Barrick Gold Seeks $7 Billion Investment to Revive Reko Diq Mining Project in Pakistan

Barrick Gold Seeks $7 Billion Investment to Revive Reko Diq Mining Project in Pakistan

For three decades, international mining companies have grappled with officials and local communities over a desert region surrounding an extinct volcano in Pakistan’s western province of Balochistan, a region prone to insurgency and often neglected, as reported by the Financial Times.

Now, after resolving years of legal disputes, Barrick Gold is planning a $7 billion investment to revive the Reko Diq mining project, which experts believe holds one of the world’s largest untapped reserves of copper and gold. Barrick, in partnership with Pakistani authorities, asserts that Reko Diq will not only mark Pakistan’s largest foreign fixed investment but also provide a crucial source of copper, a key component in the global energy transition, at a time when global supplies are struggling to meet demand.

“Reko Diq is one of the bigger copper-gold undeveloped projects in the world,” stated Mark Bristow, CEO of Barrick. The company aims to commence mining in 2028, pending an ongoing feasibility study. Bristow emphasized the significance of any copper mine amid the current supply challenges.

The project underscores how the copper deficit is driving mining companies to explore increasingly complex markets in search of supply. Pakistan’s recurring political and economic challenges have deterred most foreign investors, and previous attempts by Barrick to mine Reko Diq had been blocked by local authorities.

Balochistan, Pakistan’s most impoverished province, shares borders with Afghanistan and Iran and is grappling with a protracted conflict involving militants, partly motivated by alleged exploitation of the region’s mineral wealth. Bristow contends that the project, in which Barrick holds a 50% stake alongside the Pakistan and Balochistan governments, will bring much-needed development to the area.

“As countries transition to clean energy sources, copper—vital for electricity transport—will become increasingly important to the global economy. However, with supply from established mines in countries like Chile and Peru slowing, analysts at CRU Group estimate that $118 billion in investment by 2030 is needed to fill the looming supply gap, equivalent to 35 Reko Diq-sized projects.”

Bristow, known for his ventures in riskier markets like Mali and the Democratic Republic of Congo, acknowledges that Reko Diq adds “a lot of uncertainty” for Barrick investors but asserts that the company is no stranger to frontier jurisdictions.

Furthermore, the presence of a new investor, Saudi Arabia’s Public Investment Fund and state mining company Ma’aden, expressing interest in a stake, could provide stability. Analysts suggest that involvement from one of Pakistan’s significant allies would help safeguard the project against future political reversals.

If successful, the Reko Diq mine could transform Barrick into one of the world’s largest copper producers—a strategic diversification for gold miners like Barrick, aligning with investor interests focused on environmental, social, and governance issues, given that gold does not play a role in the energy transition.

Reko Diq is situated along the largely untapped South Asian segment of a rock formation extending from Europe to Southeast Asia, believed to harbor substantial copper deposits. Analysts see potential for additional mines in the region. Former Pakistan planning minister Ahsan Iqbal, who worked on the project, believes that Reko Diq will “put Balochistan on the mining map of the world.”

However, the project’s turbulent history symbolizes the challenges faced by foreign investors in Pakistan. Australia’s BHP initially secured an exploration deal for the site in 1993, before Barrick, in a joint venture with UK-listed Antofagasta, which operates copper mines in Chile, eventually took on the project.

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