Production from Reko Diq gold and copper mines in Balochistan to begin in 2028

The Canada-based Barrick Gold Corporation is targeting 2028 to start the extraction of metals from the Reko Diq gold and copper mines in Balochistan.

Talking to journalists, Barrick Gold Corporation President and CEO Mark Bristow said that after the completion of legal processes and signing of definitive agreements with the federal government and the provincial government, the company now plans to finalize the feasibility study of the Reko Diq project by the end of 2024.

Year “2028 is targeted for first production from the giant copper and gold mine in Balochistan province,” announced Bristow, while describing the project as “a significant new frontier of gold and copper in the world”.

Work on Reko Diq project begins

Barrick Gold on Sunday announced that it has formally commenced work on the Reko Diq project by establishing a project office in the provincial capital, Quetta.

“We have hired the best team of experts while locals are also working on the project,” said Bristow in a ceremony held at the Chief Minister’s secretariat on Sunday.

Chief Minister Mir Abdul Qudoos Bizenjo, Balochistan Assembly Acting Speaker Sardar Babar Musakhail, Opposition Leader Malik Sikander Khan, MPAs and cabinet members attended the ceremony.

Two-phase project

The Reko Diq project will be completed in two phases. The initial phase involves mainly the paperwork, whereas the second phase would be the construction phase.

In the first phase, the company will reset the feasibility study, comprising of legal, financial, and environmental documents, which they had initially completed with previous partners back in 2013.

“We have a lot of data regarding the environmental study. We want to refresh and validate the data in line with best international standards,” stresses Bristow.

Power, water, and infrastructure are the other key components of the first phase.

The second phase, expected to commence in 2025 could take around three years before the company could make its 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.”

Project shareholding

According to a statement, Barrick Gold owns 50% of the project, the Balochistan government holds 25% shareholding, while the remaining 25% is held by three Pakistani state-owned enterprises. The shareholding structure is in line with Barrick’s policy of benefit-sharing partnerships with its host countries.

Balochistan a key stakeholder

In the revised agreements, Balochistan has been marked as a significant stakeholder, said Bristow. He also announced that $3m will be transferred to the Balochistan government this month under the Tanjeel agreement relating to gold and copper reserves.

“We have not only come to invest in Reko Diq, but our priority is to open Balochistan to the world for investment,” he said.

The CEO, while hoping that the project would benefit all the parties involved, said that for the first time they had signed agreements with all stakeholders.

“We also took the agreements to the Supreme Court and made them public to ensure transparency.”

Project financing

When asked about project financing, Bristow said that leading financial institutions had committed to finance the $7 billion project. Half of the funding will be arranged through equity whereas the remaining 50% will be debt.

Out of the total $7 billion, the financers will inject $4 billion in the first phase whereas $3 billion will be secured in the second phase.

The Pakistan government has given a 15-year tax exemption to the Reko Diq project. However, Bristow said the company would pay royalty to the provincial government of Balochistan and invest in local community through different water and educational projects.

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