Barrick Mining is postponing its huge copper and gold project in Pakistan in response to the war in the Middle East and deteriorating security situation in the south Asian country, reports The Financial Times.
The decision comes after the Toronto-based group last month launched a review of the Reko Diq development following a rise in separatist violence in the province of Balochistan where the mine is located.
“Following the preliminary findings of the review and in light of the subsequent escalation in security issues in Pakistan and the Middle East, the company considers it necessary to further assess the potential impacts and delivery strategy,” the miner told its Pakistani equity partners and the project’s local operator this week in correspondence seen by the FT.
“As a result, development activity will be slowed, with a corresponding reduced project spend, for a 12-month period commencing in July,” it added, while the review period and slower pace of development “will impact previously stated budgets and timelines”.
Barrick declined to comment.Reko Diq could become one of the world’s largest copper-gold mines, though industry experts have cautioned that it will be an expensive and challenging asset to develop.
Barrick owns 50 per cent of the mine and controls its board, with the remaining equity split between three Pakistani state-owned enterprises and the Balochistan provincial government.Three people involved in the mine said they had been notified of Barrick’s plan, which comes ahead of a project board meeting scheduled for next week to finalise the project’s strategy.
The delay means first production will not begin until 2029 at the earliest, they said. Prior to the review, first production at the mine had been expected to start in 2028, a timeline its local partners privately considered ambitious. The escalating conflict in the Middle East has upended global markets, sending oil and gas prices spiralling, causing shortages of key materials and further destabilising the region.
The war in Iran has made it difficult for supplies of fuel and mining equipment to reach the mine from the Gulf, and rising oil and gas prices are forcing a review of the total project spend on the $9 billion project, two of the people said.
The decision is a blow to Pakistan’s plans to develop the deprived but mineral-rich Balochistan province and secure a gusher of foreign exchange to free itself of mounting public debts. The cash-strapped country has cycled through two dozen IMF bailout programmes, with the current one having started in 2024.
Barrick has estimated that the mine could generate more than $70 billion in free cash flow over 37 years. Reko Diq, which is in western Balochistan near the Afghan and Iranian borders, will produce as much as 400,000 tonnes of copper and 500,000 ounces of gold a year once both phases of the project are complete, according to Barrick.
The south-western province, which is the size of Germany, has been suffering from a brutal insurgency from ethnic Baloch separatist groups motivated in part by a backlash to foreign investors harvesting the region’s rich natural resources. Militants in late January launched an audacious co-ordinated attack on more than a dozen sites throughout the province, killing four dozen people.
The abrupt departure of Mark Bristow as Barrick chief executive last year has also raised doubts about the future of the project, according to people involved in the mine. Bristow was a key backer of Reko Diq and had forged close ties to Pakistan’s military and political leadership, while new CEO Mark Hill is seen as being more risk-averse.
Copper is among the critical minerals that countries around the world are racing to secure in the context of growing demand and an expected shortage of the industrial metal in the medium term.
The US Export-Import bank told the FT last year that its early deals under its new leadership would include a $1.25 billion loan for Reko Diq.Copper is used in everything from cabling to construction and is a key material for the rapid rollout of AI data centres -- but ageing mines and the difficulty of opening new ones have resulted in falling production and a frantic run up in the copper price. Gold has also rallied dramatically over the past year, rising to a series of record highs that peaked in January at more than $5,000 a troy ounce.
