court verifies this. In 2007, Pakistan Petroleum Limited (PPL) received a prospecting licence for iron ore for 2,006.12 acres of land in Pachin Koh, in Chagai district’s Nokundi area. Subsequently, the mines committee issued a mining lease to PPL that came into effect from January 2007 and was valid for the next 20 years. OnJune 7, 2010, the mines committee issued a show-cause notice to PPL, telling it that its lease area could be reduced because it had kept the site underutilised for a long time. Though the committee gave the PPL 30 days to file a reply, it allotted 929.75 acres of the land under the company’s lease to another firm, M/s Shahnawaz Pumice, before the expiry of that period. The PPL lodged an appeal against this before the secretary of the Mines and Minerals Development Department. When he did not take any decision, PPL filed a petition at the Balochistan High Court which set aside the orders of the mines committee and observed: “It was expected that [the secretary], with whom the petitioner (PPL) had filed the appeal along with a stay application, would have acted in this case of blatant violation of the rules … but instead [the secretary] virtually sat on the appeal.”

A source claims that it is only on paper that M/s Shahnawaz Pumice is owned by one Shahnawaz, a poor man from Chagai. He was made the owner of the company because the Balochistan Mineral Rules 2002 require that a company applying for and getting a prospecting licence in a district must have a local person as a shareholder. The firm is actually formed and run by one Shabbir Mengal who is publicly known in Quetta as a frontman for several ministers of the Balochistan cabinet, the source says.

In a clear acknowledgement of unwarranted interference in mining affairs, the World Bank review report recommended eliminating discretionary ministerial and official powers from the process of granting or refusing mining licences and leases. Instead, those powers appear to have become even stronger.

Another major consequence of the provincial ministers’ blatant involvement in mineral affairs is that Balochistan has registered hardly any increase in its royalty receipts from minerals over the last many years. Since most current cabinet members have also been a part of the provincial cabinets in successive previous governments, they are reported to have ensured that royalties remain low. For instance, in 2010, the provincial mines and mineral department suggested imposing a royalty of 170 rupees on every tonne of coal mined in the province but the provincial cabinet approved only 70 rupees a tonne as royalty, officials reveal.

Balochistan Chief Secretary Ahmed Bukhsh Lehri, however, denies that this is an issue. He says that until recently the provincial government was actually spending from its own kitty to encourage coal mining in Balochistan. “The coal miners were receiving subsidy rather than paying any royalty,” he explains. So, any money coming in as royalty, no matter how small, is an improvement.

16 thoughts on “Everything around here is mine

    • Well said!

      Tribal leaders of Balochistan are the ones who are robbing poor Balochs.
      As far as resources being taken by the central government, this order has been there since the British colonial times. Even today Indian central government has the power over mineral resources of its states and no one whines over that in India.

      • Problem of Balochistan is migrant who control the wealth of Balochis , migrants are holding their bureaucracy and their natural resources in the name of federation, except few city areas, no gas pipelines in remote balochi areas, where, hundreds of miles away in Punjab gas is given to every village and industry. Most of us talk of feudal, in Sindh and Balochistan, I wonder why there is no talks of feudal in Punjab. Our Honourable Chief Justice was employed on fake domicile of Balochistan, there is no talk. of this matter.

  1. I am working for United Nations in a post conflict African country. This country’s fortune is unfortunately its mineral wealth. Being originally from the sub-continent, I can make the comparisons with Balochistan and they are frankly frightening. The environment of your country coupled with the political and regional flux; in amalgamation with the governance deficiencies and foreign influence on your polity; makes it a ripe recipe for disaster.
    Sometimes its really amazing to see the situation in your country sliding into the obvious. Anybody with a working knowledge of contemporary history can assert the obvious; unfortunately the vivid prediction is chaos and ultimately dismemberment.
    Its a looming reality that the rushing waters are heading towards a steep fall. Cant you see it, as even the blind can hear the sounds of the rushing waters. The US resolution on Balochistan and your neighbour’s (from all directions, inter and intra region) subversive designs should be a wake up call for all your sympathesizers, both domestic and foreign. Ignore this and otherwise its a predictable walk down the road to the doom for your country. Time for you to wake up and tackle the situation with genuine ideas and pragmatic plans. Their are no short cuts for long term failures, but every journey starts with a first step.

