What's new

Reko Diq Project News and Updates

ghazi52

PDF THINK TANK: ANALYST
Joined
Mar 21, 2007
Messages
101,953
Reaction score
106
Country
Pakistan
Location
United States
,..,.,

Reko Diq project reconstituted, first production expected in 2028​

Barrick Gold says 7,500 jobs expected during peak construction, 4,000 long-term jobs in production phase



News
December 16, 2022

569780-RekoDiqphotofilex-1372449253.jpg



Canadian mining firm Barrick Gold Corporation (BGC) on Friday said that it had completed the reconstitution of one of the world's largest undeveloped copper-gold projects after receiving nods from Pakistan's top court and parliament.

On Thursday, Pakistan inked the final deal with Barrick and Antofagasta PLC representatives in London to revive the Reko Diq mining project and settle a long-running $11 billion dispute. The development came after the government received a ‘favourable opinion' from the Supreme Court on the settlement agreement and required legislation was passed into law.

Following the agreement, Reko Diq will be owned 50% by Barrick; 25% by three state-owned enterprises — the Oil and Gas Development Company Limited (OGCDL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL); 15% by Balochistan on a fully-funded basis and 10% by the province on a free-carried basis.

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

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

“With its unique combination of large scale, low strip and good grade, Reko Diq is expected to have a life of at least 40 years. We envisage a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate. We expect it to be constructed in two phases with a combined process capacity of 80 million tonnes per annum," he said.

Bristow said that Reko Diq would not contribute to Pakistan’s economy, but also have a transformative impact on the underdeveloped Balochistan province, with 7,500 jobs expected to be created during peak construction and around 4,000 long-term jobs once it reaches the production phase.

“We’re making sure that Balochistan and its people will see these benefits quickly. Starting early next year, Barrick will implement a range of social development programs prioritizing the improvement of healthcare, education, vocational training, food security and the provision of potable water. Our investment in these is expected to amount to around $70 million over the feasibility and construction period," he said.

"In addition, Reko Diq will advance royalties to the government of Balochistan of up to $50 million until commercial production starts.”

The developments come after the Foreign Investment (Promotion and Protection) Bill, 2022, flew through the parliament on Monday, as the National Assembly and Senate gave their approval to it. The legislation guaranteed protection for foreign investment in connection with the Reko Diq project.

As the sword of heavy financial penalties hanged on its head, the government moved with lightning speed to solicit its allies’ support to pass the bill through parliament. The ruling alliance, while bulldozing concerns raised by some allies, managed to put parliament’s rubber stamp on the bill on the grounds that the country could not afford to miss the December 15 deadline and face billions of dollars in penalties.


 
,..,

SOEs in Reko Diq deposit $562.5m​

Amount deposited in escrow account which will be paid for dispute settlement

Correspondent
December 17, 2022


998915-DollarsforeignexchangereservesPHOTOAFPx-1448535848.jpg



KARACHI:
Pakistan’s three state-owned entities (SOEs), having 25% stake in Reko Diq project in Balochistan, have deposited $562.5 million in an escrow account after signing a final agreement “with respect to the SOEs’ participation in the reconstituted Reko Diq project, according to a bourse filing on Friday.

The amount deposited in the escrow account is to be paid for implementing an out-of-court dispute settlement with Tethyan Copper Company – a consortium of Barrick Gold Corporation of Canada and Antofagasta of Chile – in respect of the Reko Diq Copper-Gold Project in the Chagai district of Balochistan, it was learnt.

Published in The Express Tribune, December 17th, 2022.
 
,..,,.

The govt must move on and make the best use of the reconstituted Reko Diq deal

Reko Diq agreement

Editorial
December 17, 2022


CAUGHT between a rock and a hard place, the government has made a choice in the $11bn dispute with regard to the Reko Diq gold and copper project that some would applaud, and others criticise.

The final deal, signed with the Canadian mining giant Barrick Gold and its Chilean partner Antofagasta, for reviving the project and resolving the dispute, has been presented as the only way out of a situation which had negatively impacted Pakistan’s standing as an investment-friendly nation.

In fact, had the agreement been negotiated a little more meticulously, the authorities might also have secured commitments from Barrick to set up a refinery at Chagai to ensure transparency in what, and how much, will be mined and shipped out of the country.

Still, it is to be hoped that all parties involved — Barrick, the centre and Balochistan — will agree on a mechanism to dispel anxiety and ensure that no stakeholder — especially Balochistan’s people — is cheated out of their share when precious metals are taken out of the country in raw form.

That said, the new deal appears to be a big improvement on the past when international investors held 75pc of the total shareholding in the project that is billed to be potentially the world’s largest gold and copper mine, with deposits capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for nearly 50 years.

Under the new agreement finalised after 10 years of legal battle, Barrick will get half of the project ownership, with Balochistan and three federal state-owned firms 25pc each of the remainder.

