Toronto-listed miner Barrick Gold has outlined a revised plan for the Reko Diq copper/gold project, in Pakistan, proposing a $7-billion investment over two phases in a project that could deliver its first gold in five to six years.
The new conceptual design, announced on Tuesday, comes as Barrick and the federal government of Pakistan and provincial government of Balcohistan reached an agreement to restart the project that has been on hold since 2011.
Barrick CEO Mark Bristow said that Reko Diq’s fundamentals had not changed materially since the 2010 feasibility study and that it was still envisaged as a conventional openpit milling operation, producing copper/gold concentrate.
However, the plan for Reko Diq is now a two-phase construction approach, starting with a 40-million-tonne-a-year plant, which could be doubled in five years. Phase 1 will cost $4-billion and Phase 2 a further $3-billion. The 2010 feasibility study contemplated a 40-million-tonne-a-year throughput, a mine life of 56 years and a capital investment of $3.3-billion.
“The staged development will optimise returns, manage upfront capital, lower execution risk and bring forward production and cash flow in the long run,” said Bristow.
If everything goes according to plan, Reko Diq will be in production by 2027 or 2028.
Barrick will start a full feasibility study update, based on the current conceptual design.
Bristow noted that, since 2010, there had been game-changing technological advances in renewable energy alternatives, some of which were particularly well suited to the area. Various solar, wind and battery configurations were being assessed.
Meanwhile, the agreement recently reached between Barrick and the Pakistani government provides for the reconstitution and restart of the project. It will be operated and owned 50% by Barrick, 25% by Pakistani State-owned enterprises and 25% by the government of Balochistan. The company has similar partnerships in other countries which have proved to be catalysts in developing local economies.
The development of Reko Diq will make Balochistan the largest recipient of foreign investment in Pakistan. During peak construction periods, the project is expected to employ 7 500 people and once in production will create about 4 000 long-term jobs.
“At Barrick we know that our long-term success depends on sharing the benefits we create equitably with our host governments and communities. That’s why we wanted Balochistan’s share of the venture to be fully funded, 10% by the project and 15% by the government of Pakistan. It’s equally important to us that Balochistan and its people should see the benefits from day one. Even before construction begins, we will be implementing a range of social development programmes, supported by upfront commitments to the development of the skills required for mining, the improvement of education, healthcare, food security and, importantly, access to potable water in a region where the groundwater has a high saline content,” Bristow said.