Reko Dik Baluchistan
The Reko Diq project has been restored, the first production is expected in 2028
Canadian mining company Barrick Gold Corporation (BGC) on Friday said it had completed the reconstruction of one of the world's largest undeveloped copper and gold mining projects after receiving approval from the supreme court and Parliament of Pakistan.
On Thursday, Pakistan signed a final agreement with representatives of Barrick and Antofagasta PLC in London to revive the Reko Diq mining project and settle a long-standing dispute worth $11 billion. This happened after the Government received a "favorable opinion" of the Supreme Court on the settlement agreement and the necessary legislative acts were adopted as law.
According to the agreement, 50% of Reko Diq shares will belong to Barrick; 25% - to three state—owned enterprises - Oil and Gas Development Company Limited (OGCDL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL); 15% - to Balochistan on a fully funded basis and 10% from the province on a free basis.
In a statement, Barrick President and CEO Mark Bristow said the completion of legal processes is key to turning Reko Diq into a "world-class, long-life mine" that will significantly expand the company's copper mine portfolio and "benefit its Pakistani shareholders for future generations."
“We are currently updating the feasibility study of the project for 2010 and the feasibility study of the expansion for 2011. This should be completed by 2024, and the first production is scheduled for 2028,” said Bristow.
“Thanks to the unique combination of large scale, low bandwidth and good quality, the service life of the Reko Diq is expected to be at least 40 years. We assume the open pit operation using excavators and processing facilities producing high-quality copper-gold concentrate. We expect it to be built in two stages with a total production capacity of 80 million tons per year," he said.
Bristow said Reko Diq will not contribute to Pakistan's economy, but will also have a transformative impact on the underdeveloped Balochistan province, where 7,500 jobs are expected to be created during the peak of construction and about 4,000 long-term jobs once it reaches the production phase.
“We make sure that Balochistan and its residents quickly see these advantages. Starting early next year, Barrick will implement a number of social development programs, giving priority to improving health, education, vocational training, food security and drinking water. It is expected that our investments in them will amount to about $ 70 million during the feasibility study and construction period," he said.
"In addition, Reko Diq will pay up to $50 million in royalties to the Balochistan Government before commercial production begins.”
The events occurred after the Foreign Investment (Promotion and Protection) Bill 2022 passed through Parliament on Monday, when the National Assembly and the Senate approved it. The legislation guaranteed the protection of foreign investments in connection with the Reko Diq project.
When the sword of heavy financial sanctions hung over his head, the government quickly enlisted the support of its allies to get the bill through parliament. The ruling alliance, despite the concerns expressed by some allies, managed to impose a "rubber stamp" of parliament on the bill on the grounds that the country cannot afford to miss the December 15 deadline and face billions in fines.
Balochistan will receive 32 billion dollars for 47 years from Reko Dick
ISLAMABAD: A lawyer representing the Balochistan government told the Supreme Court on Wednesday that the province will receive $32 billion over 47 years from the Reqo Dik project.
Salahuddin Ahmed further informed a panel of five judges headed by the Chief Justice of Pakistan (CJP) Umar Ata Bandial, after hearing the presidential recommendation on the project, that 25% of the revenue generated from the gold mining project belongs to the provincial government.
Of these 25% shares, 15% will belong to the holding and the Balochistan offshore company, he added.
Salahuddin further informed the court that the Balochistan government would receive 25% of the capital, 5% of royalties, as well as corporate social responsibility facilities and jobs.
C.J.P. Bandial asked when the project would be completed.
The lawyer replied that it would take 2.5 years to prepare a feasibility study of the project.
He added that work on the Reko Diq project will begin in the next five years after that.
The lawyer told the court that companies from China, Japan and Russia also applied for help in the country for the Reko Diq project. However, he added that these companies were not willing to pay the $9 billion fine imposed on Pakistan.
Judge Ijazul Ahsan asked how the case against Pakistan was going at the International Dispute Resolution Center and the International Criminal Court.
Salahuddin replied that the International Dispute Resolution Center had filed a case against the Government of Pakistan for breach of contract.
In the International Criminal Court, he added, the Balochistan government faced a case of violation of the agreement.
The lawyer warned that if Pakistan does not sign the agreement by December 15, the affected company will sue the country.
Judge Yahya Afridi asked about the lease of other minerals that will be mined in Recodica, in addition to gold and copper.
The lawyer replied that the lease rights to all minerals extracted in Recodica, except for gold and copper, also belong to Barrick Gold Corporation.
CJP asked whether the financial transactions related to the Reko Diq agreement will be of an international nature.
The lawyer replied that financial transactions on the project will be carried out through offshore companies.
As time was running out, the hearing was postponed until Thursday (today).
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