Canada-based Barrick Gold again bids for $7 billion copper mine project in Pakistan

Barrick Gold Corp.’s first crack at building a copper mine in Pakistan was thwarted when the government denied it permits. A decade later, the company is making another — much bolder — attempt. The Toronto-based miner laid out revised plans for developing the giant Reko Diq copper-gold deposit in a desert region close to the borders of Iran and Afghanistan.

The conceptual design calls for the $7 billion project to be built in two phases, with each able to process about 40 million metric tons of ore a year and production starting as soon as 2027, Barrick said in a presentation on its website. The latest plan is double the annual throughput capacity and more than twice the investment estimated in a 2010 feasibility study.

The Pakistan project would have an annual production of about 200,000 tonnes of copper. The project is strategic as the world faces a shortfall of a commodity that’s key to the clean-energy transition, given how much is used in electric vehicles and renewable energy.

In addition, mines are getting trickier and pricer to build throughout the world with political risk on the rise, even in traditionally safer nations like Chile and Peru. As a result, Pakistan looks relatively less risky, just as a new centrist prime minister takes office.

Pakistan is now a 50% partner in Reko Diq, a type of arrangement that Barrick also had to adopt in Papua New Guinea, and one that gives host nations a more direct interest in seeing projects succeed. Barrick plans a full update of the Reko Diq feasibility study following last month’s agreement with Pakistan.

The latest design shows a mine life of 40-plus years, compared to the 56 years identified in the 2010 study that pegged initial costs at $3.3 billion. Barrick also sees the project in southwestern Balochistan as “a springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt.” The company expects to close a definitive agreement with Pakistan in the second half and complete the feasibility update in 2023-2024. In the meantime, Barrick and its partners are seeking to raise “limited” recourse financing for the first phase.

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