The cost estimate for the initial phase of Pakistan’s Reko Diq copper and gold mining venture has jumped 58 percent to $6.8 billion, government officials confirmed yesterday. This $2.5 billion increase follows a comprehensive feasibility study conducted by Barrick Gold, the Canadian mining giant that controls half the project.
Despite the substantial cost revision, authorities remain optimistic. They point to climbing global copper and gold prices that should offset the additional investment over time. The 30-year mining operation is expected to generate $7.1 billion in royalties and taxes for Pakistan’s federal and provincial governments, complemented by dividends from their 50 percent ownership stake.
The updated financial blueprint allocates $5.566 billion for mine development and infrastructure, with an additional $1.199 billion earmarked for interest payments and inflation-related expenses during construction. Officials note that the project’s second phase will be self-sustaining, funded entirely through revenue from mining operations.
This massive undertaking represents a partnership between Barrick Gold and several Pakistani entities. The Canadian firm holds 50 percent ownership, while the Balochistan government controls 25 percent. The remaining quarter is divided among state-owned enterprises including Pakistan Petroleum Limited, Oil and Gas Development Company Limited, and Government Holdings Private Limited.
The Economic Coordination Committee recently approved the revised financial structure, formalizing funding commitments from all Pakistani partners. Pakistan Minerals Private Limited will contribute $1.879 billion, while Balochistan Mineral Resources Limited will invest $1.128 billion. To minimize strain on national resources, the federal government plans to secure financing from commercial banks with backing from international export credit agencies.
Reko Diq stands among the world’s largest undeveloped mineral deposits. Economic experts view its development as transformative for Pakistan’s economy, promising substantial revenue streams, job creation, and increased foreign investment in the mining sector. Government officials describe it as a strategic asset, particularly valuable for addressing the country’s foreign exchange challenges.
The project has weathered significant legal complications, including a protracted dispute with Barrick Gold and Antofagasta PLC. A December 2022 settlement allowed work to resume, with Antofagasta exiting in exchange for a $900 million payment from Pakistani entities. This resolution has restored investor confidence and established a framework for future development.
With the ECC’s approval secured, petroleum and finance ministries have been instructed to finalize agreements and financing arrangements promptly. The comprehensive development plan for Reko Diq is scheduled for approval in April 2025, after which construction will begin.
Once operational, the mine is projected to yield approximately 200,000 tons of copper and 250,000 ounces of gold annually. Revenue will be distributed among all stakeholders, with significant portions benefiting the Balochistan government and local communities.
