TORONTO (miningweekly.com) – Miners Barrick Gold and Antofagasta have finalised a feasibility study into the Pakistani Reko Diq copper/gold project, and will reach a decision with the government whether or not to develop it next month.

Tethyan Copper - jointly owned by Canada's Barrick and Chile's Antofagasta - holds 75% of the project and the Balochistan provincial government owns the remaining 25%.

"The feasibility study has been fully handed over by the manager of the joint venture (JV) to both partners (the government of Balochistan and Tethyan Copper) on August 26," Tethyan CEO Gerhard von Borries told Mining Weekly Online at the weekend.

"According to the JV agreement between the government of Balochistan and Tethyan, the final date for the JV partners to make the decision to participate or not in the mining venture is November 24."

Earlier this year, reports said the Balochistan government had threatened to cancel the licence for Reko Diq and build the project itself. Barrick and Antofagasta said at the time they had not been notified of any change.

The dispute centred on a copper smelter the government wanted Tethyan to build at Reko Diq, which it refused to do.

This month, Chilean vice Foreign Minister Fernando Schmidt Ariztia met with Pakistani petroleum and Natural Resources Minister Syed Naveed Qamar to discuss, among other things, the Reko Diq project.

"Since this is a very important investment by a Chilean mining company, the issue of the Reko Diq project was raised in these meetings. The Chilean government has been very supportive to us from the beginning," Von Borries said.

He added that talks between Tethyan and the Balochistan have been "progressively positive and constructive".

Local media in Pakistan reported in July that Barrick CEO Aaron Regent and Von Borries met with Prime Minister Syed Yousaf Raza Gillani.

Once an investment decision is reached, it would take time to raise financing and sign construction contracts for the $3,3-billion project - one of the biggest foreign investments in Pakistan to date.

In July, Regent said it would be "a couple of years" before the partners could start building the project.

Van Borries said "a significant period of more than one year" would be required to raise the necessary project financing before construction began. He previously told Mining Weekly Online the mine could be in commercial production within four years of an agreement being reached with the Balochistan provincial government.

The feasibility study envisioned a mine with a yearly output of about 270 000 oz of gold and 400-million to 426-million pounds of copper in the first five years.

Barrick, the world's biggest gold miner, and Antofagasta bought Tethyan from BHP Billiton in 2002.

Balochistan is the poorest province in Pakistan, accounting for less than 5% of the nation's gross domestic product, despite it taking up 43% of the land mass.

Chinese state-owned China Metallurgical Group has built the Saindak copper mine in Balochistan. The Chinese also built the Gwadar deep-sea port on Pakistan's western coast.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.