Faiza Tehseen

The revival of Reko Diq copper-gold project is a huge development in the mineral sector that will invite foreign direct investment in Pakistan to help boost different sectors of the economy, Muhammad Yaqub Shah, acting member of the Sectoral Council for Marble, Granite, and Minerals, Ministry of Finance, told WealthPK. “In Reko-Diq, at least 200 mineralized centres of concentration exist in an area of about 200 square kilometres. These centres comprise porphyry-related masses of copper and gold. Geologically, Reko Diq lies in a relatively under-explored area (falls in the Chagai volcanic belt of Tethyan magmatic arc). This arc hosts a wide variety of world-class deposit types other than copper and gold, i.e., molybdenum, silver, carbonate-hosted copper-zinc, and lead-zinc deposit,” he said. Yaqub said Reko-Diq has over 4 billion tons of copper ore with a cut-off grade of about 0.7% copper.

The working initiative at this spot took place in 1993 and USD400 million was spent on different exploration activities. During the completion course, a section of about 94,000 meters was drilled in shape of 500 boreholes. Different working bodies carried out exploration in this area: i.e., in 1993, Broken Hills Proprietary (BHP), Australia, and Balochistan Development Authority (BDA) joined a venture or Mincor Alliance to carry out exploration in an 8,000 sq. km area for copper, gold and other associated minerals. According to the agreement, the Government of Balochistan was entrusted with 25% free carry-forward interest rate till the end of the feasibility study. Furthermore, Yaqub, who also served as GM Geology at Islamabad-based Pakistan Mineral Development Corporation (PMDC), said the BHP spent USD8 million in the leased-out area near Reko-Diq by March 2000 but it was considered an insufficient reservoir for commercial exploitation.

So, the Mincor Alliance took a step forward. At this stage, the BHP signed a USD1.7 million agreement as a seed capital with Tethyan Copper Company (TCC) Ltd. In 2006, both Mincor and BHP transferred their joint shares in the TCC to Antofagasta of Chile and Barrick Gold of Canada having an equal value of 37.5% respectively. The combined market capitalization of the new partners is worth US$30 billion. The TCC decided to develop a mega project worth US$5-6 billion with a capacity to yield 450,000 tons of copper concentrate by the year 2014 commissioning more than US$1 billion worth of export per annum. The company invested US$400 million for multiple exploration activities. It was estimated that the mine in its life span of about 40 years will generate great revenues for the governments of Pakistan and Balochistan with respective shares of USD3.5 billion and USD4.5 billion.

However, after comprehensive work, the project encountered some legal issues. In short, after crossing long legal hurdles, the project is operational now and Barrick Gold, a globally reputed mining company, is working on the project with the collaboration of government agencies. The project timelines are March 2022 (Agreement in principle); first half of 2022 (Definitive and other agreements); second half of 2022 (legislation and closing); 2023-2024 (Feasibility study); and 2025-2027 (Project Development and Construction). Pakistan hosted its first-ever joint conference on the mining and mineral sector recently, where experts and stakeholders from various countries and regions gathered to exchange ideas. The conference was a collaborative effort by Inter Services Public Relations, Barrick Gold and Petroleum Division.

Credit: INP-WealthPk