Reko Diq Copper Gold Logistics
A massive ore ship has been constructed by China Shipbuilding Industry Corporation (CSIC) having the capacity to transport 400,000 metric ton deadweight (DWT) roughly equivalent to 6000 railway infrastructure carriages. Sailing under the Hong Kong flag it has a draught of 23m and a fuel bunker allowing it to transport bulk ore cargos upto 25,500 nautical miles without refuelling.When the ore carrier is berthed it does not require an electric generator thereby achieving zero emission at ports. The vessel consumes 18.8 % less energy as it has an an extra tank for liquefied gas as fuel.
Barrick’s Uphill Struggle
Barrick , which has a significant share in the Reko Diq Copper Gold mine, will face an enormous and uphill task to transport the ore out of Pakistan especially as the existing railway infrastructure is in shambles , a typical case of bureaucratic lethargy and neglect. It was estimated in the year 2007 that one km of rail track would incur a cost of PKR 1 million. The gradient of Balochistan is steep and transporting the ore from the mine mouth to Gwadar Port is not feasible both on account of environmental damages and road and trucks wear and tear . Hence the option to upgrade the rail track from the mine to Karachi port. Barrack Gold seems undecided whether to construct a smelter in Balochistan. An ongoing struggle for management control of Korea Zinc, the world’s largest zinc smelter reveals its worth over 5 trillion won ($3.7 billion). This time around Barrick Gold has been rewarded with additional lease areas for prospecting , consequent to Barrick Gold picking up the tab for the arbitration award at ICJ against Pakistan. The fresh agreement is not a public document. The copper ore purification process involves leaching by cyanide gas . Investment of such magnitude warrants due diligence, environmental hearings , tailings and toxicity concerns being addressed to avoid any Bhopal gas leak tragedy which occurred at the Union Carbide India Limited pesticide plant in Bhopal in 1984 when 27 tonnes of methyl isocyanate shattered its concrete casing. After a court deadline the Indian authorities transported hundreds of tonnes of hazardous waste 40 years after the worlds deadliest environmental disaster which took place at a pesticide plant in Bhopal contaminating the groundwater . Around 3,500 people perished in the immediate aftermath of the chemical leak and 25,000 estimated to have died overall. The Indian authorities utilised a dozen trucks to transport 337 tonnes of waste, sealed inside containers, to the disposal site some 225 kilometres away.
The Reko Diq Copper Gold project agreement had two tax treatments the first being a fixed/presumptive tax regime which assures a fixed tax payment without exposing the companies books of accounts. The second tax treatment would be the company making its books available for audit and determination of its real profits. The latter treatment would likely result in tax revenues after 5-6 years of commercial production to accommodate depreciation claims. If the Reko Diq project is granted the status of an Export Processing/Special Economic Zone then the export proceeds or forex would not be realised in Pakistan , except for local municipality levies and salaries. Hopefully the agreement contains clauses for linking the sale of copper, gold and silver with an international basket of metal prices, notably the London Metal Exchange.
Barrick Gold Woes in Africa
Mali issued an arrest warrant for Barrick Gold Chief Executive Mark Bristow a Canadian mining company. The West African country’s military led government is seeking more income from the mining sector to boost revenues on account of a global surge in gold prices . Mali, which is Africa’s largest gold producer demanded around US $ 500 million in unpaid taxes accruing for the 30 years old mining agreement .The CEO and other local officials of the mining giant are accused of money laundering and violating financial regulations .The Malian Ministry of Mines and the Finance Ministry maintain that the mining company had not honored its commitments under an agreement for equitable distribution of mineral resource and exploitation to the benefit of all stakeholders. Both Barrick Gold and the Mali military regime are engaged in negotiations which may culminate in a fresh framework for Barrick’s partnership with a likely increase in Mali’s share of revenues generated from the Loulo-Gounkoto mining complex. In October of 2024 Barrick Gold paid an additional sum of US $ 85 million. In a related development Mali Lithium Limited entered into an agreement to acquire Morila Limited from Barrick Gold Corporation and AngloGold Ashanti Limited for $27.7 million in the year 2020 yet a tax dispute persists arising from a partial assessment from Mali’s tax department claiming that the 80 % owned Société des Mines de Morila SA had understated its income from gold sales in 2017 . The tax department alleged that Morila’s revenue from gold sales in 2017 should have been in the range of US $ 146.9 million as Morila produced 70,000 ounces of gold and sold 67,612 ounces of gold in 2017, for net revenue received of US $ 92.7 million, as disclosed by the mine’s previous owners Barrick and AngloGold Ashanti Ltd., to public exchanges.
Credit : English.gov.cn
Authored by Nadir Mumtaz
Sources/Credit ;
The Korean Herald
https://www.aukevisser.nl/supertankers/bulkers-3/id953.htm
https://www.marinelink.com/news/launches-largest-carrier429682
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