The agreement will help Pakistan avoid $11bn in fines ordered by the international arbitration court against its decision to deny the joint venture of Barrick and Antofagasta the licence to develop Reko Diq. Islamabad will, however, pay $900m to Antofagasta, which is exiting the project, to purchase its shareholding.

Although the Balochistan government is on board with Islamabad on the agreement, some Baloch nationalist parties like the BNP-M — and even the JUI-F — do not seem happy with it, and the way the government rushed the Foreign Investment (Promotion and Protection) Bill, 2022, through parliament to guarantee the protection of foreign investment in connection with Reko Diq to meet the Dec 15 deadline for signing it.

There’s no doubt that the reconstituted deal is mostly tilted in favour of the investor. But as they say a bird in hand is worth two in the bush; it’s time to move on and make the best use of the pact.

The project will bring significant growth opportunities to Balochistan by creating jobs, promoting the regional economy and increasing investment in healthcare, education, vocational training, food security and the supply of potable water.

It is, however, also time for our policymakers to build institutional capacities to craft international agreements to protect the interests of the country, and not the investors.

Published in Dawn, December 17th, 2022
 
,.,.,.

TURNING A PAGE IN THE REKO DIQ SAGA​

The case has been an apprehension for foreign investors and an embarrassment for local companies & govt officials.

BY HASNAAT MALIK |
DECEMBER 18, 2022


ISLAMABAD:
Last week’s Supreme Court judgement in the presidential reference by the larger five person bench headed by Chief Justice Umar Ata Bandial and comprising Justice Ijaz ul Ahsan, Justice Munib Akhtar, Justice Yahra Afridi and Justice Jamal Khan Mandokhail announced its 13-page opinion last week after more than a dozen hearings.

Moreover, the passage of the Foreign Investment Bill 2022 also symbolises a positive step forward just when the country perhaps may be in need of one.

The Reko Diq project promises nearly $10 billion worth of investment in the province of Balochistan and will also focus on social uplift initiatives in particular such as roads, schools, hospitals and creation of technical training institutes for mining. The investment is estimated to also create 8,000 new jobs.
 
,.,.

The timeline of the initiation of work on gold and copper mines in Reko Diq in Balochistan’s Chagi district has yet to be announced. But with the Supreme Court clearance and adoption of the relevant resolutions in Sindh and Balochistan and the ratification of the deal by the federal cabinet and Senate, all roadblocks in making the deal operational have been removed.

Both Sindh and Balochistan assemblies invoked Article 144 of the Constitution. Under Article 147, the provinces surrendered their rights to regulate the mineral resources in favour of the federal government. This allows the federal government to be fully responsible for regulating all affairs (excavation, processing, production and logistics) concerning the Canadian mining giant Barrick Gold in Pakistan. The 38-page long document entitles the federal government to provide all the incentives it deems suitable.

“The investors are legally covered to their satisfaction now, and for all I know, the work on the project will commence within months ahead”, a private source who assisted the federal government in designing the settlement deal with the foreign mining company said when approached for comments.

“It is an exciting moment for the mining sector. Besides massive capital investment, the reputed mining company will introduce cutting-edge technology and processes to enrich the collective knowhow in this crucial sector,” said another executive of a local mining firm hoping for some form of engagement in the project.
 
.,.,

‘First production from Reko Diq mine expected in 2028’​

Barrick Gold, CM Bizenjo sign agreement; initial payment of $3 million to be received this month

APP
January 16, 2023

Barrick Gold Corporation Chief Executive Mark Bristow said that the company had set 2028 as the target for starting the first production from the giant copper-gold mine Reko Diq in Balochistan.

It was also planning to complete the Reko Diq feasibility study update by the end of 2024, said Mark Bristow in a statement issued on Monday.

The chief executive’s statement came in the backdrop of the completion of the legal processes and definitive transaction agreements last month.

According to the press release, Reko Diq will be operated by Barrick, which owns 50% of the project, with Balochistan holding 25% and three Pakistani state-owned enterprises sharing the remaining 25%. The shareholding structure is in line with Barrick’s policy of benefit-sharing partnerships with its host countries.

As part of a three-day project review that started in Quetta, Bristow, accompanied by senior Barrick executives, met with Balochistan Chief Minister Abdul Quddus Bizenjo and other provincial leaders to brief them on the extensive social and economic development opportunities that would be generated by the mine, which is expected to have a life of at least 40 years.
 
.,.,
Gold Corporation has paid the first $3 million to the Balochistan government under the new Reko Diq agreement.

Reko Diq Pakistan Country Manager Ali E Rind presented a US$ 3 million check to Saidal Khan Luni, Secretary Mines & Minerals Development Department of the Government of Balochistan
Besides today’s news of dollar inflows into the country, the new Reko Diq agreement ensures that benefits from the project begin to accrue to the people of Balochistan through advanced royalties and social development funds, well before the mine begins production.

During peak construction, the project is scheduled to employ roughly 7,500 people, and once operational, it is expected to create approximately 4,000 long-term jobs
 
Back
Top Bottom