Barrick Gold said on Monday it was close to reaching a final framework agreement with the Pakistani government to develop the Reko Diq large copper-gold deposit near the border between Iran and Afghanistan.
The project, which has one of the world's largest undeveloped open-pit copper-gold deposits, has been shelved since 2011 due to controversy over the legality of its licensing process.
Earlier this year, Barrick settled the long-running dispute with a preliminary out-of-court deal that cleared the way for a final agreement on how to run the mine and share profits.
Barrick said the company and the Pakistani team are currently finalizing a framework agreement. "Once the necessary legalization steps have been completed and taken, Barrick will update the initial feasibility study, a process that is expected to take two years," the company said in a statement.
The miner noted that the first phase of construction will follow the study and is expected to produce copper and gold for the first time in 2027-2028. "During the negotiations, the federal government and Barrick confirmed that Balochistan (where Reko Diq is located) and its people, as part of a Pakistani ownership group, deserve the benefits they share fairly," barrick CEO Mark Bristol said.
Barrick CEO Mark Bristol
Balochistan's stake will be fully funded by the project and the federal government, allowing the province to receive 25% ownership dividends, royalties and other proceeds without having to fund the construction or operation of the project.
"It is also important that Balochistan and its people see these benefits from day one. Even before construction began," Said Mark Bristol.
Pakistan's finance minister, Ismail, said the development of Reko Diq is the largest foreign investment in Balochistan and one of the largest in Pakistan.
Barrick believes Thato Diq is one of the largest untapped copper-gold deposits in the world
Two phases of development
The concept design calls for the $7 billion (47.25 billion yuan) project to be built in two phases, each capable of processing about 40 million tons of ore per year, possibly doubling in five years. The latest plan is to double annual throughput, more than double the investment estimated in the 2010 feasibility study.
The first phase, at a cost of $4 billion, will cover the initial crushing, grinding and flotation circuits, is expected to come on stream in 2027-2028. The $3 billion second phase will include a parallel production line that will start more than five years after the first phase begins.
At the peak of construction, the project is expected to employ 7,500 people and, once put into production, will create 4,000 long-term jobs over the mine's lifespan of at least 40 years.
Some analysts believe that Pakistan's lack of experience and stability in mining makes the deal risky.
However, Bristol said in May that he had worked in a challenging environment all his life and that he was "very pleased" with the project.
He added that it was "a fantastic opportunity for the mining industry to show what it can bring to the economy of a region that is "neglected" and struggles to access drinking water".
Disclaimer: This article represents only personal views and is not intended as a reference for investment. Investment is risky, and you need to be cautious when entering the market.