Reko Diq: Value of Pakistan's Copper Deposits Soars amid Surging Demand
By Riaz Haq
CA
The value of copper assets has surged 31.7% in the last six months, significantly surpassing the rise in tech stocks (20.2%) and gold (20%) during the same period.
The growing demand for copper is mainly driven by the rising adoption of green technologies such as electric vehicles and growth in AI (artificial intelligence) data centers using the latest Nvidia chips.
At current prices, the value of copper and gold deposits at Reko Diq in Baluchistan is nearly $200 billion.
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Comparing asset price appreciation over last six months -Wall Street Journal |
Interest in developing Pakistan's Reko Diq copper and gold mines has also grown with the widening gap between demand and supply of the metals. Dennis Mark Bristow, CEO of the Canadian mining giant Barrick Gold Corporation, has said the Reko Diq mining project in Baluchistan province is “absolutely on track” and would be able to begin production by 2028, according to news reports . Bristow said Reko Diq is an “enormous project” in which the company would be investing $10 billion.
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Growing copper supply-demand gap |
New infrastructure development is underway to connect Reko Diq with the national highway network. Barrick is building a link road to connect the mining project site with N-40 Quetta-Taftan National Highway. Similar infrastructure projects to support coal mining in the Thar desert have brought socioeconomic improvements and human development for the local villagers.
The Reko Diq project is expected to employ thousands of workers during and after completion. Barrick has interviewed over 3,000 applicants from universities across Pakistan and selected 9 Baloch citizens, four women and five men, according to Bristow. “And they are now working on our mines in Argentina and they will go through a program of development and gaining experience from all our different operations around the world,” Bristow said, saying 30 such graduates would be employed in training programs with the company by the end of the year. By Jan-Feb next year (2025), 1,200 people would be employed, which would increase to 6,000 by 2026. “By the time we peak production, we will have employed 10,000 people,” Bristow told Arab News.
Canadian mining giant Barrick Gold Corporation and the governments of Pakistan and Baluchistan reached a deal to restart the Reko Diq mining project back in March 2022 on former Prime Minister Imran Khan's watch. Reko Diq is the world's fourth largest undeveloped copper-gold porphyry deposit with over 14 million tons of copper (worth $142 billion at $9,464 per ton) and 21 million ounces (worth $50 billion at $2,367 per ounce) of gold.
The project was abandoned in 2011 after a Pakistan Supreme Court bench headed by former Chief Justice Iftikhar Chaudhry canceled the mining license granted to Tethyan Copper Company (TCC), a joint venture between Canada's Barrick Gold and Antofagasta Minerals of Chile. TCC challenged the cancellation in the International Centre for Settlement of Investment Dispute (ICSID). On July 12, 2019, the ICSID Tribunal awarded TCC $5.894 billion, plus interest of $700,000 per day in damages against Pakistan. As of 1 March 2022, the award stood at $6.5 billion. The new agreement between Barrick Gold Corporation and the governments of Pakistan and Baluchistan does away with this award. It also increases the share of the project owned by Pakistan from 25% to 50%, brings in $10 billion investment, the largest single investment in the country, and creates 8,000 jobs. Reko Diq is part of the Tethyan metallogenic belt (TMB) that extends from the Balkans in Europe to Pakistan including Serbo-Macedonian, Anatolian, Takab, Kerman, and Chagai metallogenic belts. It is believed to be rich in copper and gold deposits.
(Riaz Haq is a Silicon Valley-based Pakistani-American analyst and writer. He blogs at www.riazhaq.com )
