ISLAMABAD, Jan 2: The Ministry of Kashmir Affairs and Northern Areas (Kana) has shelved a major gold and base metals project in Northern Areas that had initially identified around 120 high gold-bearing areas.

Official sources told Dawn that this was done despite the fact that international mineral companies had made offers to develop the project at their own risk and cost besides 24 to 28 per cent free equity participation to the government.

The Gold and Base Metals Exploration Project was launched in 1992 by Pakistan Mineral Development Corporation (PMDC), Sarhad Development Authority (SDA) and the Australian government. The total cost of the project amounted to Rs79 million including foreign exchange component of Rs18.7 million.

The exploration activities completed in June 2001 found high gold prospective deposits in many areas, including five source rocks, through scanning of 80,000 square kilometres.

Around 4000 samples collected from the areas like in Shimshal, Ishkoman, Hunza, Yasin and Khaplu showed 5 gram per ton to 100 gram per ton (5 ppm to 100 ppm) gold contents besides high priority 19 platinum-bearing areas.

Internationally, up to 5 ppm (five gram per ton) gold-bearing areas are considered as commercially viable projects. Saudi Arabia is now working on commercial exploration at 2 ppm (2 gram per ton).

This was the stage when detailed analysis of sampling would have established exact estimation of gold and base metal reserves in the area. Not only that now the project has been closed declaring it uneconomical without laboratory analysis but its 12 highly qualified geologists and mining engineers all trained in Australia during the exploration process have been laid off.

Official sources said that 4000 samples collected during the project were analysed by a Dutch mining company, Minarco, through Ultra trace laboratory in Australia and termed it “high potential for occurrence of precious and base metals”.

The company offered to make its own investments for further estimation of reserves and then commercial production of gold and base metals at its own risk and cost. The company has also offered to include 28 per cent free equity participation to the Government of Pakistan at the time of commercial production.

The company was disallowed to move forward. Another unknown company was launched by senior authorities of the PMDC but a mining engineer took the issue to the court and got confirmed that a drama was being staged to siphon off national resources.

The court issued a degree against PMDC authorities but implementation proceedings were stopped at the higher level.

The 12 geologists and mining engineers who were laid off by the PMDC have approached the President of Pakistan through one of their senior project officers, Zahid Aleem Hashmi, to order probe into the circumstance in which project has been shelved.

In a letter to the President, these officers pointed out that the project was closed down even before the laboratory tests of bulk sampling could be submitted by the Sarhad Development Authority. These engineers feared that the project was shelved with vested interest so that it could be given to small and individual parties in bits and pieces for personal gains.

They challenged that even the 500-kg bulk sample lying at SDA laboratory in Peshawar contained high potential gold contents. They demanded that a high level technical committee be constituted to verify and analyse bulk samples and other results.

The letter to the president said: “The project has been deliberately terminated after incurring huge expenses from the national exchequer for someone’s vested interests under a planned programme. Firstly the stage was set for the purpose by the PMDC and all the technical experts trained for the project abroad were either terminated or forced to resign. Secondly, the controlling ministry stamped the project as closed for all purpose without even obtaining comments of the executing agency or bringing it for consultation/discussion in a competent forum or without interpreting the data.”