Reko Diq Project feasibility study unveils 37-year mine life

The Reko Diq project is expected to yield production of 13.1 million metric tons of copper and 17.9 million ounces of gold over the 37-year life of the mine, the updated feasibility study of the project suggests.

According to a bourse filing, Pakistan Petroleum Ltd.'s share in the project represents 8.33% as part of the collective 25% held by three Pakistani state-owned enterprises (SOEs), including Oil and Gas Development Co. Ltd. and Government Holdings (Pvt.) Ltd.

The SOEs’ interest is held through Pakistan Minerals (Pvt.) Ltd. Of the remaining share, 25% is held by the government of Balochistan—15% on a fully funded basis through Balochistan Mineral Resources Ltd., and 10% on a free carried basis—while 50% is held by Barrick Gold Corp., which is the operator of the project.

The updated feasibility study outlines a 37-year mine life to be divided into two phases. Phase 1 will have an estimated total capital outlay of $5.6 billion, excluding financing costs and inflation.

Phase 1 is expected to be funded through a limited-recourse project financing facility of up to $3 billion, with the remainder financed by shareholder contributions.

The project will leverage five of the currently identified 15 porphyry surface expressions within the current mining lease, highlighting substantial future growth potential.

Negotiations for the proposed project financing are ongoing.

Phase 2 is expected to be funded through a mix of revenue generated from the project, additional project financing, and shareholder contributions, if required. Under the updated feasibility study, Phase 1 plans to process 45 million metric tons of mill feed annually (Mtpa) starting in 2028.

By 2034, Phase 2 aims to double processing capacity to 90 Mtpa.

The companies have approved an increase in the funding commitment for the project, reflecting a pro rata share of the total capital investment—inclusive of project financing costs—of $627 million.

According to estimates, the increase in copper and gold prices has more than offset the impact of higher project costs.

The boards of directors have also given in-principle approval to obtain project financing. The shareholder equity contributions by the company, after taking into account project financing, are expected to be $349 million, which will be adjusted for actual project financing costs and inflation.