Reko Diq security funding delayed as company incurs $390,000 in extra costs

Reko Diq Mining Company has raised concerns over the government’s failure to fulfill financial commitments under the Security Services Framework Agreement (SSFA) and a memorandum of understanding (MoU), leading to additional expenses of $390,000 for the company. 

According to a news report, the Prime Minister’s Office has urged timely disbursement of funds deposited by the mining company for the Frontier Corps (FC) Balochistan (South), which is responsible for securing the project.

According to the Interior Division, FC Balochistan (South) plays a crucial role in border control, countering terrorism, and ensuring internal security, including safeguarding the Reko Diq project. Under the agreed terms, the mining company had to provide a one-time grant to FC for security arrangements. 

Following the company’s deposit of the initial grant, a request was made for Rs2.801 billion in payments. The Finance Division, however, approved only Rs1.952 billion for vehicles, protective gear, and security infrastructure, leaving Rs848.6 million unpaid.

Reko Diq Mining Company has since deposited Rs943.7 million for the second installment and recurring charges from March to October 2024. The Interior Division requested a technical supplementary grant of Rs1.792 billion to cover security expenses, but the Finance Division only endorsed Rs257 million for non-recurring costs such as vehicle procurement and accommodation construction.

The Finance Division noted that FC Balochistan (South) already had a budget allocation and advised reassessing the request. Rising expenses for fuel, vehicle maintenance, and accommodation for security personnel remain a challenge, as FC currently incurs heavy costs for rented housing due to a lack of permanent structures in the project area. Additionally, Rs62.7 million owed to FC for past expenses remains unpaid.

Security arrangements for foreign personnel working at Reko Diq require uninterrupted funding for food and medical facilities. While the Interior Division urged the Economic Coordination Committee (ECC) to approve the Rs1.792 billion grant for the smooth continuation of security operations, the Finance Division insisted that FC provide a detailed expenditure breakdown before final approval.