Pakistan Revives Reko Diq: World's Largest Undeveloped Copper-Gold Deposit

[RiazHaq]

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's largest undeveloped copper-gold porphyry deposit. The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

Reko Diq Copper-Gold Mine

New Reko Diq Deal:

The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.

A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.

Production Targets/Social Infrastructure Projects:

When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.

The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.

Future Potential:

Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.

Foreign Direct Investment:

After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

 

[TheSnakeEatingMarkhur]

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's largest undeveloped copper-gold porphyry deposit. The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

​

Reko Diq Copper-Gold Mine

New Reko Diq Deal:

The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.

A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.

Production Targets/Social Infrastructure Projects:

When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.

The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.

Future Potential:

Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.

Foreign Direct Investment:

After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

One of the largest.

 

[RiazHaq]

Copper's contribution to Barrick's bottom line is increasing as Pakistan project revived
Reko Diq is one of the world’s largest undeveloped copper and gold deposits

Copper's contribution to Barrick's bottom line is increasing as Pakistan project revived

Reko Diq is one of the world’s largest undeveloped copper and gold deposits

financialpost.com

A 2010 feasibility study of Reko Diq estimated the site could contain as much 54 billion pounds of copper and 42 million ounces of gold. In its 2010 annual report, Barrick said it envisioned building a mine in Pakistan that would produce 100,000 ounces of gold and between 150 to 160 million pounds of copper on average each year over the first five years. A lot has changed since then, and Barrick said it would need to update its projections based on current market conditions.

Barrick, which has long derived its profits from gold, is increasingly looking at copper.

“Copper’s contribution to the bottom line is increasing,” chief executive Mark Bristow said repeatedly during the company’s fourth-quarter earnings call on Feb. 16.

----------

Reko Diq, which many investors and analysts forgot about after a contentious legal dispute halted the project in 2011, would require billions of dollars of investment to build and take many years to complete. But it could potentially give Barrick a shot in the arm: past studies indicated the site contains billions of pounds of copper and millions of ounces of gold, and could produce for multiple decades.

“It’s still really early, so it’s hard for us to say what this all looks like,” said Jackie Przybylowski, an analyst at BMO Capital Markets, who covers Barrick. “But I think it’s just an example of how mining companies are having to move more into different jurisdictions, and less obvious ones, or less common ones.”

After more than a decade of scouring the United States, Canada, Latin America and Australia, many mining companies are increasingly looking in countries and jurisdictions that are less connected to the Western economies.

Barrick has long had a diversified geographic portfolio; it now has projects in various states of development in Japan, Egypt, Saudi Arabia, Papua New Guinea and Pakistan.

Przybylowski also noted that increasingly, the largest gold miners are looking at copper. This is in part because copper demand is expected to grow as a result of increased electrification and the energy transition, but also because geologically, recent discoveries have shown that copper often occurs alongside gold in large scale deposits.

---------


“We have every intention of growing our business, both in copper and in gold — or in gold and then in copper,” said Bristow. “And the principle behind Barrick’s business philosophy is high-quality assets. That’s our focus. And so that’s what we’re hunting, whether it’s gold or copper.”

But he also said the company has invested to embed copper expertise in its exploration teams because the copper business had not always been so profitable in the past.

---------

Josh Wolfson, an analyst at RBC Capital Markets, wrote that the project could add at least two per cent to Barrick’s net asset value — based on the payout to Antofogasta, which was paid a reported US$900 million for its 37.5 per cent stake in the project.

The revival of Reko Diq marks a sharp reversal for a project that had been dropped from most of Barrick’s investor presentations years ago, only to resurface in 2019 when the World Bank’s International Centre for the Settlement of Investment Disputes ordered the Islamic Republic of Pakistan to pay US$5.83 billion to a Barrick Gold Corp. joint venture subsidiary for blocking the mining project.

