By Staff Reporter
ISLAMABAD: Barrick Mining Corp. and Pakistan are negotiating a significant upgrade to security arrangements at the Reko Diq copper-gold project in Balochistan, a move that is expected to drive up costs at one of the world’s largest undeveloped mineral deposits, according to senior officials.
A Barrick delegation arrived in Islamabad this week to review security protocols and procurement strategies at the project, which is structured as a joint venture with the federal and Balochistan provincial governments. Ahmad Hayat Lak, chief executive of Oil and Gas Development Company Ltd., a partner in the venture, confirmed the visit and said both sides were conducting a formal review mandated under the existing project agreement.
“The review will determine whether security needs to be enhanced and what additional financing may be required,” Lak told journalists, adding that under the agreement’s terms, responsibility for site protection rests solely with Pakistan as the host country.
The discussions reflect growing concern over the security environment in Balochistan, a mineral-rich but volatile province where separatist violence and militant attacks have repeatedly disrupted infrastructure projects and rattled foreign investors. Any increase in security outlays would add to the financial complexity of a project already requiring billions of dollars in capital investment before it produces its first pound of copper.
Barrick Executive Chairman John L. Thornton led a separate high-level delegation to Islamabad recently to meet with government officials and discuss both the security situation and procurement strategy, Petroleum Minister Ali Pervaiz Malik said. Malik described Barrick’s continued engagement as a vote of confidence in the project, noting it was “reassuring” that the Toronto-based mining giant remained committed despite what he called global and local headwinds.
The delegation also explored options for acquiring heavy-duty mining equipment through competitive bidding and examined ways to broaden the project’s lending and credit structures, according to the minister.
Lak said lenders have so far expressed satisfaction with existing security protocols. At a recent meeting in Canada, financiers indicated they had completed their own security due diligence prior to committing funds. He added that new lenders had shown interest in joining the project’s financing syndicate, a signal of continued institutional appetite for the venture despite its operational risks.
Reko Diq is operated by Reko Diq Mining Company, in which Barrick holds a 50% stake, with the remaining shares split equally between the federal government and Balochistan province. The project, located in Pakistan’s southwestern Chagai district near the Iranian and Afghan borders, holds an estimated 59 billion pounds of copper and 41.5 million ounces of gold, making it one of the most significant greenfield mining projects in the world.
The project has had a turbulent history. Pakistan’s Supreme Court voided an earlier mining lease in 2013, triggering an international arbitration claim by Barrick’s predecessor, Tethyan Copper Company, that resulted in a $6 billion award against Pakistan. A restructured agreement was eventually reached in 2022, resetting the project on new commercial terms and paving the way for the current development phase.
Copyright © 2021 Independent Pakistan | All rights reserved