  2. Baloch people should get the maximum profit of there resources as the province that gives greater input to the country revenue gets a greater share of the profit. But the problem with Balochistan is the same as with other provinces, the benefits never trickled down to masses and held by feudals.

  3. As a mining company working in Chagai, we pay bribes amounting to about a million rupees a month to retain our lease despite the fact that the courts ruled in our favor. This money could easily go to the province if it protected the sanctity of its own laws while raising raising royalties.

  4. All the blame goes to the people of Baluchistan since they kept bowing before these feudal lords. But I think now it is too late to fix this problem at least in Baluchistan. Some World Powers are trying break Pakistan by making Baluchistan an independent Country. I thought about it a lot. At first my heart cried since I can’t see another breakup of Pakistan. Then I said maybe it is better for the people of Baluchistan. Maybe those multinational companies who will eventually benefit with this split will give some share to the local people of Baluchistan. At least they wont treat them as bad as these feudal have. Maybe it is good for Baluchistan.

  5. Is there any agency like FBI in Pakistan that goes after mafias and corruption with ferocity. Why don’t we realize that vicious enemy lies within among us and not outside our borders. I’m tired of hearing about balochistans mineral resources. History has Proven that there is no bigger resource than human resource and that is why Punjab is and will remain the wealthiest province. We need to help the rest of Pakistan develop their human resource and that is how we will have an educated debate and a way forward. We cant be locked by these myths that if we start sighing the earth we will find the treasures that we seek. Human brain is and will always be the biggest treasure and gift from Allah.

  6. Shame on Pakistan for treating Balochistan like an illegitimate child and shame on these Nawabs/Sardars for treating the people of balochistan like illegitimate children

  7. There are four streams of India’s economy where state controls still persist. These are, radio spectrum, mining leases, real estate, and education.

    The radio spectrum scam (the infamous 2G scam) has been exposed and is in the process of being cleaned up. The government has also decided that mining rights will henceforth be transparently auctioned. Real estate is a state (provincial) subject, and politicians continue to milch this through controls on “Change of Land Use” (CLU).

    Education through government operated institutions has failed, but the govt still insists that privately funded schools & higher learning institutes be “not for profit”. In reality, these are all for profit, but because of silly laws, the profits are sponged off indirectly.

    Pakistan could also adopt transparent auctions for its substantial mineral resources, but I guess before that the feudal mentality has to be abolished. India did it way back when Nehru abolished “zamindari”.

  8. It is not only the Fuedals. Why just bring the Fuedals only. It is the Pakistan Armed Forces’ direct involvment into every business and take away the booty and let the poor to wait for maseeha to come and help.

  9. some foreign communities believe that wheresoever resources are available even across their own geographical boarders they have the same right to get the share from them like the local ones which is primarily baseless.As law of justice demands that every citizens of its respective region has some perks and privileges over the rest of the communities as per set norms of each country.

  10. As far as natural resources are concerned, there are various factors involved in this field including lack of technical know how, speciality in the particular field, mal-practices in awarding and granting licences, corruption in the high ups of the government functioneries and un-educated leadership. More than 10,000 billions have been looted by allocating of funds to the elected representatives from 1988 till date and this practice will go on in future, if they are not accounted for these funds in the name of development.

  11. If u carefully read the above paras, you wil definitely admit that the evil lies among ourselves.
    . Outsiders will keep standing at the gate untill the door is unlocked from inside.

    • I totally agree with this fact which was also pointed out long back by Gen. Musharraf that we have greater threat from inside than outside Pakistan. If law makers become law breakers, who would implement the law. This is the weakness that has led to its exploitation to the extend that US is discussing passing a resolution on Pakistan’s soil. Alas! even now, the government is unmoved. May Allah save our beloved country and destroy all those who look at it with an evil eye. Amen.

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