China is expected to spend $25 million to expand the existing production capacity of the Saindak copper project by 30 per cent within a period of one year. Pakistan exported copper worth over $30 million to China during four months, (July-October) last year from the project which is a joint venture between the two countries.

Under Chinese, the project facilities consist of open pit mine, concentrator and furnace smelter with a capacity to annually produce 15,800 tones of blister copper containing 1.5 tones of gold and 2.8 tones of silver. The latest installation include crushers, smelters and other plants.

The Saindak mining company, MRDL, produced 18,000 tons blister copper till September 2004. It is a subsidiary of the Metallurgical Construction Company of China (MCC) operating the project, with an initial investment of $26 million since August 2003.

Pakistan’s annual export of copper to China is expected to reach around $70 million by the end of December 2005. The export of copper amounted to $48 million during January-August 2005, according to the Chinese Customs Authority. As compared to the previous year, the copper export showed an upward trend.

Saindak is the first non-ferrous producing project. It plays an important role in economic progress of Pakistan besides meeting some of the rising copper demand of China. According to one estimate, China’s demand for copper products in the past decade grew by more than nine per cent annually.

It was due to the strong demand from China that Chile’s copper export income doubled in October 2004 from the same month last year to $1.433 billion. In 2003, China consumed 2.5 million tons of copper, accounting for 16.5 per cent of the world’s total and ranking the second after the United States.

The Saindak saga is also a story of financial mismanagement and administrative mishandling by government planners and economic managers in Islamabad. A project originally estimated to cost Rs6 billion ended up costing more than Rs14 billion. It fell to the lot of the Musharraf government to pull the project out of the doldrums.

Pakistan and China signed a formal contract worth $350 million for development of Saindak copper gold project. According to the contract, the Chinese company will pay $500,000 monthly to government of Pakistan over next 10 years plus 50 per cent of total revenue from mineral sale. The government of Balochistan will also receive $0.7 million per year as royalty.

Earlier, there was a need for establishing a refinery at Saindak. The option to use the facility of Iranian refinery was open, which would prove economical as situated across the border. The Chinese however proposed later to establish a refinery with the investment of $30 million. The refinery will separate gold from copper.

The installation of refinery would enhance the cost of production, as the cost of fuel for power generation is very high. Moreover, the Chinese are not bound to establish a refinery by an accord. They may export blister copper to the world market directly or they may opt for separation of gold and copper through a refinery. The company keeps its options wide open to ensure profitability in this regard.

A survey report states that Saindak copper is of excellent quality. With 30 per cent increase in production capacity envisaged under expansion project, Pakistan would become one of important exporter of copper. The copper is the strategic metal by virtue of its critical properties like high conductivity, recyclability and resistance to corrosion.

The vast applications and uses of copper in areas such as superconductivity, high-speed data transmission, microchip manufacture, solar energy and the storage of nuclear wastes add to the strategic value of the commodity.