The award included US$4.087 billion in damages, which the arbitrators calculated was the fair value of the Reko Diq project at the time of the arbitration and US$1.75 billion in ongoing interest, plus US$62 million in legal costs.

 

[khansaheeb]

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's largest undeveloped copper-gold porphyry deposit. The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

​

Reko Diq Copper-Gold Mine

New Reko Diq Deal:

The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.

A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.

Production Targets/Social Infrastructure Projects:

When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.

The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.

Future Potential:

Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.

Foreign Direct Investment:

After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

That's great news. They should also at the same time consider creating artificial lakes and reservoirs from the area where the Earth is removed.

 

[altafahmed]

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's largest undeveloped copper-gold porphyry deposit. The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

​

Reko Diq Copper-Gold Mine

New Reko Diq Deal:

The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.

A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.

Production Targets/Social Infrastructure Projects:

When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.

The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.

Future Potential:

Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.

Foreign Direct Investment:

After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Would it (copper and gold) be processed in Pakistan or would be moved out of Pakistan in raw form?

 

[RiazHaq]

Would it (copper and gold) be processed in Pakistan or would be moved out of Pakistan in raw form?

Pakistan government is considering setting up a smelter at Reko Diq. There's already one operating at Saindak.

 

[Vapnope]

In a fair world, the provincial government of that time would have been put behind jail and they would have been made to pay the penalty. Now the company will own 50% of the profit while federal and provincial govts will get 25% each. I feel terrible that mediocrity and criminal negligence is accepted in Pakistan.

 

[SoulSpokesman]

@RiazHaq

Brof sb,

Great news. You have been talking about Big R for almost 15 years now. But finally it maybe seeing the light of day. Better late than never.

@Vapnope

Now the company will own 50% of the profit while federal and provincial govts will get 25% each. I feel terrible that mediocrity and criminal negligence is accepted in Pakistan.

Nope. It is a good deal. Seldom do govts get a higher share of profits than what is being promised here.

Regards

 

[altafahmed]

Pakistan government is considering setting up a smelter at Reko Diq. There's already one operating at Saindak.

In Saindak they do not refine the raw material into gold and copper, they only separate it from rocks.

 

[doorstar]

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Balochistan have reached a deal to restart the Reko Diq mining project. Reko Diq is the world's largest undeveloped copper-gold porphyry deposit. The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Balochistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

​

Reko Diq Copper-Gold Mine

New Reko Diq Deal:

The new agreement to start Reko Diq waives the ICISD award. In the reconstituted project, Barrick will have 50% ownership and Pakistan 50%, comprising a 10% free-carried, non-contributing share held by the government of Balochistan, an additional 15% held by a special purpose company owned by the government of Balochistan and 25% owned by other federal state-owned enterprises. The federal government’s shares of 25% will be divided equally amongst three state-owned entities (SOE): Oil & Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). This is a huge improvement over the prior deal that gave the Balochistan government 25% stake in the project, with Tethyan holding the remaining 75%.

A separate agreement provides for Barrick’s partner Antofagasta PLC to be replaced in the project by the Pakistani parties, according to a statement released by Barrick Gold Corporation. Pakistan will buy out Antofagasta’s interest in the mine for $900 million, according to the two companies and the government.

Production Targets/Social Infrastructure Projects:

When the project goes into production in 5 or 6 years time of development, it will produce 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century. At current prices, the annual copper output will be $2 billion and gold output $500 million.

The project’s development will bring in investment of approximately $10 billion in Balochistan, including $1 billion which would be invested in social uplift projects such as roads, schools, hospitals, and the creation of a technical training institute for mining. The investment is also said to result in the creation of over 8,000 jobs, according to a report in The Express Tribune newspaper.

Future Potential:

Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.

“Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt,” said Barrick Gold CEO Mark Bristow.

