ISLAMABAD: Barrick Gold expects the Pakistani government to sanctify its $6 billion out-of-court settlement on international arbitration to pave the way for $7 billion investment in the Reko Diq deal, an official said on Tuesday.
In a media briefing after his meeting with Finance Minister Miftah Ismail, Barrick Gold Corporation President and Chief Executive Mark Bristow said that he and the finance minister shared a clear vision of the national strategic importance of the Reko Diq copper-gold project.
Both are committed to developing it as a world-class mine that would create value for the country and its people through multiple generations, he added.
“In the first phase, we will invest $4 billion and in the next phase the investment of $3 billion will be made in this project,” he said, adding that mining projects need long-term investment and work on these projects even remain continued for 40 to 50 years.
Reko Diq is one of the world’s largest undeveloped copper-gold deposits. An agreement in-principle reached between the government of Pakistan, the provincial government of Balochistan and Barrick earlier this year provides for the reconstitution and restart of the project, which has been on hold since 2011.
It will be operated by Barrick which will own 50 per cent, 25 per cent by the Balochistan government and 25 per cent by Pakistani state-owned enterprises.
The definitive agreements underlying the framework agreement are currently being finalised by teams from Barrick and Pakistan. Once this has been completed and the necessary legalisation steps have been 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.
“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,” Bristow said.
“At Barrick we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities. 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 per cent ownership without having to contribute financially to the project’s construction or operation.
It is important that Balochistan and its people should see these benefits from day one. Even before construction starts, when the legalisation process has been completed, we will implement a range of social development programmes, 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,” he added.
Finance Minister Ismail said that the development of Reko Diq represented the largest direct foreign 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. The Reko Diq agreement exemplifies this philosophy, and also signals to the international community that Pakistan is open for business,” he added.
Subject to the updated feasibility study, Reko Diq is envisaged as a conventional open pit and milling operation, producing a high-quality copper-gold concentrate.
It will be constructed in two phases, starting with a plant that will be able to process approximately 40 million tonnes of ore/annum which could be doubled in five years.
With its unique combination of large scale, low strip and good grade, Reko Diq will be a multi-generational mine with a life of at least 40 years. During peak construction the project is expected to employ 7,500 people and once in production it will create 4,000 long-term jobs.
