Reko Diq production faces possible two-year delay

Pakistan’s multibillion-dollar Reko Diq copper and gold mining project could face a delay of up to two years, pushing the start of production from its original 2028 target to 2030 amid security concerns in Balochistan and escalating tensions in the Middle East.

Government sources and industry insiders say the deteriorating regional security situation, particularly the conflict involving neighbouring Iran, has prompted investors to reconsider the project’s development schedule.

Canadian mining company Barrick Mining, which operates the project, is expected to resume full-scale development by mid-2027 after completing its ongoing internal review. However, the company has yet to announce a revised construction timeline.

Despite the slowdown, project management has retained approximately 700 permanent employees and around 2,000 contractual workers at the site. Some third-party service contracts, however, have been allowed to expire.

Company sources say essential activities, including research, administrative operations and community development initiatives, are continuing. They have also dismissed speculation about the project’s future, maintaining that the investment remains commercially viable.

Nearly $1 billion has already been invested in the venture. Officials believe the project’s long-term economic potential makes it unlikely that any of its major shareholders would abandon it despite the prevailing challenges.

Barrick Mining Chairman John L. Thornton is also expected to visit Pakistan later this month to attend the Pakistan Minerals Investment Forum 2026 in Islamabad. His visit is expected to provide an opportunity for discussions on the project’s future and investment prospects.

Industry experts remain divided over the financial implications of extending the development timeline.

Some private-sector investors have warned that prolonged delays could significantly increase construction expenses. One industry source estimated that the additional costs could reach between $8 billion and $10 billion, particularly if security conditions deteriorate further.

However, another industry insider associated with the Reko Diq Mining Company rejected that assessment, estimating that delays could increase overall costs by around 10 per cent, or approximately $450 million to $900 million.

The insider also expressed concern over plans to process only 30 to 35 per cent of the copper and gold output in Pakistan, with the remaining production potentially being sent to an Australian facility. The arrangement has raised questions about domestic processing capacity and the country’s ability to maximise economic benefits from its mineral resources.

Barrick initiated a formal review of the project in February 2026, announcing a slowdown in development and extending its assessment period into early 2027.

Speaking at the Mining Forum Americas last month, the company’s chief executive said improvements in security would be necessary before committing to a full construction schedule.

Barrick Mining holds a 50 per cent stake in Reko Diq, while the remaining ownership is divided equally between the Balochistan government and three state-owned entities: Pakistan Petroleum Limited, Oil and Gas Development Company Limited and Government Holdings Private Limited.

The estimated investment for the first phase has increased from $4 billion to $5.6 billion. The second phase is expected to require another $3.5 billion, taking the project’s total estimated capital expenditure to approximately $9.1 billion.

The open-pit mining project is designed to initially process 45 million tonnes of ore annually. Its capacity is expected to double to 90 million tonnes following the completion of the second phase.

The mine was initially planned to operate for 40 years, but an updated feasibility study revised its estimated lifespan to 37 years. Further exploration could potentially extend its operational life to as much as 80 years.

Once fully developed, Reko Diq is expected to create around 7,500 jobs during peak construction and provide approximately 4,000 permanent positions during operations.

The project is also projected to generate an estimated $74 billion in free cash flow over 37 years, making it one of Pakistan’s most significant prospective mining investments.