Foreign Direct Investment:

After reaching a peak of over $5 billion in 2007, foreign direct investment (FDI) in Pakistan has plummeted. It is at least in part attributable to bad decisions by the Pakistan Supreme Court headed by Chief Justice Iftikhar Chaudhry. Cancellation of the Pakistan Steel Mills privatization by the Chaudhry court in 2006. That decision alone has cost Pakistani taxpayers $100 million a year. Then came the Chaudhry court's decision cancelling the Reko Diq license and the $6.5 billion award against Pakistan. These decisions had a chilling effect on foreign investment in Pakistan. Let us hope the revival of the Reko Diq project helps restore confidence of foreign investors in the country. Let us also hope that this history of unwise court decisions serves as a reminder to the Pakistani judiciary to be more careful in deciding such cases in future.

Related Links:

Haq's Musings

South Asia Investor Review

Shaukat Aziz's Economic Legacy in Pakistan

Saving Pakistan's Education, Steel Mill, Railway and PIA

Politics of Patronage Trumps Public Policy

Iftikhar Chaudhry Scared Away Foreign Investors

Musharraf Earned Legitimacy by Good Governance

Vindictive Judges Pursue Musharraf

Rare Earths at Reko Diq?

Riaz Haq's Youtube Channel

PakAlumni Social Network

Pakistan Revives Reko Diq: One of The World's Largest Undeveloped Copper-Gold Deposits

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

fake news unless you mean that same old contract that was struck down by that kana 'judge' has been restored on same old terms.

 

[CrazyZ]

Now the company will own 50% of the profit while federal and provincial govts will get 25% each. I feel terrible that mediocrity and criminal negligence is accepted in Pakistan.

BHP pays no royalties or taxes to the Indian governemnt to exctract Indian coal. @Vapnope Why is this criminal negligence accepted in India? Excerpt From BHPs 2021 earning report. Peru gets 36 billion in tax revenue.....Indian gets nothing. Even Japan gets more taxes and they don't even have minerals. Why......because it incourages investment, creates jobs and provides resources. There is more to gain then just a headline percentage.

 

[Indos]

BHP pays no royalties or taxes to the Indian governemnt to exctract Indian coal. @Vapnope Why is this criminal negligence accepted in India? Excerpt From BHPs 2021 earning report. Peru gets 36 billion in tax revenue.....Indian gets nothing. Even Japan gets more taxes and they don't even have minerals. Why......because it incourages investment, creates jobs and provides resources. There is more to gain then just a headline percentage.

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Can you please put the link on your post as well so we can study more on this number ?

 

[Indos]

From what I know, Indonesian number on that post :

23 percent is our corporate tax ( all companies will pay at that rate, despite for SME (small and medium size enterprise, the taxation is not that high )

+ Value added tax for each product sales (11 %)

For coal, we have coal levy as well, the rate now is about 28 % of the export figure and obligation to sell their coal domestically ( 30 % of total production ) at much lower price (70 USD per ton for state owned electricity company, PT PLN, and 90 USD per ton for whole industry- international price is now at 310 USD per ton) or face penalty

For chopper and gold and oil and gas, we have so call Government retribution that is quite big as well. For chopper and gold it is royalties and for oil and gas is another term that I forget ( but the essence is that for oil and gas, our government will have significant artificial stake on it despite is not part of the investor, the oil and gas company is regarded as operators only while Government who own the entire business )
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For Pakistani deal, I think that is already good. I believe the one who find the Gold mine is also those Westerners, not Pakistani

 

[CrazyZ]

Can you please put the link on your post as well so we can study more on this number ?

https://www.bhp.com/-/media/documents/investors/annual-reports/2021/210914_bhpeconomiccontributionreport2021.pdf

BHP globally pays 40.7% of its revenues in tax and royalties for its mining actvities. Pakistan getting 50% from Barrick is a good deal.

 

[CrazyZ]

For Pakistani deal, I think that is already good. I believe the one who find the Gold mine is also those Westerners, not Pakistani

Pakistan is full of armchair experts that know nothing about the realty but complain and sensationalize.