LAWRIE WILLIAMS: Barrick moves closer to developing Reko Diq copper-gold mega project
The long disputed Reko Diq project in Balochistan in the northwest corner of Pakistan close to the Iran and Afghanistan borders, and one of the world’s largest undeveloped copper-gold ore deposits is moving ever closer to production by the world’s second largest gold miner, Barrick Gold. The company’s president and chief executive Mark Bristow says the process of completing the final agreements and legal steps that would enable the development of the project, located in one of the most physically inhospitable parts of the world, is indeed now making steady progress after a long hiatus period.
Once the transaction is completed, Reko Diq will be owned 50% by Barrick, 25% by the Balochistan province and 25% by major Pakistani state-owned enterprises. The process of ownership has not been without considerable legal wrangling, and despite the undoubted potential benefits of exploiting the large low grade porphyry deposit believed to contain total mineral resources of 5.9 billion tons of ore with an average copper grade of 0.41 percent and gold grade of 0.22 g/tonne, Barrick will be facing an enormous logistical, security, political and physical task in maintaining the operation
The economically mineable portion of the deposit has preliminarily been calculated at some 2 billion tonnes, with an average copper grade of 0.53 percent and gold grade of around 0.3 g/tonne, with an annual production estimated at 200,000 tonnes of copper and 250,000 ounces of gold contained in 5-600,000 tonnes of concentrate. All this will be subject to an updated feasibility study, of course.
Bristow was speaking after a four-day visit to Pakistan during which he and the project team held discussions with prime minister Shehbaz Sharif and Balochistan chief minister Abdul Quddus Bizenjo and their teams, as well as the state-owned partner companies. With the approval of Pakistan president Dr Arif Alvi, the necessary documents for the Presidential Reference were filed on Saturday with the country’s supreme court, which Bristow describes as a significant process milestone.
During the course of the trip, the Barrick team also visited Balochistan’s Chagai District, which hosts Reko Diq, to brief local leaders and community stakeholders on the project, which he reckons will bring enormous benefits to the region in the form of employment, skills and economic development, as well as community initiatives focused on food security, environmental management and access to healthcare, education and potable water. Barrick will have work to do in convincing locals that this is the case as other major projects in Pakistan have often seemed to have passed local communities by, although may have benefited others further afield.
Bristow’s original company, Randgold, does however, have a good track record of passing on long term benefits to local communities in Africa and he says Barrick is already setting up community development committees (CDCs) to identify priority projects and supervise their implementation.
“Barrick has been built on successful partnerships with our host countries, and these encompass the full range of stakeholders, from governments through suppliers to the communities around our mines. Our CDC model provides a transparent and accountable mechanism for tailoring development programmes to the needs of these communities with their full participation,” he says.
Once the current legal processes have been finalised, Barrick will complete its update of the feasibility study, which currently envisages an open-pit operation with a life of more than 40 years. It is envisaged that the project will be built in two phases at an initial estimated capital cost of approximately $US7 billion and is expected to go into production between 2027 and 2028.
While in Pakistan Bristow announced that Barrick was donating an additional $150,000 to the Balochistan flood relief fund, bringing the company’s total contribution to $300,000.
17 Oct 2022 | Categories: Gold