If everything goes as per plan, the Reko Diq project could be brought into production by Barrick Gold within five to six years
Barrick Gold is set to restart the Reko Diq project, which involves the development of an open pit copper-gold porphyry asset in Pakistan’s Balochistan province.
In this connection, the Canada-based gold miner has reached an agreement on a framework with the Pakistani and the Balochistani governments. The framework provides for the reconstitution of the Reko Diq project.
The copper-gold porphyry project was suspended in 2011 because of a row over the legality of its licensing process.
The Pakistan government has agreed to an out-of-court deal with Barrick Gold and will waive penalties of $11bn, reported Dawn.
Barrick Gold will hold a stake of 50% in the reconstituted project.
The remaining 50% will be held by Pakistani stakeholders. Of this, 10% free-carried, non-contributing share will be held by the Balochistani government, a 15% stake will be with a special purpose company owned by provincial government, and 25% will be owned by other Pakistani state-owned enterprises.
If everything goes as per plan, the Reko Diq project could be brought into production within five to six years, said the Canadian miner.
Barrick Gold president and CEO Mark Bristow said: “Barrick has successfully partnered with host countries worldwide and our philosophy of sharing the economic benefits our mines generate equitably with core stakeholders is also evident in the ownership structure of the new Reko Diq.
“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.”
Barrick Gold has also announced a separate agreement that provides for its partner Antofagasta to be replaced in the Reko Diq project by the Pakistani parties.
The operator of the project will be Barrick Gold. The company will be issued a mining lease, exploration licence, surface rights as well as a mineral agreement.
After finalising the agreements, the Canadian miner will begin a full update of the 2010 feasibility and 2011 expansion prefeasibility studies of the projects. The two studies called for a traditional truck-and-shovel open pit operation with comminution and flotation processing facilities to produce a high-quality copper-gold concentrate.
The Pakistani government has been quoted by the country’s Press Information Department, as stating: “This project shall make Balochistan the largest recipient of foreign direct investment in Pakistan and the Reko Diq project shall be one of the largest copper and gold mining projects in the world.
“To ensure optimal utilisation of nation’s mineral wealth the government is also considering setting up a smelter.”