QUETTA: The federal and Balochistan governments signed an agreement on Reko Diq with the Canadian company Barrick Gold on Thursday, days after the Supreme Court endorsed a settlement to resume mining at the site located in Chagai district.

The agreement will take effect on Dec 16 (today) and the company will start work on the project with immediate effect.

In a statement issued late on Thursday night, the Balochistan government termed the agreement historic and the country’s biggest investment accord.

“After signing the Reko Diq agreement, the $6.5 billion fine imposed by an international court has become ineffective,” the statement added. Representatives of Barrick Gold Corporation and the federal and Balochistan governments signed the agreement at a ceremony attended by senior officials.

Canadian firm starts updating plans for mine after ‘favourable opinion’ from SC; Antofagasta exits project

One of the largest undeveloped copper-gold projects in the world, Reko Diq is owned 50pc by Barrick; 25pc by three federal state-owned enterprises; and 15pc and 10pc by Balochistan on a fully funded basis and free carried basis, respectively.

‘Favourable opinion from SC’

Barrick Gold also confirmed the development, saying it had completed the reconstitution of the Reko Diq project after “having received a favourable opinion from the Supreme Court of Pakistan and the required legislation having been passed into law”.

Barrick president and chief executive Mark Bristow said the completion of the legal processes was a key step in progressing the development of Reko Diq into a “world-class, long-life mine which would substantially expand the company’s strategically significant copper portfolio and benefit its Pakistani stakeholders for generations to come”, the company said in a statement on Thursday.

“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for the first production,” Mr Bristow said.

Antofagasta exits Reko Diq

Meanwhile, Antofagasta Plc said on Thursday it had exited the Reko Diq project as Barrick Gold Corp updated its plans for the mine, according to Alliance News equities news service.

Antofagasta, a London-based mining company, said the project had been reconstituted under Tethyan Copper Co Pty Ltd, a joint venture registered in Australia held equally by Antofagasta and Barrick Gold.

It said a consortium of “various Pakistan state-owned enterprises” had acquired shares in the Tethyan Copper Co subsidiary, which holds the project.

The proceeds of the sale, which together equals $945 million, will be held by Tethyan Copper. Antofagasta expects to receive the proceeds by the end of 2023.

While Antofagasta retains its shareholding in Tethyan Copper until the proceeds are distributed, it “will cease to have any appointees on the board and will no longer be involved in the business of TCC”.

Published in Dawn, December 16th, 2022