The groundbreaking partnership agreement among Barrick, the federal government of Pakistan and the provincial government of Balochistan should unlock the enormous value of Reko Diq, one of the world’s largest undeveloped copper and gold deposits.
President and Chief Executive of Barrick Gold Corporation, Mark Bristow said this in a statement issued to TLTP on Wednesday.
Speaking on an investor call, Bristow said the project represented a unique mining opportunity, which would be a major addition to Barrick’s Tier One1 asset base, while also bringing significant economic and social benefits to Pakistan and Balochistan.
The agreement in principle recently reached between the parties provides for the reconstitution and restart of the project, which has been on hold since 2011. It will be operated and owned 50% by Barrick, 25% by Pakistani state-owned enterprises and 25% by the government of Balochistan. The company has similar partnerships in other countries which have proved to be catalysts in developing local economies.
Bristow said following the finalization of the underlying agreements, legalization and closing, Barrick would update the 2010 feasibility study. “Reko Diq’s fundamentals have not changed materially since then. Subject to the updated feasibility, it is still envisaged as a conventional open pit and milling operation producing a high-quality copper-gold concentrate. We are planning a two-phase construction approach, starting with an approximately 40 million tonne per annum plant, which could be doubled within five years. The staged development will optimize returns, manage upfront capital, lower execution risk and bring forward production and cash flows in the long run. If all goes according to plan, we anticipate first production in five to six years’ time,” he said.
“Offering a unique combination of large scale, low strip and good grade, Reko Diq will be a multi-generational mine, with a life of at least 40 years. The contemplated mine plan is based on four porphyry deposits within our land package and our exploration licence area holds additional deposits with future upside potential.”
Noting that since 2010 there had been game-changing technological advances in renewable energy alternatives, some of which are particularly well-suited to the area, Bristow said a Barrick team was already assessing various solar, wind and battery configurations to maximize the mine’s renewable power generation. This could also deliver a range of economic and operational benefits.
The development of Reko Diq will make Balochistan the largest recipient of foreign investment in Pakistan. During peak construction periods, the project is expected to employ 7,500 people and once in production will create about 4,000 long-term jobs. Barrick’s policy of prioritizing local employment and suppliers will have a positive downstream impact on the local economy.
“At Barrick we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities. That’s why we wanted Balochistan’s share of the venture to be fully funded, 10% by the project and 15% by the government of Pakistan. It’s equally important to us that Balochistan and its people should see the benefits from day one. Even before construction begins, we will be implementing a range of social development programs, supported by upfront commitments to the development of the skills required for mining, the improvement of education, healthcare, food security and, importantly, access to potable water in a region where the groundwater has a high saline content,” Bristow said.
