Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

[Riaz Haq]

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.

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. 

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy 

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

[Riaz Haq]

Saudi Arabia chases 15% stake in Pakistan's Reko Diq mine | AGBI


https://www.agbi.com/mining/2025/01/saudi-arabia-chases-15-stake-in...

Saudi Arabia is in talks with Pakistan to acquire a 15 percent stake in one of the world’s largest undeveloped copper and gold resources, a Pakistani government minister has said.

Negotiations between the two countries started last year over a minority stake in the Reko Diq copper and gold mine project in Pakistan’s southwestern Balochistan province.

Media reports in Pakistan said the federal cabinet had approved the sale of a 15 percent stake for $540 million and that the Saudi Fund for Development will provide $150 million to support mineral development in the Balochistan area.

However, Pakistan’s petroleum minister Musadik Malik said the deal has not been approved yet.

“The matters with Saudi Arabia on Reko Diq are moving forward positively and will be finalised soon,” he said in a statement on X. “A price negotiation committee is handling the matters to ensure negotiations proceed in a timely fashion to seal the deal soon. However, it has not been finalised yet.”

The mine is 50 percent owned by Canada’s Barrick Gold, one of the world’s largest gold mining companies.

Three federal state-owned enterprises in Pakistan own 25 percent and the Balochistan government owns the remaining 25 percent.

[Riaz Haq]

 KARACHI, Jan 20 (Reuters) - The Reko Diq copper and gold project in Pakistan is expected to generate approximately $74 billion in free cash flow over the next 37 years, based on consensus long-term prices, the CEO of joint owner Barrick Gold said in a media interview.

https://www.reuters.com/markets/commodities/pakistans-reko-diq-mine...

, opens new ta

KARACHI, Jan 20 (Reuters) - The Reko Diq copper and gold project in Pakistan is expected to generate approximately $74 billion in free cash flow over the next 37 years, based on consensus long-term prices, the CEO of joint owner Barrick Gold said in a media interview.

Barrick Gold owns a 50% stake in the Reko Diq mine and the governments of Pakistan and the province of Balochistan own the other 50%. Barrick considers the mine one of the world's largest underdeveloped copper-gold areas, and its development is expected to have a significant impact on Pakistan's struggling economy.

IThe project, which was delayed due to a long running dispute that ended in 2022, is expected to start production by the end of 2028. It will produce 200,000 tons of copper per year in its first phase, with an estimated cost of $5.5 billion. The first phase is expected to be completed by 2029, Barrick's CEO Mark Bristow told Pakistani digital media outlet Dawn News English.

A second phase, estimated to cost $3.5 billion, will double production, he added.

The mine is estimated to have reserves lasting 37 years but Bristow said that through upgrades and expansions it could potentially be mined for much longer.

A free cash flow of $74 billion could generate significant dividends, royalties and taxes for Pakistan, which currently has only around $11 billion in foreign reserves.

Barrick is also in talks with railway authorities and infrastructure providers to revamp the coal terminal in Port Qasim, on the outskirts of Pakistan's port city Karachi, to develop infrastructure to transport copper in the country and for export.

Bristow said the project's timeline is on track, with fencing, accommodation, and surveys already completed.

Saudi Arabian mining company Manara Minerals could invest in Pakistan's Reko Diq mine in the next two quarters, Pakistani Petroleum Minister Musadik Malik said last week.

Executives from Manara visited Pakistan in May last year for talks about buying a stake in the project. Pakistan is also in talks with other Gulf countries about mining opportunities, Malik said.

[Riaz Haq]

Saudi Arabia set to buy stake in Pakistan copper and gold mining project

Kingdom plans to purchase up to 20% share in $9bn complex as it looks to accelerate its diversification away from oil

https://www.ft.com/content/6de43b38-d4fe-479a-8aba-55ea994c22d9


Saudi Arabia’s investment mining fund is set to buy a stake in Pakistan’s Reko Diq project, which will be one of the world’s largest copper mines once complete, as the kingdom accelerates its expansion into the sector. Manara Minerals plans to buy 10-20 per cent of the $9bn complex, which is being developed by Barrick Gold, and secure an offtake agreement for future output. Copper is vital for the clean energy transition. The mining fund would buy the equity stake from the government of Pakistan, which owns 25 per cent of the mine, for between $500mn and $1bn, according to people close to the discussions. “This is a massive project, it will change the Pakistan economy. It’s very big,” Barrick’s chief executive Mark Bristow said in an interview in Riyadh on the sidelines of a mining summit there last week. An investment by Saudi Arabia would be “good for the whole project because it brings a heavyweight regional partner into the mix”, he added. It is nearing the finishing line after a high-level delegation from Pakistan last week visited Riyadh, where the country’s petroleum minister Musadik Malik told journalists he expected a deal within the next six months.

