The lease for Saindak copper-gold project located in District Chagai, Balochistan is likely to be renewed by the incumbent government.
According to sources the lease between Saindak Metals Limited (SML) and China Metallurgical Construction Corporation (MCC) is expected to be renewed by the government for a period of 15 years. The project was developed for local ore exploration, mining and processing to blister copper. The Federal Government has invested more than Rs 29.234 billion in the project and it has been declared an Export Processing Zone (EPZ) up till October 31, 2022.
The mineral deposit of the project comprises of three orebodies-south, north and east. The present project operations are based on south & north orebodies (SOB &NOB), which are near depletion and development of east orebody (EOB) needs to be undertaken for continuance of the project beyond 2021/2022.
According to the sources close to the matter the terms negotiated for the proposed contract extension are : (i) annual rent(paid to SML)- current value $0.500 million/year – net value & 0.700 million/year, $ 0.500 million/year for LME copper price of $ 6,500/per ton; (ii) SML: MCC profit ratio, current value 50;50, net value, 53: 47; (iii) royalty to Government of Balochistan at current value 5 per cent and at net value 6.5 per cent of sales revenue;(iv) social uplift support to GoB, 5 per cent of net profit at current value and 6.5 per cent of net profit on the basis of net value; (v) funding to GoB for education has been agreed at Rs 10.000 million for scholarships to students of Chagai; and (vi) additional investment by MCC will be up to $ 25 million (paid off by SML) at current value whereas it would be $ 45.472 million on need basis at net value.
ECC has been requested by the Petroleum Division to consider the proposed extension of 15 years.
