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Tuesday, July 16, 2024

Barrick to restart one of world’s largest gold mining project within Pakistan

The new Reko Diq project company shall be owned 50% by Barrick Gold and 50% by Pakistan. $10b will be invested which will help extract gold and copper reserves from one of the largest reserves in the world.

Barrick Gold (ABX.TO), has ended a long-running dispute with Pakistan and will now start to develop one of the world’s biggest gold and copper mining projects under an agreement signed on Sunday.

Under the out-of-court deal, an $11 billion penalty slapped against Pakistan by a World Bank arbitration court and other liabilities will be waived and Barrick and its partners will invest $10 billion in the project, Pakistan Finance Minister Shaukat Tarin said.

The Reko Diq project in southwestern Pakistan, which hosts one of the world’s largest undeveloped copper and gold deposits, was suspended in 2011 after Pakistan denied Barrick Gold and Chile’s Antofagasta (ANTO.L) a licence to develop it.

Read more: Breakthrough: Pakistan to get 50% share in Reko Diq?

Barrick said in a statement it will operate the project which will be granted a mining lease, exploration licence and surface rights.

In a separate statement, Antofagasta said it had agreed to exit the project as its growth strategy was now focused on the production of copper and by-products in the Americas.

“The new project company shall be owned 50% by Barrick Gold. The remaining 50% shareholding shall be owned by Pakistan, divided equally between Federal Government and the provincial government of Balochistan,” a statement from the office of Prime Minister Imran Khan said after the signing ceremony in Islamabad.

The Barrick-Antofagasta joint venture discovered the vast mineral deposits more than a decade ago at the foot of an extinct volcano in the Balochistan region on Pakistan’s borders with Iran and Afghanistan.

Read more: Learning from Reko Diq: Mining Natural Resources & Maintaining Sovereignty?

It said it had invested more than $220 million.

Reuters with additional input by GVS News Desk