Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Tuesday, November 19, 2024

Barrick Gold CEO "Super-Excited" About Reko Diq Copper-Gold Mine Development in Pakistan

Barrick Gold CEO Mark Bristow says he’s “super excited” about the company’s Reko Diq copper-gold development in Pakistan. Speaking about the Pakistani mining project at a conference in the US State of Colorado, the South Africa-born Bristow said “This is like the early days in Chile, the Escondida discoveries and so on”, according to Mining.com, a leading industry publication. "It has enormous upside potential". He was referring to Pakistan’s untapped discovery potential. Escondida was the first discovery of copper in Chile which is now the world's largest producer and exporter of copper. Last year, the South American country exported nearly $20 billion worth of copper.

Barrick Gold CEO Mark Bristow in Balochistan, Pakistan. Source: Quetta Voice

“Copper has no substitutes,” Bristow continued. “It is as strategic as gold is precious, and we’re bringing new copper projects online just as the supply squeeze hits.” Comparing Reko Diq to Escondida, he said "walking across, there's more than one porphyry, significantly more than one, it's a real endowment for the people of Balochistan and greater Pakistan". "It (Reko Diq) is world class, a gold mine on its own and a copper mine on its own". He expects a peak of 10,000 jobs during construction and 5,500-6,000 direct jobs to operate the Reko Diq mine afterwards. It will also create a lot of indirect job opportunities in the supply chain. "We are going to demonstrate (in Balochistan) that you can do something transformatory, both socially and economically".

Interest in developing Pakistan's Reko Diq copper and gold mines has grown with widening gap between demand and supply of the metals. Dennis Mark Bristow, CEO of the Canadian mining giant Barrick Gold Corporation, has said the Reko Diq mining project in Balochistan province is “absolutely on track” and would be able to begin production by 2028, according to news reports. Bristow said Reko Diq is an “enormous project” in which the company would be investing $10 billion.

Growing Copper Supply-Demand Gap

Clean Energy Driving Global Copper Demand. Source: IEA Via Nikkei

New infrastructure development is underway to connect Reko Diq with the national highway network. Barrick is building a link road to connect the mining project site with N-40 Quetta-Taftan national highway. Barrick chief says the company looks at the project as a “multi-generational investment,” adding that it wants all children under the age of 10 in the Reko Diq region to be in school by the end of 2024. Similar infrastructure projects to support coal mining in Thar desert have brought socioeconomic improvements and human development for the local villagers.

Barrick is developing local Balochi human capital trained in modern mining. Dozens of selected candidates, including women, are undergoing an intensive two-year on-the-job training program at Barrick’s mine sites at of Veladero in Argentina and Lumwana in Zambia. This hands-on experience is designed to equip them with practical skills and insights into world-class mining operations. Upon completion of the program, graduates typically return to Barrick operations in their home country, contributing to driving positive change in their communities, according to Barrick Gold.

The Reko Diq project is expected to employ thousands of workers during and after completion. Barrick has interviewed over 3,000 applicants from universities across Pakistan and selected 9 Baloch citizens, four women and five men, according to Bristow. “And they are now working on our mines in Argentina and they will go through a program of development and gaining experience from all our different operations around the world,” Bristow said, saying 30 such graduates would be employed in training programs with the company by the end of the year. By Jan-Feb next year (2025), he said, 1,200 people would be employed, which would increase to 6,000 by 2026. “By the time we peak production, we will have employed 10,000 people,” Bristow told Arab News.

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan reached a deal to restart the Reko Diq mining project back in March 2022 on former Prime Minister Imran Khan's watch. Reko Diq is the world's 4th largest undeveloped copper-gold porphyry deposit with over 14 million tons of copper (worth $142 billion at $9,464 per ton) and 21 million ounces (worth $50 billion at $2,367 per ounce) of gold.

The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment, the largest single investment in the country, and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

Thursday, November 14, 2024

What Can Pakistan Do to Cut Toxic Smog in Lahore?

