ISLAMABAD: Barrick Gold has ended a long-running dispute with Pakistan and will now start to develop one of the world’s biggest gold and copper mining projects under an agreement signed on Sunday.
Under the out-of-court deal, an $11 billion penalty slapped against Pakistan by a World Bank arbitration court and other liabilities will be waived and Barrick and its partners will invest $10 billion in the project, Minister for Finance Shaukat Tarin said.
The Reko Diq project in Balochistan — which hosts one of the world’s largest undeveloped copper and gold deposits and is capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century — was suspended in 2011 after the government denied Toronto-based Barrick Gold and Chile’s Antofagasta a licence to develop it.
Barrick said in a statement it will operate the project which will be granted a mining lease, exploration licence and surface rights.
In a separate statement, Antofagasta said it had agreed to exit the project as its growth strategy was now focused on the production of copper and by-products in the Americas.
“The new project company shall be owned 50 percent by Barrick Gold. The remaining 50 percent shareholding shall be owned by Pakistan, divided equally between Federal Government and the provincial government of Balochistan,” a statement from the office of Prime Minister Imran Khan said after the signing ceremony in Islamabad.
The remaining 50% shareholding shall be owned by Pakistan, divided equally between Federal Government and the provincial government of Balochistan.
— Prime Minister’s Office, Pakistan (@PakPMO) March 20, 2022
According to Bloomberg, public shareholders will include:
- A 10 percent free-carried, non-contributing share held by the government of Balochistan.
- An additional 15 percent held by a special purpose company owned by the government of Balochistan.
- 25 percent owned by other federal state-owned enterprises.
In the original agreement, the equity sharing between Tethyan Copper Company (TCC) and the government was to be 75 percent and 25 percent respectively, although that agreement was never reached because the Supreme Court struck down the grant of a mining lease in 2013.
The Barrick-Antofagasta joint venture discovered the vast mineral deposits more than a decade ago at the foot of an extinct volcano in Balochistan.
It claimed it had invested more than $220 million.