When completed it will be a big boost for Barrick Gold, which has suffered a share price slump after a dispute with the government of Mali forced it to shut down its big gold mine in the west African country. Saudi Arabia is one of the biggest external creditors to Pakistan, which it has lavished with loan rollovers, central bank deposits and oil facilities to help service the $9.2bn of debt the south Asian country owes the Gulf kingdom. Pakistani officials have been aggressively courting Saudi investments in recent months, as they warn their country must deliver “investable” projects because the kingdom’s appetite for financially propping it up is running thin. Reko Diq, which is in western Balochistan near the Afghan and Iranian borders, will produce as much as 400,000 tonnes of copper and 500,000 ounces of gold once both phases of the project are complete, according to Barrick. The south-western province has been suffering from a brutal insurgency from Baloch ethnic separatist groups motivated in part by a backlash to foreign investors harvesting the region’s rich natural resources. The initial phase of the mine would cost $4.5bn, and be funded by $1.5bn from Barrick, a similar but slightly lower amount from Pakistan, and the remainder from a debt consortium that would include the World Bank, the Asian Development Bank and other western lenders, according to Bristow. A second phase of the mine, estimated to cost a further $4.5bn, would be funded by the revenues generated during the first phase, Bristow said.

Some infrastructure is already being developed at the site, including an airstrip and housing for 1,000 workers, in anticipation of the mine construction beginning soon. In Riyadh, ministers from Pakistan and Saudi Arabia said they were committed to the project. Saudi Arabia’s minister of industry and minerals Bandar Alkhorayef confirmed Manara was considering the Reko Diq deal in an interview with the Financial Times last Tuesday and emphasised that it could help meet the kingdom’s demand for metals. “[Manara] will be a good tool for us to ensure that Saudi Arabia secures the minerals it needs for its future industrialisation and needs,” said Alkhorayef. “It’s a platform where we can see us working with other friendly countries that look at Saudi as a reliable partner, like Pakistan.” On Barrick’s dispute in Mali, where this month the group suspended operations at its Loulo-Gounkoto mine after the military government seized gold bars at the complex, Bristow said the company had made a proposal to the junta and was “absolutely committed to finding a solution”. He declined to discuss details.

[Riaz Haq]

Barrick Looks Into Portfolio Optimization, Sees Pakistan As 'The New Frontier'

https://www.benzinga.com/news/guidance/25/01/43093586/barrick-looks...

Barrick is considering divesting from Zaldivar in Chile, evaluating its output and future capex.
The firm focuses on large-scale projects, with Pakistan’s $74 billion Reko Diq at the frontline.

Barrick Gold is reshaping its portfolio in 2025, looking to prioritize high-value, large-scale projects. Although this strategy reminds of its main competitor, Newmont, which prioritizes Tier 1 assets, Barrick still aims to profit from copper tailwinds, finding growth outside its core commodity.

As part of this strategy, the company is considering divesting its 50% stake in the Zaldivar copper mine in Chile, co-owned with Antofagasta. Zaldivar produced 80,000 tons of copper in 2024, but its relatively small scale and significant future investment requirements have prompted Barrick to explore potential buyers.

At the moment, Barrick's efforts focus on the Reko Diq copper and gold project in Pakistan, one of the largest undeveloped copper-gold resources globally. CEO Mark Bristow highlighted the opportunity in a recent interview for the regional media outlet Dawn.

"It couldn't be better positioned as timing goes, as quality goes. All our test work shows it is probably going to be right up there in quality of concentrate among the best copper mines in the world, "he said.

Reko Diq could generate around $74 billion in free cash flow over 37 years, with reserves extending beyond 50 years through planned expansions. The first phase of the project, involving an investment of $5.5 billion, is projected to produce 200,000 tons of copper concentrate and 250,000 ounces of gold annually starting in 2029.

A second phase, requiring an additional $3.5 billion, aims to double output to 400,000 tons of copper and 500,000 ounces of gold annually.

The project has attracted significant interest from global investors, notably Saudi Arabia's Manara Minerals, a joint venture between the state-owned mining company Ma'aden and the Public Investment Fund. Discussions between Manara and the Pakistani government are ongoing, with Saudi officials wanting to invest within the next two quarters. While Barrick is open to collaboration, the company has clarified that it will not dilute its equity in the project.

Reko Diq is strategically important due to its rich copper deposits and potential to supply critical metals for the global shift toward electrification and renewable energy.

However, operating in Balochistan presents challenges. The region is known for political instability, underdeveloped infrastructure, and security risks, which could complicate project execution and deter foreign investment.

Despite the hurdles, Bristow remains optimistic about the project.

"If we prove that we can do it, which I have no doubt that we'll definitely do, that'll attract some of the big copper players to Pakistan, and that's why I refer to it as the new frontier of mining, "he noted.