Reko Diq: Value of Pakistan's Copper Deposits Soars Amid Surging Demand

The value of copper assets has surged 31.7% in the last six months, significantly surpassing the rise in tech stocks (20.2%) and gold (20%) in the same period. Growing demand for copper is mainly driven by increasing adoption of green technologies such as electric vehicles and growth in AI (artificial intelligence) data centers using the latest Nvidia chips. At current prices, the value of copper and gold deposits at Reko Diq in Balochistan province is nearly $200 billion.

Comparing Asset Price Appreciation Over Last Six Months. Source: Wall Street Journal

Interest in developing Pakistan's Reko Diq copper and gold mines has also 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. 

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.

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New Infrastructure Brings Socioeconomic Development to Thar Desert

Pakistan Revives Reko Diq Mining Project

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Iftikhar Chaudhry Scared Away Foreign Investors

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Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

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  • Riaz Haq

    USGS: Pakistan Mining Industry 2019

    https://pubs.usgs.gov/myb/vol3/2019/myb3-2019-pakistan.pdf

    In 2019, Pakistan was the world’s third-ranked producer
    of iron oxide pigments. The country was ranked 11th in the
    production of barite, accounting for 1.2% of the world’s
    production and for an estimated 10.3% of the world’s reserves.
    Pakistan also produced other mineral commodities, such as
    cement, chromite, clay, coal, copper, crude petroleum, gypsum,
    iron ore, lead, limestone, natural gas, silver, and zinc (Brioche,
    2021; McRae, 2021)

    ------
    2018. In fiscal year 2019 (July 1, 2018, through
    June 30, 2019), the mining and quarrying sector contributed
    2.6% of the GDP and the growth rate of the mining and
    quarrying sector was negative 1.96% compared with 7.72% in
    fiscal year 2018 (International Monetary Fund, 2020; State Bank
    of Pakistan, 2020a, p. 18–19; 2020b, p. 8; 2020d, p. 3).
    The total import value in fiscal year 2019 was $54.8 billion
    compared with $60.8 billion in fiscal year 2018. The import
    value of mineral fuels, oils, and their distillation products was
    $16.0 billion; iron and steel, $3.38 billion; articles of iron or
    steel, $840 million; and aluminum and articles of aluminum,
    $349 million. The total export value in fiscal year 2019 was
    $23.0 billion compared with $23.2 billion in fiscal year 2018.
    The export value of mineral fuels, oils, and their distillation
    products was $477 million; salt, sulfur, lime, and stone,
    $463 million; and copper and articles of copper, $269 million
    (State Bank of Pakistan, 2020c, p. 123–124).

    ---------
    In 2019, the production of lignite was estimated to have
    increased by 180%; lead (mine, Pb content), by 68%; feldspar,
    by 61%; chromium (mine, Cr2
    O3
    content), by 46%; zinc (mine,
    Zn content), by 39%; talc, by 38%; lead (secondary, refinery),
    by 33% (reported); soda ash, by 27%; bentonite, by 24%;
    kaolin, by 17%; and sand and gravel (industrial, silica), by 12%.
    In contrast, the production of fuller’s earth was estimated to
    have decreased by 85%; dolomite, by 57%; bauxite, by 49%;
    iron oxide pigment, by 47%; magnesite, by 39%; sulfur (native),
    by 38%; pumice, by 33%; raw steel, by 30% (reported);
    limestone, by 22%; iron (mine, Fe content) and phosphate rock
    (gross weight), by 20% each; barite, by 15%; sand and gravel
    (industrial, unspecified), by 13%; rock salt, by 12%; and quartz,

    --------

    Copper and Gold.—In 2019, Metallurgical Corporation
    of China Ltd. (MCC) applied for an extension of its mining
    license for the Saindak copper-gold mine, which was set to
    expire in 2022. MCC operated the Saindak Mine through a
    50%-owned subsidiary, Saindak Metals Ltd. The company
    produced 13,049 metric tons (t) of copper (mine, Cu content)
    in 2019, which was an increase of 4.1% from the 12,538 t
    produced in 2018. MCC mined mainly the south and north ore
    bodies using open pit mining; the deposits were expected to be
    depleted of minable resources after 2021. The east ore body of
    the mine was estimated to have 278 million metric tons (Mt)
    of ore and an expected mine life of 19 years. The exports of
    copper and articles thereof from Pakistan to China increased to
    $550 million in 2019 from $106 million in 2016 (Metallurgical
    Corporation of China Ltd., 2019, p. 32; 2020, p. 31; Shahid,
    2019; Independent News Pakistan, 2020).
    Tethyan Copper Co., which was a joint venture between
    Barrick Gold Corp. of Canada and Antofagasta PLC of Chile,
    was engaged in a legal dispute with the Government of Pakistan

  • Riaz Haq

    Electrification refers to the process of replacing technologies that use fossil fuels (coal, oil, and natural gas) with technologies that use electricity as a source of energy. Depending on the resources used to generate electricity, electrification can potentially reduce carbon dioxide (CO₂) emissions from the transportation, building, and industrial sectors, which account for 65 percent of all US greenhouse gas emissions. Addressing emissions from these sectors is critical to decarbonizing the economy and, ultimately, mitigating the impacts of climate change. This explainer reviews how electrification can reduce emissions; possibilities and potential challenges of electrification in the transportation, building, and industrial sectors; and policy options for encouraging electrification.

    https://www.rff.org/publications/explainers/electrification-101/#:~....

  • Riaz Haq

    Barrick - Second Cohort of Graduates from Balochistan Selected for Reko Diq ‘International Graduate Development Program’


    https://www.barrick.com/English/news/news-details/2024/Second-Cohor...

    KARACHI – Reko Diq Mining Company (RDMC) is proud to announce the selection of eighteen talented young graduates from Balochistan for the second cohort of the prestigious RDMC International Graduate Development Program (IGP). As part of its to commitment to develop local and national employees, Barrick, the operator of RDMC, launched the International Graduate Development Program for the Reko Diq project in July 2023.

    Welcoming IGP 2024 cohort at a ceremony in Karachi, Barrick CEO Mark Bristow said, “We are excited to have you join the Reko Diq International Graduate Development Program. Since its inception this program has aimed to engage young graduates like you from Balochistan to equip them with the skills necessary for successful careers at Reko Diq and in the mining industry. I would urge you to embrace this opportunity to learn, collaborate and shape the future of the Reko Diq project, your province and the country.”

    For the 2024 program, a rigorous merit-based selection process led to the identification of eighteen exceptional graduates from a competitive pool of over 3,000 applicants. Among those selected are four women, underscoring Barrick's commitment to gender diversity within the mining sector. The graduates hold degrees in various fields, including Electrical Engineering, Mechanical Engineering, Geological Engineering, Civil Engineering, Environmental Sciences, Mining Engineering, and Geology.

    Like the selected graduates of 2023, this second batch of talented youth from Balochistan will embark on 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.

    The selected cohort represents a diverse range of districts in Balochistan, including Panjgur, Gwadar, Quetta, Loralai, Khuzdar, Noshki, Musa Khel, Killa Saifullah, Zhob, and the Chagai district where Reko Diq is located. Their participation in the program not only helps to address the regional skills gap but also promotes local empowerment and economic development.