Barrick Mining, the operator of Reko Diq Project, has extended its review by 12 months citing escalating security concerns in Balochistan and the broader Middle East.
What does it really mean? Red alert: “Review” Is corporate language for serious doubt. Barrick is not withdrawing – the company has actually reaffirmed ‘long-term value’. Barrick is not pausing – the company is recalibrating. In effect, Barrick is doing three things. One-reviewing capital allocation. Two-reviewing delivery strategy. Three-reviewing timeline.
Why does this really matter? Reko Diq is Pakistan’s single largest FDI (Foreign Direct Investment) anchor. Under Phase 1, the capital expenditure is estimated at $6-7 billion with expected output of 250,000 tons of copper and 300,000 ounces of gold. Annual export potential: $4.37 billion. Every year of delay shifts cash flows into the future, resulting in a Net Present Value (NPV) loss of approximately $1.5 billion. Heightened security risks drive up the required rate of return, adding another $3 billion in value erosion, while also necessitating an extra $1 billion in capital expenditure.
Furthermore, one year of delay equals one full year of lost production — and at today’s spot prices, copper at $12,169 per ton and gold at $4,433 per ounce, that lost production alone is worth $4.37 billion. In total, each year of delay costs Pakistan between $10 billion and $12 billion. Red alert: A one-year delay at Reko Diq is not a delay. It is a $10-12 billion event. A “review’ by Barrick will trigger risk re-rating by lenders raising insurance premiums and political risk cover costs.
The Government of Pakistan must now understand that this is not about one project – this is about whether Pakistan can become a $100 billion mining destination or another stranded resource story. Here’s the uncomfortable truth: Barrick has not delayed because of copper prices. Barrick has not delayed because of gold prices. Barrick has not delayed because of engineering risk. Barrick has delayed because Pakistan’s risk premium moved. The 2028 production target is almost certainly gone. Red alert: This is not a mining delay. This is a sovereign signal failure.
Pakistan’s mineral wealth lies buried at an estimated $6 trillion — and Reko Diq has emerged as the flagship project symbolising Islamabad’s ability to attract serious foreign direct investment.
A prolonged delay will do three things, and none of them are good. One: It will devastate investor confidence in Pakistan’s entire mining sector. Two: It will invite intense scrutiny from the IMF and other multilateral lenders. Three: It will shred the government’s carefully crafted economic reform narrative. The three things the Government of Pakistan can and must do. One: Declare Reko Diq a National Security Asset — formally and legislatively. Not a press release. Not a minister’s statement. A formal parliamentary resolution designating the project corridor as a protected national economic zone, with dedicated military-grade security infrastructure, and a dedicated force command structure that reports directly to the Prime Minister.
Two: Establish a credible, independent Security Assurance Framework for Barrick. The government must engage a third-party international security risk firm — acceptable to both Barrick and its project finance lenders — to audit, certify and continuously monitor security arrangements. Verbal assurances from Islamabad carry no weight in the boardroom in Toronto. Independent certification does.
Four: Send a delegation to Toronto — now, not later. Pakistan’s Finance Minister and the Chief Minister of Balochistan should be on a plane to Barrick’s headquarters at 161 Bay Street within 30 days. Not to negotiate. Not to lobby. But to listen — to understand precisely what Barrick needs to see before it releases capital.
By all accounts, Reko Diq is a world-class orebody. But a world-class deposit still needs a workable security and political environment to become a mine. Right now, Balochistan does not provide that. Reko Diq will produce copper—but first, Pakistan must produce certainty.
—The writer is a journalist and
political analyst.
