Barrick Gold has projected that the extraction of metals in the Reko Diq Copper and Gold Project will begin in 2028 and its feasibility study will be finalised by the end of next year.
Talking to a select group of journalists, Barrick Gold Corporation President and Chief Executive Mark Bristow revealed that following the completion of legal processes and definitive transaction agreements with Pakistan and Balochistan governments last month, the company planned to finish the Reko Diq project’s feasibility study update by the end of 2024.
Year “2028 is targeted for first production from the giant copper and gold mine in Balochistan province,” he announced and described the project as “a significant new frontier of gold and copper in the world”.
Barrick Gold will complete the project in two phases. In the initial phase, it will reset the feasibility study consisting of legal, financial and environmental documents.
The CEO recalled that they had completed the feasibility study with previous partners back in 2013.
“We have checked resources of this project, which are reliable, and the key thing to complete is to finalise the geotechnical work around the deposits,” he said. “We need to continue the investment we have already started. This is one principle.”
Power, water and infrastructure are the other key components that will assist the first optimal step of production. A social and environmental base line study will also be conducted.
“We have a lot of data regarding environmental study. We want to refresh and validate the data in line with best international standards,” he emphasised.
Regarding the construction phase, the CEO pointed out that it would take around three years starting 2025 and they expected to make first production in 2028.
“Copper is promising a transition to clean energy around the world, therefore we need a lot of copper, which is the base of all electronics,” he said. “Renewable resources and industry need more copper. If you want to develop cities, copper is a fundamental thing.”
Regarding government’s assurances, the company CEO pointed out that they had signed an agreement during Imran Khan’s government, adding that Sharif’s administration also delivered and signed a framework agreement, which “is a positive thing”.
In the project, Balochistan has been recognised as a significant stakeholder. Barrick Gold has a similar situation in Tanzania, where it has re-engaged with authorities with 50-50 partnership.
Voicing hope that the Reko Diq project would benefit everyone, Bristow disclosed that they had invited Balochistan leadership to visit some of their operations in Africa.
He boasted that for the first time they had concluded agreements with all stakeholders. “We also took the agreements to the Supreme Court and made them public to ensure transparency.”
Regarding project financing, the CEO said that leading financial institutions had indicated that they would finance the project, which would require $7 billion.
Out of the total, $4 billion will be needed in first phase whereas $3 billion will be injected in second phase. Fifty per cent of funding will be arranged through equity whereas the remaining 50% will be debt.
Pakistan’s government has granted 15-year tax exemption to the project. However, Bristow added that they would pay royalty to Balochistan and invest in local community to execute different water and educational projects.
According to a statement, Reko Diq will be operated by Barrick Gold, which owns 50% of the project, with Balochistan holding 25% shareholding and three Pakistani state-owned enterprises sharing the remaining 25%. The shareholding structure is in line with Barrick’s policy of benefit-sharing partnerships with its host countries.
As part of a three-day project review that began in Quetta, Bristow, accompanied by senior Barrick executives, met with Balochistan Chief Minister Abdul Quddus Bizenjo and other provincial leaders.
He briefed them on the extensive social and economic development opportunities that would be generated by the mine, which was expected to have a life of at least 40 years.
After the meeting, Bristow and Balochistan chief minister signed a memorandum of agreement, which specified a timetable for the disbursement of committed funds to the province, including advance royalty and social development financing.
It will ensure that the people of Balochistan start reaping benefits of the project well before the mine goes into production. The agreement provides for an initial payment of $3 million this month.
Barrick is working to set up community development committees to identify priority projects focused on food security, environmental management and access to education, healthcare and potable water.
Published in The Express Tribune, January 17th, 2023.
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