Pakistan’s Supreme Court has authorised a settlement between the country’s government and Barrick Gold to resume mining at its Reko Diq gold and copper project.
Located in the province of Balochistan, which borders Afghanistan and Iran, the Reko Diq project is said to host one of the world’s largest undeveloped copper-gold porphyry deposits.
The project was suspended in 2011 after the Pakistani government rejected Barrick and Antofagasta’s licence for the project.
Earlier this year, Barrick Gold ended the decade-long dispute with Pakistan by agreeing to restart developing the mining project under an out-of-court agreement.
The mining company has withdrawn its case from an international arbitration court, which imposed an $11bn penalty against Pakistan for suspending the contracts.
With the favourable court decision, the Canadian mining company can now secure parliamentary support, which is the final approval to start construction at Reko Diq.
The company aims to develop the project in two phases, starting with a plant that can process about 40 million tonnes of ore per annum, which could be doubled in five years.
The conceptual designs suggest an open pit with a life of more than 40 years.
Its latest plan is double the annual throughput capacity and more than twice the investment estimated in an unpublished 2010 feasibility study.
Barrick intends to start first phase production as early as 2027-2028, at a cost of around $4bn, with Phase 2 planned for the next five years, at a cost of around $3bn.
The project is expected to create 7,500 jobs during peak construction and will create 4,000 long-term jobs during the expected 40-year life of the mine.
Pakistan currently owns a 50% stake in the deposit, while the Balochistan Provincial government holds a 25% stake and Pakistani state-owned enterprises own the remaining 25% stake.
