Federal Minister for Petroleum Division Ali Pervaiz Malik on Thursday stated that the Reko Diq mining project is set to become the largest Western investment in Pakistan’s history, with projections estimating over $75 billion in free cash flows over the life of the mine, which is expected to span nearly 37 years.
In response to a question in the National Assembly, the minister provided details of the project’s expected production output. Phase one, starting in 2028, will target 300,000 ounces of gold and 200,000 tons of copper annually, while phase two, expected to begin in 2034, will increase production to 500,000 ounces of gold and 400,000 tons of copper per year. These estimates, according to Malik, are based on conservative projections, with potential cash flows exceeding $100 billion if commodity prices follow standard escalation rates.
The project, operated by Barrick Gold, also includes significant fiscal benefits for Pakistan, particularly the province of Balochistan, which holds a 25% stake in the venture. As part of the agreement, the provincial government will receive a 5% royalty on the project’s revenue, with the federal government also entitled to a 1% net smelter return.
To ensure Balochistan’s participation, advance royalty payments have already been made, totaling $5 million in the first year, $7.5 million in the second year, and an expected $10 million annually from the third year until production begins in 2028.
Malik also highlighted the project’s commitment to environmental safeguards, community development, and job creation. Since 2022, $5.3 million has been invested in education, healthcare, skills training, and access to clean water. During the construction phase, the project will create approximately 7,500 jobs, with 4,000 long-term positions once operational. Notably, 77% of the Reko Diq Mining Company’s (RDMC) employees are from Balochistan.
The project’s governance structure includes a board chaired by the chief secretary of Balochistan, with members from the Mines and Minerals Department, federal state-owned enterprises, and Barrick. The board meets quarterly to monitor the project’s progress and ensure transparency.
As part of the project’s ongoing efforts, the construction phase will involve significant capital expenditures, with 1% of the capital allocated for community development. The first phase of construction is scheduled to run from 2025 to 2028, followed by production starting in 2028.
With the project expected to contribute substantially to the region’s economy, the government has emphasized its importance in both economic growth and the creation of long-term, sustainable jobs in the region.
