Reko Diq to pour $74bn into Pakistan’s gold market

November 26, 2025 (MLN): Pakistan’s long-awaited Reko Diq copper-gold project could inject up to $74 billion into the economy over its 37-year life cycle.

The massive project has the potential to transform the country’s gold ecosystem and reduce decades-long dependence on imported bullion, the Competition Commission of Pakistan (CCP) said in its first comprehensive assessment of the gold market.

The study notes that Pakistan’s gold value chain is overwhelmingly informal, with over 90% of trade occurring outside documented channels and prices largely set through opaque association-driven mechanisms.

With domestic consumption estimated at 60 to 90 tonnes annually, Pakistan relies almost entirely on imports, amounting to just $17 million in FY24, leaving the market vulnerable to smuggling, tax leakages, and volatility.

CCP’s analysis highlights Reko Diq as a structural breakthrough, capable of reshaping supply chains by providing a steady domestic source of gold, improving traceability, and supporting downstream industries such as refining, hallmarking, and jewelry manufacturing.

The report argues that local production could enhance market transparency, reduce illicit inflows, and support long-term sector formalization.

The commission said modernizing the gold market, through unified regulation, hallmarking, digital traceability, and data governance, will be critical to leveraging the economic opportunity created by Reko Diq’s commercial rollout.

The study, conducted by CCP’s Center of Excellence in Competition Law (CECL), maps a market historically dominated by informality, fragmented oversight, and pricing opacity.

The report identifies deep-rooted barriers that suppress competition and distort market functioning:

Informal market dominance: Weak documentation and cash-based transactions allow large informal networks to set prices and influence supply.

Opaque price-setting: Daily gold rates are largely influenced by associations rather than transparent market mechanisms.

Fragmented regulation: Overlapping and unclear mandates of Ministry of Commerce, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Pakistan Gems and Jewelry Development Company (PGJDC), and Trade Development Authority of Pakistan (TDAP) create policy inconsistencies and enforcement gaps.

High taxes and compliance costs: Complex procedures, and inconsistent taxation encourage smuggling and under-invoicing.

Limited refining, assaying and hallmarking capacity: Pakistan has negligible refining capability and inadequate assaying and hallmarking facilities, leading to widespread purity issues and weak consumer protection.

Data deficiencies: Absence of reliable import, traders registration, sales, and purity data prevents evidence-based policymaking.

To address these challenges, the CCP has proposed a comprehensive reform package:

• Establishing the Pakistan Gold & Gemstone Authority to harmonize rules, licensing, imports, and Anti Money Laundering (AML) and Counter Financing Terrorism (CFT) compliance.
• Mandatory assaying and hallmarking nationwide to ensure purity, protect consumers, and enable exports.
• Digital transformation of the gold value chain with blockchain-based traceability integrated with FBR’s Track & Trace system.
• Creation of a Gold Banking System, inspired by the Türkiye, Gold Banking System to mobilize household gold into the formal sector.
• Strengthen data governance through centralized reporting, market documentation, and scientific price-monitoring mechanisms.

CCP emphasizes that modernizing the gold sector will boost transparency, safeguard consumers, reduce illicit trade, and unlock significant economic value, particularly as Pakistan prepares for the commercial rollout of Reko Diq. 

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