Barrick Gold will be allowed to resume work at project in Pakistan
Barrick Gold will be allowed to resume work at the Reko Diq project following an endorsement of a settlement between Pakistan and Barrick by Pakistan's Supreme Court.
The Reko Diq project is one of the world's largest underdeveloped sites of copper and gold deposits. Barrick said it will invest $10 billion to develop the project.
The endorsement was a condition of the settlement for Barrick to resume work on the project in the southwestern province of Balochistan, bordering Afghanistan and Iran.
Reuters reported that Chief Justice Umar Ata Bandial, the head of a five-judge panel, read out the operative part of the brief order in court.
“The agreements ... have not been found by us to be unconstitutional or illegal on the parameters and grounds spelt out,” read the order seen by Reuters.
President Arif Alvi had asked the court to review the deal.
In an out of court agreement this year, Barrick Gold ended a long-running dispute with Pakistan, and agreed to restart development.
Reuters reported that under the deal, the company withdrew its case in an international arbitration court, which had slapped a penalty of $11 billion on Pakistan for suspending the contracts of the company and its partners in 2011.
The company's license to mine the untapped deposits was cancelled after the Supreme Court ruled illegal the award granted to it and its partner, Chile's Antofagasta.
Antofagasta had agreed to exit the project, saying its growth strategy was focused on production of copper and by-products in the Americas.
Pakistan's mineral-rich province of Balochistan is home to both Islamist militants and separatist Baloch insurgents, who have engaged in insurgency against the government for decades, demanding a greater share of the region's resources.
Barrick plans to deliver production as early as 2027-2028 from Phase 1 at a cost of around $4 billion, with Phase 2 to follow in five years at a cost of roughly $3 billion.
The conceptual design calls for an openpit with a life of more than 40 years. It would be built in two phases, starting with a plant that will be able to process about 40 Mt/a (44 million stpy) of ore, which could be doubled in five years.
The latest plan is double the annual throughput capacity and more than twice the investment estimated in an unpublished 2010 feasibility study.
During peak construction, the project is expected to employ 7,500 people and once in production it will create 4,000 long-term jobs during the expected 40-year life of the mine.
Pakistan is now a 50 percent partner in Reko Diq — with 25 percent held by the Balochistan Provincial Government and 25 percent by Pakistani state-owned enterprises.
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