After more than 10 years of dispute, Barrick Gold has come to a deal in principle with the governments of Pakistan and the province of Balochistan to restart the Reko Diq gold and copper project.
The project, which will now be held by Barrick and Pakistan stakeholders in a 50%-50% split, has been on idle status since 2011 due to a licensing process disagreement. Of the latter’s interest, it will be split 10% free-carried and non-contributing by the government of Balochistan, 15% by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises.
Barrick will serve as operator of Reko Diq, which will now be granted its mining lease, exploration licence, surface rights and mineral agreement for a finite period. The process of the deal, it added, will be completely transparent and involve the federal and provincial governments as well as the Supreme Court of Pakistan.
“If the definitive agreements are executed and the conditions to closing are satisfied, the project will be reconstituted, including the resolution of the damages originally awarded by the International Centre for the Settlement of Investment Disputes and disputed in the International Chamber of Commerce,” according to Barrick President and CEO Mark Bristow.
Reko Diq is said to be one of the world’s largest undeveloped open pit copper-gold porphyry deposits.
Bristow called the new agreement an “important step” for the project and “a tribute to the decisions of all parties to work towards a mutually beneficial outcome in a spirit of partnership.”
He also called it a unique opportunity for substantial foreign investment in Balochistan.
“[It] will bring enormous direct and indirect benefits not only to this region but also to Pakistan for decades to come,” he noted. “Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt.”
Once the deal has Barrick confirmed it will update the project’s feasibility and expansion feasibility studies from 2010 and 2011, respectively, to determine if findings match the prior expectation of a conventional truck-and-shovel open pit operation with comminution and flotation processing facilities.
Should that work go to plan, Bristow said Reko Diq could be in production within five to six years.