Under the agreement, Barrick Gold has a 50% share of the gold mine, the Balochistan government has 25% and the remaining 25% will be shared by state-owned enterprises including OGDCL, PPL and GHPL.
Chief Executive Officer (CEO) of Barrick Gold Corporation Mark Bristow expressed confidence that his company would start ‘potential production’ from the Reko Diq mine, one of the world’s largest undeveloped copper-gold deposits in Balochistan, by 2027-28.
Addressing a news conference, he said the company would initially make around $7 billion investment in two phases, creating more than 75,000 job opportunities for developing the mine that had the potential to produce 400,000 tons of copper annually when the second phase was finished.
Subject to the updated feasibility study, he said Reko Diq was envisaged as a conventional open pit and milling operation, producing a high-quality copper-gold concentrate. “It 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.”
With its unique combination of large scale, low strip and a good grade, he said the Reko Diq would be a multi-generational mine with a life of at least 40 years.
During peak construction, he said the project was expected to employ 7,500 people and once its production started, it would create 4,000 long-term jobs. “Barrick’s policy of prioritizing local employment and suppliers will have a positive impact on the downstream economy.”
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Sharing details of the project, he said it was contemplated to be constructed in two phases subject to an updated feasibility study, with the additional opportunity of phase 3, adding “The current conceptual mine plan is based on four porphyry deposits within the Reko Diq project area, located in the Tethyan Belt, a highly prospective tectonic –magmatic and metallogenic belt extending from Eastern Europe to Southeast Asia.”
The CEO said several major copper and gold mines that were geologically similar to Reko Diq had been successfully developed and operated along the Tethyan belt.
Mark Bristow briefed the media that efforts were underway to update the historical 2010 feasibility study, focusing on both de-risking key technical areas like power, water and management and performing trade-off studies on key topics to better understand available options for Reko Diq.
“We have completed a number of site visits and are engaged with the government of Balochistan. We are working with the current chief minister for the completion of the transition process,” he said.
He said the company was already in process of constituting the feasibility-study team and long-term management- team, besides employing a number of Balochi and Pakistani executives and “we will continue to grow our team as we progressed towards finalizing the agreement.”
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The CEO said the company was floating tenders for acquiring the engineering skills, “Though we construct our mines we need draftsmen and technical competence of big engineering firms because there are so many engineering decisions to make”.
He said all the geological data was available; and now the company was working on social plans and environmental issues, besides preparing to ensure value-added water resources within the region. “This is our short-term pathway with specific milestones and five to six years’ plan with the production of the copper concentrates,” he said, adding “Final feasibility study to be completed by 2024.”
Answering a question, he cited the example of a mine developed by the company in Congo with 95 per cent employees of its nationals. “What we want the people to come from the [local] communities and go back to their communities every night. Then, we have real ownership and 24/7 coverage of operations as it is just a good business.”
“We don’t have substantial disagreements with the parties involved in this discussion and I will be going tomorrow with my team to Quetta and will be having meetings with the Balochistan government. It is my commitment to the people of Pakistan that we want to be completely transparent in the whole process.”
Under the agreement, Barrick Gold would be the operator of the Reko Diq mine with 50 per cent share, 25 per cent by the Balochistan government and 25 per cent by Pakistan’s state-owned enterprises including Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL).
The CEO said he had a meeting with Finance Minister Miftah Ismail and discussed different aspects of the Reko Diq project in detail. The two sides reiterated the commitment to develop the Reko Diqit as a world-class mine that would create value for Pakistan and its people through multiple generations.
He said the ‘definitive agreements’ underlying the framework agreement were currently being finalized by teams from Barrick and Pakistan. “Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years.”
Following the completion of the feasibility study update, a formal decision for the construction would be made by 2024.