Federal Finance Minister Muhammad Aurangzeb has told the Lahore Chamber of Commerce and Industry that the government expected the Reko Diq mining project to generate $2.8 billion in 2028, its first year of operation. It was disclosed by the Barrick Gold CEO that production was expected to be 240,000 tons of copper and 300,000 ounces of gold. Ultimately, production was estimated by him to rise to 400,000 tons of copper and 500,000 ounces of gold a year. That means the benefit to Pakistan would be an export of about $4 billion a year. The initial export would represent about 10 percent of exports as they stand today. Incidentally, this would help offset much of the damage done by the new US tariffs if they are implemented fully. With 15 million tons of copper and 26 million ounces of gold, the Reko Diq project, at the maximal level of production, and assuming there are no further discoveries, should keep producing copper until 2065, and gold till 2077.
Mr Aurangzeb noted that copper, already a strategic metal, would become even more important in coming days, because of the energy transition, when it would be greatly in demand, Copper is already short worldwide, which implies that its prices are likely to go up. Gold prices have been going up recently, and it is one of the go-to commodities when the dollar falls into disfavour. It seems possible that Mr Aurangzeb’s estimates will prove cautious enough to be wrong. Another word of caution is that the mineral discoveries are coming slowly. Copper, gold and silver deposits were found at Saindak in the 1970s, but production only began in 1995. Reko Diq will begin production in 2028. Is the next project going to go online only after 2060?
There is another dimension deserving of consideration. Mr Aurangzeb, and his successors, must ensure that a balance is maintained, between the benefit to the country as a whole, and to the local residents. Chagai is not just home to both Saindak and Reko Diq, but its main claim to fame is as the home of the country’s nuclear tests. The national government must oversee the provincial in ensuring that the benefit is passed on. The province is restive, and justice must be sure to deny any space to separatists.
