Pakistan’s Finance Minister Miftah Ismail and Barrick President and CEO Mark Bristow announced plans to restart the Reko Diq project, one of the world’s largest undeveloped copper-gold deposits. An agreement in principle reached between the government of Pakistan, the provincial government of Balochistan and Barrick earlier this year paved the way for the project restart, which has been on hold since 2011. It will be operated by Barrick and owned 50% by Barrick, 25% by Balochistan and 25% by Pakistani state-owned enterprises.

The Reko Diq project is located in the Tethyan Belt, a mineralized zone that extends from Eastern Europe to Southeast Asia. Several major copper and gold mines that are similar geologically to Reko Diq have been successfully developed and operated along the Tethyan Belt. The Reko Diq project itself is comprised of 14 porphyry deposits. The historical resource for five of the porphyry deposits totaled about 3 billion metric tons (mt) grading 0.48% copper and 0.26 g/mt gold in measured and indicated category, and 2.9 billion mt at 0.35% copper and 0.18 g/mt gold in inferred category (100% basis).

The definitive agreements underlying the framework agreement are currently being negotiated by teams from Barrick and Pakistan. Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process that could take two years. Construction of the first phase will follow that with the first production of copper and gold expected in 2027-2028.

Subject to the updated feasibility study, Reko Diq is envisaged as a conventional open pit mining and milling operation, producing a high-quality copper-gold concentrate. It will be constructed in two phases, starting with a plant that will be able to process approximately 40 million mt/y of ore which could be doubled in five years. Total mine life is estimated at 40 years.

An $11 billion penalty levied against Pakistan by a World Bank arbitration court and other liabilities will be waived reportedly and Barrick and its partners will invest $10 billion in the project.

“Even before construction starts, once the legalization process has been completed, we will implement a range of social development programs, supported by an upfront commitment to the improvement of healthcare, education, vocational training, food security and the provision of potable water,” Bristow said. “Social contributions are currently estimated to amount to around $70 million over the construction period, including upfront commitments of up to $3 million in the first year following closing and up to $7 million in year two.”

In addition, he said Reko Diq will advance royalties to Balochistan of up to $5 million in the first year following closing, up to $7.5 million in the second and up to $10 million per year thereafter until commercial production starts, subject to a cumulative $50 million maximum of advance payments.