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Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits
Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's 4th largest undeveloped copper-gold porphyry deposit with over 14 million tons of copper and 21 million ounces 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.
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| Reko Diq Copper-Gold Mine |
New Reko Diq Deal:
The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.
A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.
Production Targets/Social Infrastructure Projects:
When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.
The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.
Future Potential:
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.
“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.
Foreign Direct Investment:
After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.
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Rare Earths at Reko Diq?
Riaz Haq
Reko Diq copper project to generate $2.8b in exports in first-year: FinMin
https://dunyanews.tv/en/Business/912937-reko-diq-copper-project-to-...
WASHINGTON, DC (Web Desk) - Pakistan’s mining sector is poised for major expansion, with Finance Minister Muhammad Aurangzeb projecting that the first year of commercial operations at the Reko Diq copper and gold project could generate $2.8 billion in copper exports, a 10 per cent increase in the country’s overall export base.
Speaking to the media at the conclusion of his weeklong US visit for the IMF–World Bank Annual Meetings in Washington, Aurangzeb said the project is only the beginning, with additional mines and concessions expected to come online in the coming years.
“This is just the start because there are other mines and concessions coming through,” he said.
Aurangzeb highlighted that the Reko Diq project is attracting US investment, with the International Finance Corporation (IFC) leading the syndication and US EXIM Bank expected to participate once the US government shutdown concludes.
Islamabad’s long-term vision includes smelting and value addition, which will enhance Pakistan’s industrial output.
“That’s not going to happen overnight, but where we are headed has huge upside for Pakistan,” he said.
Oct 19
Riaz Haq
$636b worth of gold reserves found in Tarbela
https://tribune.com.pk/story/2575731/636b-worth-of-gold-reserves-fo...
KARACHI:
Gold reserves worth $636 billion have been discovered at Tarbela. This revelation was made by Hanif Gohar, Chairman of Air Karachi and former senior vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), during a conversation at the Karachi Press Club on Monday.
He said that the gold reserves found in Tarbela were sufficient to pay off the country's foreign debt and the matter had already been brought to the attention of the Special Investment Facilitation Council (SIFC) and the State Bank of Pakistan (SBP) governor.
Gohar stated that contact had been established with Australian and Canadian drilling companies for the exploration of the reserves. "As soon as we receive directives from the prime minister, the process of extracting gold from Tarbela's soil will begin," he said.
Speaking about Air Karachi, Gohar announced that the airline's domestic operations would commence on March 23, 2026. The airline will initially have a fleet of three to five Airbus aircraft.
He said international flights would begin after a year of successful domestic operations. Gohar disclosed that Hyderabad's first four-star hotel was being built on five acres. He stressed that Pakistan could not cut its budget deficit without developing the construction sector, noting that work in Karachi continued despite a poorly functioning system.
on Tuesday
Riaz Haq
Japan to invest $300 mn in Pakistan's copper mine amid supply crunch | World News - Business Standard
Situated in Pakistan's Balochistan province, the Reko Diq copper-gold mine is poised to become one of the world's five largest copper reserves, drawing Japanese financing and industrial support
https://www.business-standard.com/world-news/japan-investment-pakis...
The Japan Bank for International Cooperation (JBIC) and several other Japanese entities are preparing to invest in Pakistan’s Reko Diq copper mine project, signalling Tokyo’s growing interest in securing supplies of critical minerals likely to face shortages in the years ahead, Nikkei Asia reported.
JBIC plans $300 million loan for Reko Diq project
Pakistan’s Finance Minister Muhammad Aurangzeb met JBIC Governor Nobumitsu Hayashi in Washington last month and “welcomed JBIC’s formal commitment to join the Reko Diq lender group”.
Aurangzeb said the move would strengthen investor confidence and encourage Japanese businesses to expand their footprint in Pakistan. JBIC intends to commit around $300 million to the project, with the loan agreement expected to be finalised by early next year.
Located in Pakistan’s southwestern Balochistan province, the Reko Diq copper-gold mine is expected to rank as the world’s fifth-largest copper deposit. According to an April report by consultancy firm Digby Wells, the project will be developed in two phases, each designed to process 45 million metric tonnes of ore annually and produce 800,000 tonnes of copper concentrate with a copper grade between 26 per cent and 30 per cent.
Mining operations are scheduled to begin in 2028 and are projected to continue for 38 years.
Japanese companies expand mining partnerships
JBIC is not the only Japanese entity showing interest in Reko Diq. Komatsu, a leading mining equipment manufacturer, signed a $440 million agreement earlier this year to supply heavy machinery for the project. The company also plans to establish a unit in Karachi and deploy experts from Japan and other countries.
Japan’s involvement extends through the Asian Development Bank (ADB), where Japan and the US each hold a 15.5 per cent stake, making them the largest shareholders. All ADB presidents to date have been Japanese nationals. In August, the ADB approved loans worth $300 million and extended a $110 million credit guarantee for the Reko Diq project.
Copper’s strategic role in the energy transition
Copper is critical to global industries, powering renewable energy infrastructure, electric vehicles, batteries, smartphones and data centres. However, the International Energy Agency (IEA) warned in a May report that copper and lithium face major shortfalls, with mined supply from announced projects expected to lag far behind projected demand by 2035.
With global copper shortages looming, Japan’s rising investment in Reko Diq underscores its strategy to secure long-term access to critical resources, while enhancing Pakistan’s potential as a key supplier to global export markets.
10 hours ago