The remote gold and copper mining operation under a volcano in south-west Pakistan offers strategic trade possibilities according to its operator while Islamabad works on decreasing initial 29% “reciprocal” tariffs.
According to Tim Cribb who directs the Reko Diq mine for Barrick he explains how this project meets multiple goals pursued by the Trump administration regarding their tariffs.
He stated that as a company we receive US loans and our future spending will occur in the US since it involves strategic copper concentrate therefore potentially benefiting the US trade situation.
The $9bn mining project has started its construction phase and aims to become a major copper-gold mining facility in the world. Barrick who trades in Toronto and New York holds 50 percent ownership in the project whereas the remaining half splits between three federal state-owned enterprises and the Balochistan provincial government.
US Secretary of State Marco Rubio spoke with Pakistani Foreign Minister Ishaq Dar through a telephone call where he expressed both interest in critical minerals and expanded trade opportunities per official information published by the US state department.
The Trump administration has been exploring mineral-related agreements with Greenland and the Democratic Republic of Congo while expanding its efforts to acquire foreign mineral resources. Last week Uzbekistan joined the list of nations to which the US signed a mining agreement.
The head of state Donald Trump issued 29 percent tariffs against Pakistan on April 2 throughout his efforts to confront US trading partners. The temporary suspension lasted for 90 days until he resumed the previous changes later that week.
The first $4.5bn phase of the project will be financed through up to $1bn worth of loans that Barrick seeks from the Export-Import Bank of the United States as its official federal government export credit agency. Saudi Arabia’s Manara Minerals and Canadian and Japanese export credit agencies and multilateral development banks along with Pakistan’s government seek investments and loans for the first project phase funding.
This week the International Finance Corporation which operates under World Bank authority provided $300 million of financing for the mine.
Cribb indicated that Barrick obtained solar panels “primarily from the US” for its mine’s fifth segment although Pakistan’s Chinese-made solar equipment prices have fallen over the previous few years.
He stated that considering global financial institutions cooperating with responsible investments they would ultimately select suppliers in the United States.
The mine operator Cribb chose to send its output through Port Qasim near Karachi instead of using Gwadar port because he felt Gwadar posed higher security risks while in transit.
Cribb along with Barrick chief executive Mark Bristow discussed their strategy to obtain $500mn to $800mn at the Pakistan Minerals Investment Forum in Islamabad to develop transport logistics and railways toward the port facilities.
The wanted copper production from the enormous mine comes from lenders operating in Europe and Japan according to sources.
Current sales from the mine are largely directed toward investor groups needing the material as well as lenders and people who invested in the metal specifically for its purpose according to Bristow.
The Reko Diq mining operation will commence its activities in 2028 as Barrick forecasts it will extract copper and gold through a 42-year production period.
The January edition of the FT disclosed that Manara Minerals presently negotiates with Pakistani authorities to acquire between 10 to 20 percent ownership rights in the mining sector. According to Bristow the Saudis primarily seek the offtake terms from the project above everything else and he admitted to uncertainty about completing the negotiations.
It is located on Pakistan’s borders with Iran and Afghanistan in Balochistan province. The wave of violence, which includes the hijacking of a train last month in which about 400 people were held for a day by separatist militants in a train hijacking, highlights the province in recent years. Pakistan PM Shehbaz Sharif in a speech Tuesday implored investors in Pakistan’s mining sector to come to his country and refine it. At the conference, Sharif said: “The citizens of this country will not sit idly by and watch raw materials being sent out of Pakistan.” Refining the copper in country is not ‘a thing which is in the current plan,’ as the mine would not produce 600,000 tonnes of copper concentrate required to justify the investments in refiining. They also did not have the cheap and reliable power that Pakistan did. Barrick has proposed changing its name to Barrick Mining this month to highlight its more extensive mining capacity and increased emphasis on copper.
