Chinese Mining Companies Make Inroads Into Gilgit's Mineral-rich Region29 June 2011
The Economic Times
Washington DC: At a time when the distance between American and Pakistani priorities in the post-Osama period continues to grow, China is passionately vouching for Pakistan's entry into the Shanghai Cooperation Organization (SCO), which is seen as the upcoming Asian NATO . For some time now, China and Pakistan have aspired to create a regional alliance comprising the Arab countries, Central Asian Republics, Iran, Afghanistan and Turkey, and SCO could most likely help that dream come true. But there is more to it than meets the eye. The lynchpin connecting these countries will be Gilgit Baltistan, a disputed region rivaling Serbia in area. Although constitutionally a part of India and bordering China's Xinjiang province, Afghanistan and Tajikistan, Gilgit Baltistan remains in Pakistani control since 1947. The political uncertainty owing to India's claim to the region is especially worrisome for China, which currently depends on her southern neighbour for two reasons. Firstly, China uses transit routes of Gilgit Baltistan to reach Pakistan, Iran, Afghanistan and the ports along the coastline of Arabian Sea; and secondly, Chinese mining companies control the region's much valued mineral deposits of uranium, gold, copper, marble and precious stones. However the locals continue to resist China's ambitions. In 2008, for instance, a local person was killed when the residents of uranium-rich Gindai valley in Ghizer district clashed with Chinese miners. A Pakistani company called Mohmand Minerals met the same fate in 2010 in Nasirabad valley of Hunza district where the infamous Babajan Hunzai of Progressive Youth Front spearheads the resistance against Pakistani and Chinese expansionism. Today, more than a 100 local right defenders are locked up in Pakistani jails and face sedition charges for denying space to the Chinese and Pakistani mining companies in their valleys. But the person, making the headlines in local newspapers for criticizing foreign miners, is Advocate Shahbaz Khan, the chairperson of Metals, Minerals and Gems Association of Gilgit Baltistan , who has recently accused some individuals of acquiring 35 tonnes of certain mineral deposits from uranium-rich Karkalti village of Ghizer district, and smuggling to China. Shahbaz is also critical of a uranium exploration company called Mohsin Industries, which has sought partnership with the locals as well as Chinese and Korean miners. Last year, Mohsin Industries was banned for attempting to smuggle uranium outside Pakistan. However, the company has recently been awarded exploration licenses in the uranium-rich areas of Sakwar, Minawar, Pari Bangla and Bonji, as well as parts of Shigar district and Skardo. Locals accuse Mohsin Industries of bypassing standard procedures to obtain licenses. Mirza Hussain, a member of the Gilgit Baltistan Legislative Assembly (GBLA) from Nagar, believes that the owner of the Mohsin Industries receives special treatment due to his close links with the director general of the Federal Mineral Development Agency and Syed Mehdi Shah, who is currently the chief minister of Gilgit Baltistan. Hussain also suspects that its owner has established links with members of pro-Taliban groups such as Jamiat Ulema-e-Islam of Maulana Fazlur Rehman. Today, Chinese miners and their affiliates are everywhere in Gilgit Baltistan especially in the Hunza-Nagar district, which is rich in uranium and certain minerals used in space technology. Some areas in upper Hunza, for instance, like the Chapursan valley have become no-go areas, where the Chinese continue their work on tunnel building and mineral exploration. Chinese miners have also acquired lease in Astore district to extract high quality copper. Another company digging uranium and gold in Gilgit Baltistan and coordinating with the Chinese investors is Shahzad International, which is one of the largest lease-owning foreign contractors in the region. In Rondo and Shigar districts, however, the Chinese prefer to purchase minerals and gems directly from the local wholesalers. Reports have also come of military surveillance in certain uranium-rich areas of Nagar district. Shahbaz was quoted recently by the weekly Bang-e-Sehar stating that foreigners are getting preferential treatment to obtain licenses while more than 200 applications submitted by the local companies remain in cold storage in Islamabad since 2001. His claims are substantiated by Babajan who states that the international mining mafia controls more than 50,000 sq. km of land in Gilgit Baltistan. He elaborates that 106 mining licenses were issued to the foreigners in 2010 alone and another 400 licenses remain under process. He criticizes authorities for banning local