Canada’s Barrick Gold has agreed to restart the Reko Diq gold and copper mining project in Pakistan, following ten years of legal battles and negotiations.
An agreement has now been signed by the Canadian mining firm with the governments of Pakistan and Balochistan province on a framework, which enables recommencement of the project.
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Claimed to host one of the largest undeveloped open-pit copper-gold porphyry deposits in the world, the Reko Diq mine was suspended in 2011 following the rejection of a development licence by the Pakistani Government to project partners Barrick and Antofagasta.
Barrick will own a 50% stake in the reconstituted gold and copper project while the remaining 50% stake will be held by Pakistan stakeholders.
Of the interest to be held by Pakistani stakeholders, 10% will be a free-carried, non-contributing share held by the Balochistan government, 15% will be held by a special purpose company owned by the Balochistan government and 25% by other federal state-owned enterprises.
In accordance with the out-of-court deal, the $11bn penalty imposed by a World Bank arbitration court on Pakistan in 2019 and other liabilities will be waived, reported Reuters.
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By GlobalDataPakistan Finance Minister Shaukat Tarin said that Barrick and its partners are expected to invest $10bn in the project.
Barrick president and chief executive officer Mark Bristow said: “This is a unique opportunity for substantial foreign investment in the Balochistan province and will bring enormous direct and indirect benefits not only to this region but also to Pakistan for decades to come.
“In addition to local employment and skills development, local procurement, infrastructure upgrades and improved medical and education systems, Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt.”
Barrick also signed a separate agreement in principle under which Chilean firm Antofagasta plans to exit from the mining project and will be replaced by Pakistani parties.
Antofagasta plans to focus on copper and byproducts production in the Americas.
In a press statement, Barrick said: “Barrick will be the operator of the project, which will be granted a mining lease, exploration licence, surface rights and a mineral agreement stabilising the fiscal regime applicable to the project for a specified period.”
