Barrick Gold to start development work on $7bn Reko Diq project in August

Jul 19, 2022: Chief Executive Officer of Barrick Gold Corporation Mark Bristow and Chief Minister Balochistan Mir Abdul Quddus Bizenjo on Tuesday unveiled that the development work on the Reko Diq mine project initially starting with $7 billion will commence in August 2022.

Addressing a joint news conference here at CM Secretariat CEO Barrick Gold and CM Balochistan said the Reko Diq copper-gold project, a partnership between the company, the provincial government and Pakistan state-owned enterprises, would create substantial value for the province through multiple generations.

The Reko Diq mine project will be constructed in two phases, starting with a plant that will be able to process approximately 40 million tons of ore per annum which could be doubled in five years following first production from phase one.

With its 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.

Mark Bristow, CEO Barrick gold while giving details about the project said during peak construction the project is expected to employ 7500 people and once in production it will create 4000 long-term jobs. Barrack’s policy of prioritizing local employment and suppliers will have a positive impact on the local economy.

In the negotiations Barrick and the government of Pakistan had worked to ensure that Balochistan will receive a substantial share of the benefits generated by Reko Diq.

“Balochistan’s shareholding in Reko Diq will be fully funded by its partners and the federal government, which means that the province will reap the dividends, royalties and other benefits of its 25% ownership without having to contribute financially to the construction and operation of the mine.

CEO Barrick Gold noted that “It is equally important that Balochistan and its people should see these benefits quickly even before construction starts.

“Once the legalization process has been completed, we will implement a range of social development programs, supported by and upfront commitment to the improvement of healthcare, education, vocational training, food security and the provision of potable water,”.

About the company's social contributions, he said that social contributions are currently estimated to amount to around $70 million over the construction period, including upfront commitments of up to $3mnin the first year following closing and up to $7mn in year two,” he said.

In addition, Reko Diq will advance royalties to the government of Balochistan of up to $5mn in the first year following closing, up to $7.5mn in the second and up to $10mn per year thereafter until commercial production starts, subject to a cumulative $50mn maximum of advance payments.

Subject to the updated feasibility study, Reko Diq is envisaged as a conventional open pit and milling operation, producing a high-quality copper gold concentrate.

In the press conference, Balochistan Chief Minister Mir Abdul Qudous Bizenjo said that the federal government agreed with our proposals regarding the Reko diq project and Prime Minister Mian Shehbaz Sharif accepted all the demands protecting the rights of the people of Balochistan.

“On account of the favorable environment for investment in Balochistan, the international investors are ready to invest in the province,” he added.

CM however, noted that nothing related to the Reko diq project has been kept secret. Members of Provincial Assembly were briefed in camera for nine hours, while the political leaders including Sardar Akhtar Jan Mengal, Dr. Abdul Malik Baloch and Mehmood Khan Achakzai were also taken in loop about the Reko diq project.

Chief Minister Balochistan expressing his pleasure over the copper-gold project said that “today is a historic day when we are going to make important progress related to the Reko diq project."

“The government of Balochistan is cooperating with international companies, that are the reason why investors are turning to Balochistan,” he recalled.

About the possible positive impact of the Reko Diq project on the people of the province, he said that it is a guarantee for the bright future of Balochistan.

Balochistan will get 25% of the total income of the project, while ten million dollars will be given to Balochistan every year.

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