Barrick Gold Corporation President Mark Bristow on Monday stated that the first phase of Reko Diq copper-gold project will be completed by 2027-28, and the scheme will convert it into a “world-class mine and transform Balochistan”.
An agreement in principle was reached between the government of Pakistan, the provincial government of Balochistan and Barrick earlier this year for the reconstitution and restart of the project, which has been on hold since 2011.
It will be operated by Canada’s Barrick and owned 50% by it, 25% by the Balochistan government and 25% by Pakistani state-owned enterprises.
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“We will bring capital and technology to this project,” said Barrick Gold Corporation President Mark Bristow in a press conference in Islamabad. “It is a concept which cannot be successful without cooperation between countries and institutions.”
Both sides are committed to show the world how partnerships on huge projects can deliver excellent results, he said.
Investment for the first phase of the project is estimated at $4 billion and the firm is looking for a consortium of investors to pour in $2 billion out of this value, he said.
“We have reached out to International Finance Corporation (IFC), co-investors and export and import agencies around the world,” Bristow said. “This is one of the largest fixed foreign investment project that Pakistan has ever had and it is the largest in Balochistan.”
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A press release issued by the company stated that “Finance Minister Miftah Ismail and Barrick President Mark Bristow were committed to developing Reko Diq into a world-class mine that would create value for the country and its people through multiple generations”.
The two sides held a meeting on Monday.
The definitive agreements underlying the framework agreement are currently being finalised by teams from Barrick and Pakistan. Once this is completed and the necessary legalisation steps are taken, Barrick will update the original feasibility study, a process expected to take two years.
“Construction of the first phase will follow that with first production of copper and gold expected in 2027-28,” Bristow said during a meeting with Miftah .
“During the negotiations, the federal government and Barrick confirmed that Balochistan and its people should receive their fair share of the benefits as part of the Pakistan ownership group.”
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“At Barrick, we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities,” he told the finance minister. “At Reko Diq, Balochistan’s shareholding will be fully funded by the project and the federal government, allowing the province to reap the dividends, royalties and other benefits of its 25% ownership without having to contribute financially to the project’s construction or operation.”
Bristow also shared plans to implement a range of social development programs for Balochistan, supported by an upfront commitment to the improvement of healthcare, education, food security and the provision of potable water in a region where the groundwater has a high saline content.
On the occasion, Finance Minister Miftah Ismail said the development of Reko Diq represented the largest foreign direct investment in Balochistan and one of the largest in Pakistan.
“Like Barrick, we believe that the future of mining lies in mutually beneficial partnerships between host countries and world-class mining companies,” he said. “The Reko Diq agreement exemplifies this philosophy and also signals to the international community that Pakistan is open for business.”
Taking to Twitter, he said that Pakistan was looking forward to Barrick Gold’s investment in Reko Diq.
According to him, Bristow had an enlightened vision for the mine. “I believe this investment is going to be transformational for Balochistan and Pakistan,” he said.
In March 2022, the federal and provincial government of Balochistan signed a new agreement with Barrick Gold Corporation of Canada for extraction of gold and copper reserves from Reko Diq with an investment of $10 billion. Imran Khan, prime minister at the time, witnessed the signing ceremony between the federal government, the government of Balochistan and Barrick Gold Corporation of Canada after successfully resolving the longstanding dispute with Tethyan Copper Company (TCC) concerning the development of copper and gold mines in Chagai, popularly known as the Reko Diq dispute.
On July 29, 1993, the BHP Minerals (BHP) and the Balochistan Development Authority (BDA) had signed the Chagai Hills Exploration Joint Venture Agreement (CHEJVA). Subsequently, on Nov 23, 2006, the TCC had bought the BHP’s interests in CHEJVA for $240 million. On August 26, 2011, the TCC had submitted its feasibility report and an application for a mining lease which was rejected by the licensing authority on November 15, 2011. On November 6, 2011, a petition was filed before the Supreme Court asking the top court to order the Balochistan government to refrain from issuing a mining license in an arbitrary and unlawful manner.
In August 2019, Imran Khan had set up a committee to steer the negotiations with an aim for early development of the mines. In this effort, the federal and provincial governments were assisted by international advisors.
The country managed to escape a penalty of $11 billion in March after reaching an out-of court settlement on the Reko Diq project in the Chagai district of Balochistan.