Reko Diq, which means 'sandy peak' in the Balochi language, is a small town in Chagai district in Balochistan, close to Pakistan’s border with Iran and Afghanistan, famous for its vast gold and copper reserves.
The mines are believed to have the world's fifth largest gold deposit -- various reports estimate their value between $500 billion and $1 trillion.
Last week, CEO of Canadian Barrick Gold Company, Mark Bristow, visited Balochistan and met with Chief Minister Mir Abdul Quddus Bizenjo to discuss the grandiose mining project. During his visit, Bristow said that the Reko Diq project is a national and valuable asset of Pakistan and Balochistan.
"It is our responsibility to make its benefits known to the people of Pakistan and Balochistan," he was reported as saying by Bol News.
Earlier, Bristow claimed that the first batch of copper and gold production from the project is expected to start in 2027-28, for which agreements are being finalized by the teams from Barrick Gold Corporation and Pakistan at the moment.
For his part, Quddus Bizenjo said that the provincial government had resolved all the political issues related to the Reko Diq agreement and that this venture will create employment opportunities for locals.
It is worth mentioning that such hype around Reko Diq is not a new development, as the region has been in the limelight for decades. Earlier this year, Pakistan's government claimed to have saved the country from a $11 billion penalty in the Reko Diq gold mining case and vowed to restart the project aimed at excavating huge gold and copper reserves alongside Barrick Gold.
Decade-Long Legal Battle
Back in 2006, Tethyan Copper Company (TCC) - a joint venture of Barrick Gold and Chile's Antofagasta mining company had been awarded a license to explore the Reko Diq area.
However, in 2011, the Balochistan government rejected TCC’s mining lease due to a dispute over the legality of its licensing process and decided to run the project on its own.
Following the dispute, TCC sued the Balochi government for $11 billion and in 2019, the World Bank's arbitration tribunal imposed a penalty on Pakistan for unlawful denial of mining.
In its 700-page ruling against Pakistan, the tribunal awarded a $4.08 billion penalty and $1.87 billion in interest. It was one of the largest fines imposed by the World Bank on a country.
The case between the Pakistan government and the TCC company continued for seven years.
When Imran Khan became prime minister, he actively pursued the case, and after almost a decade-long legal battle, Pakistani officials announced an out-of-court settlement with Barrick Gold in March 2022.
Era of Development & Prosperity
As a result, an agreement was signed under which the Antofagasta company will no longer participate in the project in exchange for a settlement of $900 million.
Barrick Gold and its partners will be a part of the mining project and will invest $7-10 billion into the Reko Diq project over the next ten years.
At that time, former Prime Minister Khan, congratulated the nation, especially the people of Balochistan, on the agreement for the development of the Reko Diq mine.
"I congratulate the nation and people of Balochistan on a successful agreement with Barrick Gold for development of the Reko Diq mine after 10 years of legal battles & negotiations. Penalty of approx $11bn is offset, $10bn will be invested in Balochistan creating 8,000 new jobs," he tweeted.
Khan added, "RD [Reko Diq] will potentially be the largest gold & copper mine in the world. It will liberate us from crippling debt & usher in a new era of development & prosperity," as reported by Dawn.
How Much Gold for Barrick Gold?
Under the newly agreed terms, Reko Diq will be owned 50% by Barrick Gold Corporation, 25% by Balochistan province and 25% by major Pakistani state-owned enterprises (SOEs).
According to Barrick Gold's assessment, Reko Diq will be a multi-generational mine with a life of at least 40 years.
Some reports suggest that Reko Diq contains 12.3 million tons of copper and 20.9 million ounces of gold. There is an abundance of 14 other minerals in the area. Hence, Reko Diq has the potential to be one of the world’s largest undeveloped copper projects.
During peak construction, the project is expected to employ 7,500 people and once in production of high-quality copper-gold concentrate, it will create an additional 4,000 long-term jobs.
Earlier, Barrick Gold's CEO mentioned that the successful start of the project will attract additional investment in the region, adding that they had a long history of working with the International Finance Corporation (IFC), a sister organization of the World Bank and member of the World Bank Group.
"We are negotiating with IFC and export-import banks for a $4 billion debt comprising fifty percent of the total debt. $2 billion will be secured by the project’s consortium," Pakistan Today reported him as saying.
Following Bristow's recent visit to Balochistan, the company announced on its official website that the process of completing the final agreements and legal steps that would enable the development of the Reko Diq project is making steady progress.
The company also announced that it is recruiting "a world-class team for the development of a world-class mining project."
The views expressed in this column are those of the author and do not necessarily reflect the position of Sputnik.