Canada-based Barrick Gold Corp. and Chile’s Antofagasta had suspended work on the Reko Diq mine in the impoverished southwestern Balochistan province in 2011 after Pakistan refused to grant them a license to develop the project, leading to a decadelong legal battle.
Pakistani Prime Minister Imran Khan’s office said in a statement that under the new agreement signed with Barrick on Sunday, the nearly $11 billion penalty slapped against Pakistan by a World Bank arbitration court would be waived.
Barrick will invest nearly $10 billion in Balochistan and it will create more than 8,000 jobs, noted the statement issued after the signing ceremony in Islamabad. It added that about $1 billion of the investment would go into building roads, schools, hospitals and the creation of technical training institutes for mining in the sparsely populated Pakistani region.
"The new project company shall be owned 50% by Barrick Gold. The remaining 50% shareholding shall be owned by Pakistan, divided equally between (the) federal government and the provincial government of Balochistan," Khan’s office said.
Federal Minister of Energy Hammad Azhar later told a news conference that the landmark $10 billion investment “will represent the single largest investment” in Pakistan.
Khan said in a tweet the Reko Diq project “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,” he said.
Barrick said in a press release the deal would now grant the company a mining lease, exploration license and surface rights. It noted that the project “hosts one of the world’s largest undeveloped open pit copper-gold porphyry deposits.”
“This is a unique opportunity for substantial foreign investment in the Balochistan
province and will bring enormous direct and indirect benefits not only to this region but also to Pakistan for decades to come,” said Mark Bristow, the president and chief executive officer of the Toronto-based company, who led his delegation at Sunday’s signing ceremony in the Pakistani capital. He added that Reko Diq could be in production within five to six years.
Antofagasta announced separately that 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.
Barrick and Antofagasta jointly discovered the vast Reko Diq mineral deposits more than a decade ago at the foot of an extinct volcano in Balochistan, saying they had invested $220 million.
The largest, natural resources-rich Pakistani province sits at the country’s borders with Iran and Afghanistan.
