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A remote gold and copper mine beneath a volcano in south-west Pakistan could provide key leverage for trade talks with the US, according to its operator, as Islamabad tries to reduce “reciprocal” tariffs originally set at 29 per cent.
“When you think about what [the Trump administration] are trying to achieve with these tariffs, this project actually ticks a lot of boxes,” Tim Cribb, project director of Barrick’s Reko Diq mine, told the Financial Times this week.
“For us, we have lending coming from the US . . . we’re going to spend money in the US . . . it’s copper concentrate, a strategic metal . . it could be more a positive than a negative,” he said.
The $9bn mine, which has just begun construction, will be one of the world’s largest copper-gold mines once fully developed. It is 50 per cent owned by Toronto- and New York-listed Barrick, with the other half owned by three federal state-owned enterprises and the government of Balochistan.
In a call about tariffs on Monday with Pakistan’s foreign minister Ishaq Dar, US secretary of state Marco Rubio “raised prospects for engagement on critical minerals and expressed interest in expanding commercial opportunities”, according to a US state department readout.
The US has recently discussed “minerals deals” with Greenland and the Democratic Republic of Congo as the Trump administration expands its focus on access to minerals overseas. It also signed a mining deal with Uzbekistan last week.
Donald Trump announced 29 per cent tariffs on Pakistan on April 2 as he took action against US trading partners. He paused them for 90 days a week later, allowing time for negotiations.
To finance the $4.5bn first phase of the project, Barrick is seeking up to $1bn in loans from the Export-Import Bank of the United States, the official export credit agency of the federal government. With Pakistan’s government, it is also pursuing investment and loans from Saudi Arabia’s Manara Minerals, export credit agencies in Canada and Japan and multilateral development banks.
The International Finance Corporation, an arm of the World Bank, confirmed a $300mn loan to the mine this week.
A fifth of the mine will be powered by solar energy, with Barrick sourcing panels “primarily from the US”, Cribb said, despite prices in Pakistan for Chinese-developed solar panels plummeting in recent years.
“When . . . you look at the lending pool and commitments we make in terms of responsible investment, we will end up going US,” he said.
Cribb added that the mine’s output would be shipped through Pakistan’s Port Qasim near Karachi, as opposed to Balochistan’s Chinese-backed Gwadar port, which he said would pose greater security risks in transit.
On the sidelines of the Pakistan Minerals Investment Forum in Islamabad, Cribb and Barrick chief executive Mark Bristow told the FT they hoped to raise $500mn to $800mn by the second half of this year to build railways and other transport logistics to get the gold and copper to the port.
Lenders in Europe and Japan are among those seeking the copper output from the giant mine, they said.
“Right now, offtake is substantially dedicated to the lenders . . . or directly to people who are investing because they need the metal,” Bristow said.
Reko Diq is set to begin operations in 2028, with Barrick predicting it will produce copper and gold for 42 years.
Manara Minerals is in talks with the Pakistani government to buy a 10 to 20 per cent stake in the mine, the FT reported in January. “The Saudis would like . . . the offtake, more than anything else,” Bristow said, adding he did not know when or if the deal would go through.
The mine sits on Pakistan’s borders with Afghanistan and Iran in Balochistan province. A train hijacking, in which about 400 people were held for a day by separatist militants last month, highlighted a wave of violence that has gripped the province in recent years.
In a speech on Tuesday, Pakistan’s Prime Minister Shehbaz Sharif implored investors in Pakistan’s mining sector to bring refining to the country. “We will not allow raw materials to be shipped out of Pakistan,” Sharif told the conference.
Cribb and Bristow said refining copper in-country was “not in the current plan” as the mine would not produce the 600,000 tonnes of copper concentrate needed to justify refinery investments. Pakistan also lacked the cheap and reliable power necessary, they said.
This month, Barrick proposed changing its name from Barrick Gold to Barrick Mining to reflect its more expansive mining footprint and growing focus on copper.