Fate of Barrick’s $7B project in Pakistan to be decided next week

Barrick Gold (TSX: ABX; NYSE: GOLD) will hear next week whether it can proceed with its $7 billion Reko Diq copper-gold project in Pakistan, close to the borders of Iran and Afghanistan.

The country’s Supreme Court, which has been tasked with ensuring the project is in line with Pakistan's constitution and laws, finished its due diligence on Wednesday. The final verdict, however, won’t be announced until next week.

The Reko Diq project, which hosts one of the world’s largest undeveloped copper-gold deposits, has been on hold since 2011 due to a dispute over the legality of its licensing process.

Barrick solved the long-running dispute earlier this year, reaching a preliminary out-of-court deal that cleared the path for a final agreement on how to run the mine and profit-sharing arrangements.

A favourable court decision is vital to secure  the parliament backs the project, which is the final approval Barrick would need to kick off construction at Reko Diq.

The proposed mine would be one of the largest foreign investments in Pakistan and one of Barrick’s key projects for this decade.

The Canadian gold giant plans to deliver production as early as 2027-2028 from Phase 1 at a cost of around $4 billion, with Phase 2 to follow in five years at a cost of roughly $3 billion.

The conceptual design calls for an open pit with a life of more than 40 years. It would be built in two phases, starting with a plant that will be able to process about 40 million tonnes of ore per annum, which could be doubled in five years.

The latest plan is double the annual throughput capacity and more than twice the investment estimated in an unpublished 2010 feasibility study.

During peak construction, the project is expected to employ 7,500 people and once in production it will create 4,000 long-term jobs during the expected 40-year life of the mine. 

Pakistan is now a 50% partner in Reko Diq — 25% held by the Balochistan Provincial Government and 25% by Pakistani state-owned enterprises.

Barrick has adopted a similar model before, in Papua New Guinea. This type of arrangements give host nations a more direct interest in seeing projects succeed.

For more information, visit www.Barrick.com.

THIS ARTICLE WAS ORIGINALLY POSTED ON MINING.COM