Barrick Gold has reached an agreement with the governments of Pakistan and Balochistan to restart the stalled Reko Diq gold project.
The project was stalled in 2011 due to a dispute over the legality of the licensing process. The case was heard by the International Centre for the Settlement of Investment Disputes, holding Pakistan responsible in 2019 for US$5.84 billion in damages.
The World Bank arbitration court handed down a US$11 billion penalty against Pakistan, Reuters reported.
The penalties will be waived, and Barrick and partners will invest US$10 billion in Reko Diq, Reuters reported Pakistani Finance Minister Shaukat Tarin as saying.
The governments have agreed that all processes for licensing will be fully transparent, and will involve federal and provincial governments as well as the Supreme Court of Pakistan.
The project will receive a mining lease, exploration licence, and surface rights.
Bristow told Mining Journal in February that the Reko Diq agreement is along the lines of similar agreements to move the Porgera operation in Papua New Guinea forward.
Barrick will update Reko Diq's 2010 feasibility and 2011 expansion prefeasibility studies. Reko Diq could be in production in five or six years, Barrick chief executive Mark Bristow said.
Reko Diq can produce 200,000 tons of copper and 250,000 ounces of gold annually for 56 years, Bloomberg reported.
The project is expected to be a conventional open-pit operation with flotation processing facilities.
"In addition to local employment and skills development, local procurement, infrastructure upgrades and improved medical and education systems, Reko Diq could also be the springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt," Bristow said.
The new company will be 50% owned by Barrick and 50% owned by Pakistan stakeholders, including a 10% share held by the Balochistan government, 15% held by a special purpose company held by the Balochistan government, and 25% owned by federal state-owned enterprises.
Separately, former Reko Diq partner Antofagasta said it would exit the project to focus on copper products in the Americas, namely Chile, Peru, the U.S., and Canada.