Citizens of Lahore have been choking from dangerous levels of toxic smog for weeks now. Schools have been closed and outdoor activities, including travel and transport, severely curtailed to reduce the burden on the healthcare system. Although toxic levels of smog have been happening at this time of the year for more than a decade, this year appears to be particularly bad with hundreds of people hospitalized to treat breathing problems. Millions of Lahoris have seen their city's air quality index (AQI) cross the 1,000 mark several times this month - anything above 300 is considered dangerous. What can Pakistan do to cut this level of air toxicity? Is there a silver bullet here? Let's try and understand the root causes of this problem to answer these questions.

NASA Satellite Images of Fires and Smog Taken on Nov 6, 2024. Source: NASA

South Asia is particularly susceptible to pollutants that hang in the air for extended periods of time. The US National Aeronautics and Space Administration (NASA) satellite images show dull gray haze hovering over northern India and Pakistan, and parts of Bangladesh. It is believed that emissions from solid fuel burning, industrial pollutants and farm clearing fires get trapped along the southern edge of the Himalayas in winter time. NASA Earth Observatory explains this phenomenon as follows:

"The haze.... likely results from a combination of agricultural fires, urban and industrial pollution, and a regional temperature inversion. Most of the time, air higher in the atmosphere is cooler than air near the planet’s surface, and this configuration allows warm air to rise from the ground and disperse pollutants. In the wintertime, however, cold air frequently settles over northern India, trapping warmer air underneath. The temperature inversion traps pollutants along with warm air at the surface, contributing to the buildup of haze."

Trapped Smog in Lahore. Source: Aljazeera

The single biggest factor contributing to heavy smog in October-November period each year in Indian and Pakistani Punjab is the lighting of a huge number of fires to burn the agriculture waste to clear the land for planting winter crops. The Indian government estimates that 38% of the smog in the Indian capital New Delhi comes from stubble burning in Punjab. Government policies are needed to incentivize widespread use of machines to remove agriculture waste. This can be accomplished by subsidizing the purchase and/or rental of these machines in both India and Pakistan. There should also be heavy fines imposed on those farmers who insist on setting fires to clear the land.

Other factors, such as emissions from vehicles and industrial units, also require better regulations and stricter enforcement. Coal-burning units such as brick kilns and cement factories should be moved further away from the population centers. Such measures can significantly cut toxic smog affecting people's health and productivity in the Punjab region straddling the India-Pakistan border. It will be helpful if Indian and Pakistan authorities can work together to solve this common problem.

Thursday, November 7, 2024

Pakistan to Develop Urdu LLM for Generative AI

National University of Science and Technology (NUST), National Information Technology Board (NITB) and Telecom network operator Jazz have signed a Memorandum of Understanding (MOU) to develop Pakistan’s first indigenous Large Language Model (LLM) with focus on Urdu, including datasets for Pashto and Punjabi languages. It is aimed at empowering individuals, businesses, and organizations with advanced AI tools in their native languages. The envisioned LLM is expected to drive innovation in Generative AI applications, boosting productivity and accessibility in critical sectors like healthcare, education, and agriculture.

GPT-4 Accuracy Scores. Source: The Economist

Generative AI tools such as ChatGPT are powered by large language models, or LLMs. These models need to be trained on vast amounts of data in specific languages to be useful. Unfortunately, the Urdu content of the Internet is less than 0.1%. This will present a challenge for the developers of Urdu LLMs.

Online Content of Various Languages. Source: W3Techs

Lack of Urdu content available for training ChatGPT affects the accuracy of the results for Urdu language users. For example, the GPT-4 accuracy score in question-answer tests in Urdu is just over 70%, compared with 85% accuracy score in the English language, according to data from OpenAI. Other South Asian languages, including Hindi, Bengali, Punjabi, Marathi and Telugu, suffer from the same problem.

It's not just a South Asian problem. These challenges exist in the developing world. Non-European languages are generally poorly represented online. It's a major obstacle for non-European nations in developing their own generative artificial-intelligence (AI) models, which rely on vast amounts of training data. Generative artificial intelligence (AI) can produce biased results due to a number of factors, including the data it's trained on, the algorithms used, and how it's deployed.

The use of AI in developing nations such as Pakistan will remain limited to a small number of people proficient in the use of the English language. Broadening the adoption of AI applications will require LLMs trained on local language content. The absence of this development could cost Pakistan the opportunity to take full advantage of the AI Revolution.