companies trading gems and metals outside Gilgit Baltistan and reserving this right for the foreigners to help them exercise absolute monopoly in the local market. Further, locals are also barred from establishing mineral and metal processing, up-gradation and finishing units. The situation encourages smuggling and sale of raw material at substandard rates, and threatens jobs and businesses of more than 20,000 locals. Abdul Hamid Khan, the chairperson of Balawaristan National Front, believes that foreign companies, especially the Chinese, refuse to share revenue from resource exploitation with the locals. He states that foreign companies don't pay tax to the Gilgit government either, since they owe their allegiance to Islamabad-based federal institution called Gilgit Baltistan Council (GBC), which has absolute control over legislative matters pertaining to minerals, forests, water reserves, trade and transit routes, and issues mining licenses to foreigners without consulting with the Gilgit-based GBLA. Khan further explains that while members of GBLA are elected by the local people and somehow answerable to them, members of GBC are handpicked by the Pakistani prime minister who expects them to protect Islamabad's interests in the disputed region. He asked Islamabad to acknowledge the rights of natives of Gilgit Baltistan over their land and resources and formulate long termed policies to eliminate resource thievery. The outcry of local activists has encouraged some members of GBLA to come down heavily on the ruling party. Deedar Ali, a member from Gilgit city, now wants Islamabad to award royalty to the locals over their mineral assets, give preference to the local companies during the licensing process, grant business loans on easy terms to the local miners to enhance industrial growth, and establish mineral testing labs, polytechnic college and mineral display centers in the region. Nawaz Naji, a member from Ghizer, has asked Islamabad to abolish GBC and transfer legislative powers on natural resources and trade and transit to GBLA. Another member from district Diamer, Gulbar Khan, revealed that the authorities in Islamabad leased an entire mountain range in the Tangir valley to a Pakistani company and the locals remain in awe over how their pastures, forests and glaciers became property of outsiders' overnight. The regional finance minister, Mohammad Ali Akhtar, also joined the chorus and admitted to the opposition members of GBLA that the locals have failed to benefit monetarily from the leases issued to foreign companies in the last two decades. Succumbing to public pressure, GBLA finally passed a resolution on June 9 demanding a ban on mining in Gilgit Baltistan and termed the presence of international miners a threat to the rights of the natives over their land and resources. Ironically, the GBLA, created after the promulgation of so-called self- governance and empowerment ad-hoc ordinance of 2009, lacks the authority to ban mining in Gilgit Baltistan and can only pass its suggestions to GBC and Ministry of Kashmir and Gilgit Baltistan Affairs in Islamabad, which hold actual authority to undertake such actions. Given the situation, Manzoor Hussain, who is chairperson of Gilgit Baltistan United Movement, doubts that the resolution passed by GBLA will help limit the role of foreign miners in the region and restore rights of the natives over their resources. On the contrary, he believes that the ban has been proposed to limit activities of local miners, and buy some time for GBC to formulate a mining policy favoring the foreigners. He believes that the licensing fee is already too high for the locals to afford and has forced them to either abandon mining or continue without Islamabad's approval. Manzoor added that although more than two-thirds of the mineral-rich areas have been leased out to outsiders like the Chinese, they cannot really start mining at a large scale until the natives are subdued and the current ban will, therefore, help overcome resistance and competition by limiting local access to these resources. Engineer Amanullah, the chairperson of Gilgit Baltistan Democratic Alliance, agrees with his colleagues and calls GBLA and GBC the long arms of Islamabad to overcome such obstacles by providing legal cover and political leverage to the foreign miners. They all believe and very few in the region now doubt that Pakistani President Asif Zardari issued the so-called empowerment and self-governance ordinance of Gilgit Baltistan to provide a cover to Chinese imperialistic goals in Gilgit Baltistan. Before it is too late, the international community must play its due role and take legal action against presence of Pakistani and Chinese troops and mining companies in a resource-rich and strategically located region like Gilgit Baltistan.